Charging Order? The myth

eggbox

rodes wrote: »

With all due respect, saying "...any creditor daft enough to consider suing for "Breach of Trust" would first make an assessment if it would be worth it?" is not the same as saying they cannot do it.

No, but it is the reason they wouldn't as the lack of evidence they do proves.

rodes wrote: »

There may be many people reading this thread that think they do not have to pay the creditors anything, as has been said many times here, Whilst it is true that the solicitor does not have to send them the money, I do not agree that doing so is not a potential breach of trust, for which BOTH joint owners can then be pursued for the full amount of the debt - unless, as I said before, someone with specific knowledge of Trust Law says otherwise.

At the point a Charging Order is granted the ownership of the "joint tenants" ownership is severed and the owners become "tenants in common" This is because it is not possible to charge just one of the owners under a "joint tenants" ownership. From that point each person owns a separate 50% share of the property. The CO is then only registered against the Beneficial Interest of the debtors share. The non debtor has no responsibility, legal or otherwise, for what happens to the proceeds charged on the debtors share.

rodes wrote: »

Let's say a property is sold with a Form K Restriction registered from a Final Charging Order (on a debt of just one of the joint-owners) for a debt of £20k. Say there is £50k equity in the property, so £25k each. Would it not be worth them going after their £20k, from either party, knowing there is £50k to chase after? If not, what about a debt of £50k on £100k equity?

In theory it should be, but what you're missing is the time, cost and expense (and dare I say difficulty) presented in doing so. As I said previously, debt collection is a business and the above factors are why every debtor is not pursued to the Charging Order stage even if they have a large amount of equity in their property.

rodes wrote: »

Regarding price, I also do not agree that you can sell to who you want at any price you want. It has to be at market value, or the beneficial interest of the creditor is not being taken care of by the Trustees (sellers) and they could apply to the court to have the sale set aside. For example, someone might sell a property cheap to their mate, leaving little or no equity for the creditor, with a private agreement with their mate to share the subsequent profits. This action would be against the interests of a beneficiary of the Trust (i.e. the creditor) and therefore the Trustees (vendors) would be in breach of trust.

A Charging Order, either as an equitable charge or notified by a Restriction, carries no rights to prevent a property owner selling their property for whatever value they like or to who they like on its own. If the Charge Holder objects to the sale on financial gounds then they would have to have to apply for a Court Order objecting to the sale (most likely a Freezing Order.) But this action carries a financial risk for the creditor as, if their action fails, they can become responsible for damages which will, most likely, outweigh the cost of the debt they are owed.

It has to be your own decision whether or not to rely on the information you have received regarding a Breach of Trust, but in all the years posters on this site have dealt with Solicitors it has never been raised as a potential problem by any other Solicitor? Searching the internet for any other Solicitor propelling this course of action, under these circumstances, seems to be non existent? So the advice seems spurious at the very least and I doubt would deter anyone else who have researched this subject?

DAKOTA45

Hi Eggbox…. just an update; the court has written back asking me for a certificate of service… I'm wondering if I've done something wrong- I assumed the court served the particulars of claim and response pack on the defendant… certainly, they never told me anything to the contrary when they wrote back to me saying that they had issued my claim.

Very confused… If they wanted me to serve, why didn't they tell me?

I knew by this long silence that something wasn't right… I have been trying to phone them but there's no answer…

Gaaah!! D45

eggbox

Dakota

That's my understanding but is there not a section on service requirements on your claim form?

DAKOTA45

eggbox wrote: »

Dakota

That's my understanding but is there not a section on service requirements on your claim form?

Many thanks for the quick reply… panicking here!

Nothing on the claim form… but the Court sent me a Notice of Issue, saying that my claim was issued on 5 July 2016… there was a tear off section, (Request for Judgement), attached, stating that this was to be sent to the court if the defendant did not file an admission or defence within the time limit.

