Enforcing Money Judgments

Overview

• Obtaining judgment is the first step in a successful claim and to benefit from the subject matter.
• The purpose for a claim for money is actually to recover that money.
• The Supreme Court of Judicature Civil Procedure Rules, 2002 (the CPR) gives the judgment creditor six options for enforcing money judgment and other orders to pay money.
• Four such options are Orders for Seizure and Sale under Part 46, Charging Orders under Part 48, Orders for Attachment of Debt under Part 50, and Orders for Sale of Land under Part 55

Orders for Seizure and Sale

• It is often a judgment creditor's first resort in respect of enforcement.
• The court will make this order even if specific assets are unknown and obtaining the order does not require a formal application.
• Part 45 of the CPR governs the procedure for obtaining an order for seizure and sale, is a “writ of execution”, and is subject to the provisions applicable to writs of execution.
• A judgment creditor must first obtain the permission of the court before applying for an order for the seizure and sale of goods where six years have passed since the judgment was entered.
• Another instance is where the goods against which enforcement would be sought are in the hands of a receiver or where the judgment debtor has died.
• Applying for an order for seizure and sale of goods is one of the simpler enforcement applications to proceed
• A judgment creditor needs only file the Form 18 of the CPR.
• Then the Registrar will sign the order and the sealed order would operate as a direction to the appropriate bailiff to effect enforcement in the relevant parish.
• The judgment creditor or his attorney-at-law sends a letter to the bailiff enclosing the order for seizure and sale.
• Specify all addresses where the judgment debtor's assets may be found.
• The compensation for conducting the seizure and sale is a percentage of the sums recovered after the process is complete.

Executing the Order for Seizure & Sale

• Rule 46.13 deals with the execution of an order for seizure and sale.
• The order cannot be enforced between 6:00p.m. and 6:00 a.m.
• It permits a bailiff to “seize, take and levy on all goods and chattels" except for the judgment debtors' clothing and bedding, his tools and implements of trade worth under $30,000 or any goods or chattels which are of insufficient value to meet the costs of their removal and sale.
• Property the bailiff seizes should be sold by public auction.
• The court can give permission for it to be sold in some other manner.
• The procedure to apply for such permission is set out at rule 46.15.
• The application can be made by the judgment creditor or the bailiff, and must be supported by affidavit evidence.
• The bailiff must prepare a list of all the persons on whose behalf he has been issued with an order for seizure and sale of goods and must be produced at the hearing of the application.
• Along with the judgment debtor, all the persons on the list must be served with the application and be given at least 5 days' notice.
• Where the bailiff sells the goods at public auction, the sale must be advertised in a newspaper of daily circulation and at least five days must have passed since the date of seizure
• Rule 46.13(6) permits the bailiff to seize money, bank notes, cheques and certain other negotiable instruments which he may hold as security for the amount to be levied.
• The bailiff must pay any monies he recovers to the Accountant General and receive a receipt.
• The bailiff then gives that receipt to the judgment creditor's attorney-at-law along with his report outlining all the property he has seized and sold.
• The judgment creditor must obtain an order directing the Accountant General to pay it out.
• In practice, a form of “Order for Payment of Money out of Treasury” attaching the Accountant General's receipt and the bailiff's report is filed for the Registrar to sign.
• The Registrar usually requires a signed authorisation from the judgment creditor authorizing his attorney-at-law to collect the money on his behalf from the Accountant General.

Possible Challenges

• The operation of the order for seizure and sale has received judicial consideration in a number of decisions.
• In Re: The A & A Company Ltd, a director had obtained judgment against the company and issued a writ of seizure and sale to enforce the judgment.
• The bailiff seized the company's goods but before he could sell them another creditor applied to wind up the company and obtained an ex parte order staying the execution.
• The order was granted pursuant to section 101 of the Companies Law/ section 224 of the Companies Act, 2004.
• In Lane Investment Limited v United Grocery and Company Limited, the defendant applied to set aside the default judgment against it and the writs of execution to enforce that judgment.
• The claimant resisted the application on the ground that the writs had already been consummated.
• Having decided to set aside the judgment, Cooke J. held that the writs having been consummated were no bar to them being set aside.
• In Adams v R. Hanna and Sons Ltd. et al certain property of the judgment debtor was levied against but before they were sold the judgment creditor accepted from the judgment Debtor a lesser sum “in settlement of suit,” but the court found for the plaintiff
• In Henzel Clarke v David Vincent the judgment debtor made a preliminary objection to a judgment Summons on the ground that the bailiff had already executed the judgment by seizing his sail boat which exceeded the judgment debt.

