Orders For Sale

The following decision is notable for the robust judgment of Mr Justice Coulson when considering whether to order a sale of property owned by a judgment debtor.

The case is related to the case of Mentmore Towers & others v Packman Lucas [2010] EWHC 457 which we reported in our June Updater.

Packman Lucas Limited v Mentmore Towers [2010] EWHC 1037 (TCC)

The employer failed to pay outstanding fees to the engineer in relation to the engineering services carried out by the engineer in relation to the redevelopment of certain properties in Piccadilly and Mayfair. The employer was in serious and "contumelious default" in failing to honour the debts and comply with numerous court orders. As a result of the continuing non-payment of the outstanding sums, final charging orders were made against the employer relating to the Piccadilly and Mayfair properties. The total debt was £190,201.67 plus costs on the Piccadilly property, and £24,222.38, plus costs on the Mayfair properties.

The employer was also in dispute with the architect, Fiztroy Robinson Limited, concerning its unpaid fees on the Piccadilly and Mayfair properties.

The court acknowledged that an order for sale was an extreme sanction and that "all circumstances would have to be considered" before the court exercised its discretion to made an order for sale under CPR 73.10. As an order for sale took the sale of a potentially valuable asset out of the hands of its owner, it was important to protect that owner from the risk of a fire sale which did not recoup the true worth of the asset.

Orders for sale: the Piccadilly and Mayfair properties

The parties were agreed that an order for sale was appropriate in relation to the Piccadilly property but did not agree on the minimum price to be achieved by any sale. The court took a conservative approach when identifying the minimum sale price and concluded that the minimum figure of £16 million was appropriate - the evidence put the value of the property between £10 million and £28 million but there was little evidence of the likely cost of repairing the Piccadilly property.

However, the employer resisted the sale of the Mayfair property as a matter of principle, on the ground that the judgment debt was too small in relation to the value of the property to justify an order for sale. The employer also argued that the property was going to be sold imminently.

The size of the debt

The court considered that it was potentially dangerous for a court to...