All the blurb I read about making a claim stated that the court usually serves the claim on the defendant, but that in some cases the claimant needed to do it… but it didn't elaborate and I assumed the court would have informed me when I made the application if this was the case...:(

D45

eggbox

Hi Dakota

They might just be asking for the Notice of Issue by the Court and the date it was sent (to ensure the 14 + 5 days have passed?)

But CAB advises the Court usually serves on the defendant?

How the claim form is served

Usually the court will serve the claim form by sending it to the defendant by first class post. The defendant will be deemed to receive it on the second business day after posting, unless the claim was issued online. As the claimant, if you want to serve it yourself, you can ask the court to give it back to you once it has been stamped so that you can serve it. There are a number of forms that must be sent with the claim form.

DAKOTA45

Thanks, Eggbox…

I found this…

So... when the court notifies you of the issue of claim, it's not necessarily an actual service of the claim…It just starts the claim proceedings.

I wonder why they didn't attach any notes to this effect when they sent back the notice of issue…

They certainly don't make it easy for people who have no knowledge of legal procedure, do they…?

I will have a look at this… it seems I need to get a response pack sent off, then… D45

PART 7 - HOW TO START PROCEEDINGS – THE CLAIM FORM


How to start proceedings
7.2
(1) Proceedings are started when the court issues a claim form at the request of the claimant.
(2) A claim form is issued on the date entered on the form by the court.
(A person who seeks a remedy from the court before proceedings are started or in relation to proceedings which are taking place, or will take place, in another jurisdiction must make an application under Part 23)
(Part 16 sets out what the claim form must include)
(Omitted)

