In a previous insight (see: https://www.fmgs.co.uk/post/how-can-a-judgment-debt-be-enforced), we touched upon the various options that are available to a Judgment creditor to enforce a Judgment debt against a limited company.  This insight will focus on what can be done when the Judgment creditor has little knowledge of what assets the Judgment debtor actually has (if any) and where they are held.

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In this case, it is open to a Judgment creditor to make an application to the Court for a Judgment Debtor (or, if the Judgment debtor is a company, an officer of the company) to attend Court for questioning.  In order to do this, at any time after Judgment has been entered, it is open to the Judgment Creditor to send an Application Notice to the Court requesting an order that the Judgment Debtor attends court to provide information about its means and other matters relevant to enforcing a Judgment Debt.

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The Application Notice must:

1. State the name and address of the Judgment Debtor/officer of the debtor company;
2. Identify the Judgment or Order which the Judgment Creditor is seeking to enforce;
3. State the amount presently owed by the Judgment Debtor under the Judgment;
4. If the Judgment Debtor is a company or other corporation, state: (i) the name and address of the officer whom the judgment creditor wishes to be ordered to attend court; and (ii) their position in the company; and
5. If the Judgment creditor wishes the Judgment Debtor (or other person to be questioned) to be ordered to produce specific documents at Court, identify those documents.

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There are standard questions that the Court will ask the Judgment Debtor depending on whether it is an individual or a company.  The questions for an individual cover:

• Employment status and, if appropriate, details of employer and wages or salary.
• Details of dependants and outgoings paid from income.
• Details of any additional income.
• Details of any property owned (such as house, car,), which may have a saleable value.
• Details of any savings accounts and the balances in them.
• Details of debts.

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The standard questions for a company cover:

• Details of the trading status of the company.
• Details of any current/future contracts of the company.
• Details of the company’s current financial assets/debts/liabilities.
• Details of the company’s other assets.
• Details of the company’s property.

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The Judgment Creditor can also supplement these questions with additional questions, and requests for the Judgment Debtor to provide documents (such as, for example, bank statements).

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Upon receipt of a compliant Application Notice, the court will issue an Order to the Judgment Creditor setting out the time, date and place for the Judgment Debtor to attend court for questioning.  The Order must then be personally served on the Judgment Debtor by the Judgment Creditor not less than 14 days before the hearing.  

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It is open for the Judgment Debtor to request that the Judgment Creditor pays them a sum reasonably sufficient to cover their travelling expenses to and from the Court hearing.

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If (after personal service of the Order upon them), the Judgment Debtor fails to attend Court for the questioning, or if they refuse to take oath or to answer any question or otherwise fail to comply with the Order (see below), the Court can refer the matter to a High Court Judge or Circuit Judge. The Judge to whom the case has been referred could then decide to hold the Judgment Debtor in contempt of Court and could make a suspended order punishing them by a fine, imprisonment, confiscation of assets or other punishment under the law. A suspended order is an order for the Judgment Debtor’s punishment for contempt of court to be suspended pending them attending court on a new date to be questioned on oath.

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The hearing of the application can be conducted either by a Judge or an officer of the Court.  If an Officer of the Court conducts the hearing, the Judgment Debtor will be questioned on oath and the answers will be recorded and a copy of the answers provided to the Judgment debtor. If the hearing is conducted by a Judge, the questioning will be conducted by the Judgment Creditor or their legal representative.

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An application for a Judgment Debtor to attend court for questioning can be a powerful tool in identifying what (if any) assets that a Judgment Debtor holds, and in determining which method of enforcement is most appropriate. Indeed, a Judgment Debtor will often be reluctant to lie on oath when the threat of being held in contempt of court is hanging over them.

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If you are a Judgment Creditor in need of advice on how to enforce a Judgment, or for any other advice, please do not hesitate to contact our commercial dispute resolution team on 01254 828410.