Charging Orders

• Charging orders are a relatively new method of enforcement and did not exist under the Civil Procedure Code (the precursor to the CPR).
• In Beverley Levy v. Ken Sales & Marketing Ltd., the Privy Council commented on the court's power to create a charge over land and there appears to have been no statutory power for courts in Jamaica to make charging orders until the recent enactment of legislation enabling courts to do so.
• The "recent enactment of legislation" to which the Privy Council was referring was the Judicature (Supreme Court) (Amendment) Act, passed in March 2003 amending the Judicature (Supreme Court) Act.
• The relevant amendment inserted sections 28A to 28D in the Judicature Supreme Court Act to allow the Supreme Court to, among other things, grant charging orders and orders for sale of land.
• Section 28D states the Court may, on application of the person prosecuting a judgment or order for the payment of money, make a charging order in accordance with the Civil Procedure Rules, 2002 in relation to the enforcement of judgments.
• Part 48 permits charging orders to be granted over land, stock (includes shares), securities and dividends, and other personal property.
• In Jennifer Messado & Co. v North American Holdings Co. Ltd., in considering the nature of a charging order, Brown, J. observed: A Charging Order is granted by the court to secure payment of money pursuant to a judgment or order.
• Although the charging order has been described as a form of compulsory mortgage, it differs from a mortgage.
• It passes no property (notionally or actually) to the judgment creditor, no right of possession or foreclosure but only a right of realisation by the judicial procedure created under rule 48.11.
• The charging order is a security for a judgment debt and is imposed on property in which the judgment debtor is beneficially entitled.
• An application for a charging order is a two-stage process involving an application made without notice but must be supported by affidavit evidence.
• Rule 48.3 lists the evidence that the affidavit should contain.
• The procedure is for the court to deal with the application without a hearing and, if warranted, make a provisional charging order at that stage.

Power to Make a Provisional Charging Order

• The practice was to treat the first stage in the process as administrative and the Registrar would routinely grant provisional charging orders.
• In June 2014, the Jennifer Messado & Co. case judicially considered this practice after it was challenged, a provisional charging order granted by the Registrar of the Supreme Court was set aside on the grounds that they had no jurisdiction to grant such an order.
• After reviewing the relevant statutory provisions and Part 48, Brown, J. concluded that the nature of a provisional charging order made its grant more jurisdictional than ministerial and therefore outside of the powers the Registrar could exercise pursuant to the relevant legislation.
• In as much as the making of a PCO represents an interference with property rights, its making sounds in the vein of jurisdiction rather than in procedure.

Interested Persons & Objections

• A provisional charging order must fix a date for when the court will consider making a final charging order.
• Rule 48.6 specifies the persons who “have an interest in charging order proceedings as well as the judgment creditor and the judgment debtor”.
• The rule does not include a mortgagee (better view is a mortgagee would be an interested person for the purposes of Part 48)
• In Beverley Levy case:
  • Their Lordships' attention has been drawn to Rule 48.6 in Part 48 of the Civil Procedure Rules 2002 which deals with charging orders and defines the “interested persons” who have an interest in charging order proceedings and may make objections to the making of a charging order as including “any person who owns the land to be charged jointly with the judgment debtor."
  • In Jennifer Messado & Co. case, the objection was taken by mortgagees.
• The provisional charging order must be served on the judgment debtor and on all interested persons no less than 28 days before the hearing at which the court will consider making a final charging order.
• The judgment creditor must file an affidavit of service at least 7 days before the hearing.
• Rule 48.8(3) requires objections to be filed not less than 14 days before the hearing.
• The CPR does not include a form of objection and does not specify what information or details should be contained in an objection.
• One objection a judgment creditor may face is that the property the subject of the application is jointly-owned by the judgment debtor and a third party who is not a party to the claim.
• Such an objection was taken in *First Global Bank Limited v D’Oyen Williams and Tracey Ann Williams.
• Batts, J. disagreed that there was a bar to the court granting a charging order over jointly-held property.

Granting a Final Charging Order

• At the final hearing, the court may grant the final charging order, discharge the provisional charging order or give directions for the resolution of any objections that cannot be resolved summarily
• The CPR does not indicate what factors a court should consider in deciding how to exercise its discretion, or the judge hearing the application should consider all the circumstances of the case keeping in mind the overriding objective.
• In Jennifer Messado & Co., Brown, J. expressed that the court needs to consider matters such as the personal circumstances of the debtor and whether other creditors would be unduly prejudiced.
• According to rule 48.9(1), once a provisional or a final charging order is granted over property, no disposition of that property by a judgment debtor is valid against the judgment creditor.
• Under rules 48.9(2) and (3), a person served with a charging order may not permit the transfer of any stock the subject of the order or pay any interest or dividend payable out of that stock. A charging order may also prevent the completion of the sale of a registered property.