(Omitted)
7.2A Practice Direction 7A makes provision for procedures to be followed when claims are brought by or against a partnership within the jurisdiction.
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Right to use one claim form to start two or more claims
7.3 A claimant may use a single claim form to start all claims which can be conveniently disposed of in the same proceedings.
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Particulars of claim
7.4
(1) Particulars of claim must –
(a) be contained in or served with the claim form; or
(b) subject to paragraph (2) be served on the defendant by the claimant within 14 days after service of the claim form.
(2) Particulars of claim must be served on the defendant no later than the latest time for serving a claim form.
(Rule 7.5 sets out the latest time for serving a claim form)
(3) Where the claimant serves particulars of claim, then unless a copy of the particulars has already been filed, the claimant must, within 7 days of service on the defendant, file a copy of the particulars except where –
(a) paragraph 5.2(4) of Practice Direction 7C applies; or
(b) paragraph 6.4 of Practice Direction 7E applies.
(Part 16 sets out what the particulars of claim must include)
(Part 22 requires particulars of claim to be verified by a statement of truth)
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Service of a claim form
7.5
(1) Where the claim form is served within the jurisdiction, the claimant must complete the step required by the following table in relation to the particular method of service chosen, before 12.00 midnight on the calendar day four months after the date of issue of the claim form.
Method of service
Step required
First class post, document exchange or other service which provides for delivery on the next business day Posting, leaving with, delivering to or collection by the relevant service provider
Delivery of the document to or leaving it at the relevant place Delivering to or leaving the document at the relevant place
Personal service under rule 6.5
Completing the relevant step required by rule 6.5(3)
Fax Completing the transmission of the fax
Other electronic method Sending the e-mail or other electronic transmission
(2) Where the claim form is to be served out of the jurisdiction, the claim form must be served in accordance with Section IV of Part 6 within 6 months of the date of issue.
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Extension of time for serving a claim form
7.6
(1) The claimant may apply for an order extending the period for compliance with rule 7.5.
(2) The general rule is that an application to extend the time for compliance with rule 7.5 must be made –
(a) within the period specified by rule 7.5; or
(b) where an order has been made under this rule, within the period for service specified by that order.
(3) If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if –
(a) the court has failed to serve the claim form; or
(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
(c) in either case, the claimant has acted promptly in making the application.
(4) An application for an order extending the time for compliance with rule 7.5 –
(a) must be supported by evidence; and
(b) may be made without notice.
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Application by defendant for service of claim form
7.7
(1) Where a claim form has been issued against a defendant, but has not yet been served on him, the defendant may serve a notice on the claimant requiring him to serve the claim form or discontinue the claim within a period specified in the notice.
(2) The period specified in a notice served under paragraph (1) must be at least 14 days after service of the notice.
(3) If the claimant fails to comply with the notice, the court may, on the application of the defendant –
(a) dismiss the claim; or
(b) make any other order it thinks just.
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Form for defence etc. must be served with particulars of claim
7.8
(1) When particulars of claim are served on a defendant, whether they are contained in the claim form, served with it or served subsequently, they must be accompanied by –
(a) a form for defending the claim;
(b) a form for admitting the claim; and
(c) a form for acknowledging service.
(2) Where the claimant is using the procedure set out in Part 8 (alternative procedure for claims) –
(a) paragraph (1) does not apply; and
(b) a form for acknowledging service must accompany the claim form.
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Fixed date and other claims
7.9 A practice direction –
(a) may set out the circumstances in which the court may give a fixed date for a hearing when it issues a claim;
(b) may list claims in respect of which there is a specific claim form for use and set out the claim form in question; and
(c) may disapply or modify these Rules as appropriate in relation to the claims referred to in paragraphs (a) and (b).
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Production Centre for claims
7.10
(1) There shall be a Production Centre for the issue of claim forms and other related matters.
(2) Practice Direction 7C makes provision for–
(a) which claimants may use the Production Centre;
(b) the type of claims which the Production Centre may issue;
(c) the functions which are to be discharged by the Production Centre;
(d) the place where the Production Centre is to be located; and
(e) other related matters.
(3) Practice Direction 7C may disapply or modify these Rules as appropriate in relation to claims issued by the Production Centre.
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Human Rights
7.11
(1) A claim under section 7(1)(a) of the Human Rights Act 19981 in respect of a judicial act may be brought only in the High Court.
(2) Any other claim under section 7(1)(a) of that Act may be brought in any court.
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Electronic issue of claims
7.12
(1) A practice direction may make provision for a claimant to start a claim by requesting the issue of a claim form electronically.
(2) The practice direction may, in particular –
(a) specify –
(i) the types of claim which may be issued electronically; and
(ii) the conditions which a claim must meet before it may be issued electronically;
(b) specify –
(i) the court where the claim will be issued; and
(ii) the circumstances in which the claim will be transferred to another court;
(c) provide for the filing of other documents electronically where a claim has been started electronically;
(d) specify the requirements that must be fulfilled for any document filed electronically; and
(e) provide how a fee payable on the filing of any document is to be paid where that document is filed electronically.
(3) The practice direction may disapply or modify these Rules as appropriate in relation to claims started electronically.
(Practice Direction 5C deals with electronic issue of claims started or continued under the Electronic Working scheme.)

DAKOTA45

I'm just worried that if I serve the claim form and the court has already served it, it might mess everything up… How do I find out whether the court has served it on him? D45

eggbox

No they don't make it easy and I think that is deliberately so to dissuade LIP's!

eggbox

DAKOTA45 wrote: »

I'm just worried that if I serve the claim form and the court has already served it, it might mess everything up… How do I find out whether the court has served it on him? D45

You have to ask them, unfortunately.

DAKOTA45

eggbox wrote: »

No they don't make it easy and I think that is deliberately so to dissuade LIP's!

You could be right… I found this link, and it states the court serves on the defendant…

The court will then ‘issue’ the claim (sealed or stamped with a red, circular seal) and a ‘notice of issue’ will be sent back to the claimant confirming that their claim has begun. The court will then take responsibility for sending the information to the defendant – or person against whom the claim is being brought.

I feel the court should have informed me if they wanted me to serve the claim myself… D45

http://www.lawplainandsimple.com/legal-guides/article/how-is-a-claim-issued-at-court via @Law_PlainSimple