Not a Writ of Execution

• A charging order is not a writ of execution, which includes an order for the seizure and sale or an order for sale of land.
• The validity of a charging order is not limited to a period of twelve months from its issue. Mangatal, J. made this point in Air Jamaica Limited v Stuart's Travel Service Limited and others, finding that since definition of “writ of execution" in Rule 46.1 of the CPR does not include charging orders, then the six year period after which permission must be sought to issue a writ of execution spelt out in Rule 46.2, does not apply to charging orders.

Orders for Sale of Land

• Part 55 of the CPR outlines the procedure a judgment creditor must follow when applying for an order for sale of land and includes any interest in, or right over, land.
• A sale of land under Part 55 can be made pursuant to an enactment which authorises the court to order a sale or where it appears to the court to be necessary or expedient that the land be sold.
• Examples of such an enactment include The Property (Rights of Spouses) Act, The Partition Act, The Conveyancing Act, and Tax Collection Act

The Necessary Evidence

• An application for an order for sale of land must be supported by affidavit evidence and must, among other things, identify the land and grounds for the sale.
• If the land the subject of the application is registered land, it is important to conduct a title search to verify ownership and the description of the property.
• There may be interests that may not appear on a certificate of title or may not be readily available where the land is unregistered.
• A beneficial interest is one such example and persons with a beneficial interest in land would be interested parties.
• The view of the court in Ken Sales & Marketing Limited v Earl Levy et al was nothing in Part 55 that defines a person "who has an interest in the land".
• The affidavit should also indicate the proposed method of sale and why it is being proposed.
• The affidavit evidence must exhibit a current valuation of the land by a qualified land valuer or surveyor
• A current valuation for the land is an important consideration for the court, as per Hugh Scott and Elsa Scott v UGI Finance and Investments Limited and another.

Exercise of the Court's Discretion

• Rule 55.3 provides that on hearing an application for an order for sale of land the court may order the sale of the land or some specified part of the land.
• It also permits the court to suspend any such order on such terms as it thinks fit or dismiss the application.
• The CPR does not identify the criteria on which the court should exercise its discretion in ordering a sale, and a court will no doubt take into account all the circumstances of the case.
• In Girvan Williams v Omotoso Uswale-Nketia, Campbell, J. considered ruling to require a weighing of the reasons given for seeking the sale against the hardship that such a sale will create for the debtor.
• In Clarence G. Royes v Carlton C. Campbell and others the court had to consider whether to grant an order for sale of land where the land was jointly owned by the judgment debtor and his wife, who was not a party to the claim.

Completing the Sale

• Rule 55.7 (1) provides that after the sale of a property under Part 55 “the court must grant to the purchaser a certificate that that person has purchased the property."
• The certificate is in form 22A which is headed “Certificate of Sale of Land” and must be prepared by the judgment creditor.
• When the Certificate of Sale of Land is stamped as a conveyance of the property, it is deemed to be a valid transfer of the property.

Attachment of Debts Orders

• An attachment of debts order (attachment order) is a method of enforcement that allows a judgment creditor to identify and intercept a debt that a third party owes to the judgment debtor.
• Once the court makes the attachment order, the third party will be obliged to pay the outstanding debt to the judgment creditor instead of judgment debtor to whom it is originally owed.
• Under the Civil Procedure Code, this type of order was called a garnishee order, and in England and Wales they now use the term 'third-party debt order".
• Regardless of the terminology, this method of enforcing judgment is useful where the judgment creditor is aware that a third party owes the judgment debtor money, which if attached, could be paid to settle or partially settle the judgment debt.
• In Choice Investment Limited V Jeromnimon, Lord Denning explained the nature of an attachment order.
• Lord Denning's illustration in this passage is useful to understanding the nature of an attachment order, but it is important that one does not misconstrue its effect.
• It does not operate as a transfer of the debt and the judgment creditor does not become a creditor of the third party.
• An attachment order deprives a judgment debtor of a right to receive his money and gives that right to the judgment creditor.

A Question of Jurisdiction

• Although an attachment order is a common and convenient method of enforcement, it is questionable whether the Jamaican Supreme Court has the jurisdiction to make it.
• Dayes v The Ritz Carlton Hotel Company of Jamaica Limited is a decision from the Jamaican Supreme Court that supports such an argument.
• In contrast to the CPC, the CPR is not primary legislation and Justice Sykes held that when Parliament repealed the CPC, it repealed the power to grant interim payments with it.
• This reasoning may equally apply to attachment orders, as the power to grant such orders has always derived from statute.

Procedure to Follow

• Part 50 of the CPR sets out the procedure a judgment creditor must follow when applying to attach a debt.
• Rule 50.1(1) provides that a judgment creditor may obtain payment of all or a part of a judgment debt from a person within the jurisdiction who owes money to the judgment debtor.
• The procedure of attaching a debt is a two stage process, and the first step is for the court (or Registrar) to grant a provisional order.
• The second step is for the court to decide whether to make the provisional order final.
• When the judgment creditor applies for the provisional attachment order, he must support his application with affidavit evidence that contains the judgment details to be enforced and a statement that the garnishee owes the amount.
• If the court grants the provisional order, it will set a date and time for the final hearing.
• The judgment creditor must serve the provisional order on the garnishee personally and at least 21 days before the final hearing.
• The person should also serve the order the judgment debtor at least 7 days before the final hearing.
• The provisional attachment order is binding on the garnishee from the moment it is served on him.
• Such service imposes an equitable charge on the debt that prevents the garnishee repaying it to the original creditor entitled to it
• In Turnquest v Henlin Gibson Henlin et al, In that case the claimant commencedproceedings to enforce orders made by the Superior Court of Connecticutin relation to a trust deed and the transfer of land, located in Top Hill,Jamaica into a trust; or, in the alternative, for the Jamaicancourt to enforce the process.
• At the hearing the court will determine whether to make the provisional order final, discharge it or give other directions.
• Where the court makes the provisional order final the garnishee is ordered to pay the debtto the judgment creditor.
• The garnishee's liability to the judgment debtor is discharged to the extent of the amount paid to the judgment creditor.

Bases on Which a Garnishee May Resist

• A garnishee may resist the final attachment of a debt, including an argument that it is a foreign debt, the debt is not due or owing, and the judgment debtor is insolvent.
• As a general rule, the court will not attach a debt that is payable in a foreign country and governed by foreign law.
• Societe Eram Shipping Co Ltd v Cie Internationale de Navigation and others* is a case that illustrates this point.
• Another way in which a garnishee may successfully resist the making of a final attachment order is by establishing that the alleged debt is not due or owing.
• Before the court can grant an attachment order it must be satisfied that arelationship of creditor and debtor exists between the judgment debtorand the garnishee.
• Similarly in Dunlop & Ranken Ltd. v. Hendall Steel Structures Ltd. and Pitchers Ltd. (Garnishees), the defendant were subcontractors who were entitled to be paid under the main buildingcontract after the issuance of an architect's certificate and found for the appellant.

Insolvency

• The court will generally, as a matter of course, refuse to make a final attachment order if, at the time of the final hearing, the judgmentdebtor is being wound up (either compulsorily or voluntarily).

Enforcement of Foreign Judgments

• Both monetary and non-monetary foreign judgments, subject to the satisfaction of certain criteria and depending on the facts of a particular case, can be enforced in Jamaica.
• Monetary foreign judgments can be enforced at common law or through the existing legislative mechanisms, while the enforcement of non-monetary judgments can be enforced through reliance on common law.
• The statutory authority for the enforcement of foreign monetary judgments is in the Judgments and Awards (Reciprocal Enforcement) Act, 1923 (“the 1923 Act") and the Judgments (Foreign) (Reciprocal Enforcement) Act of 1936 (“the 1936 Act”) (together “the Acts”).
• The court also examines Richard Vasconcellos v Jamaica Steel Works Ltd. (Formerly Jamaica Steel & Plastic Ltd.), Ishmael Gafoor and Amelita Gafoor
• After extensively reviewing a line of authorities Harrison, JA found thatcourts are prepared to go behind foreign judgments “where the allegations offraud are new and not the subject of any prior adjudication” and that “thedefendant has the burden of demonstrating that the facts sought to be raised couldnot have been discovered by the exercise of due diligence prior to the obtaining ofthe foreign judgment.”
• The court can also examine DYC Fishing Limited v Perla Del Caribe Inc.
• In addition to Pro Swing, which was found to be a progressive cause of action.
• Ultimately, the procedural steps and principles outlined in this paper demonstrate that mechanisms for the enforcement of monetary judgments are in place to provide the ‘means' to secure the ultimate end.
• Orders for seizure and sale, charging orders, attachment of debt orders and orders for the sale of land are some of the methods of enforcing a judgment.