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An overview of the Enforcement of Judgments Office – Northern Ireland

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management - Other

20-01-2020

1.       What is the Enforcement of Judgments Office?

The Enforcement of Judgments Office (the “EJO”) is a public body responsible for enforcing judgments in Northern Ireland. This contrasts to the system in England and Wales where the enforcement of judgment is a matter for judgment creditors.

The EJO was established in 1971.  Its powers are derived from the Judgments Enforcement (NI) Order 1981 (as amended) (the “Order”), and its procedures from the Judgments Enforcement Rules (NI) 1981 (as amended). The Northern Ireland Courts and Tribunals Service, an agency of the Department of Justice in Northern Ireland, oversees the day-to-day management of the EJO.

2.       What remedies are available via the EJO?

The EJO has the power to make a range of orders for the recovery of debts and assets. These include:

a.   Orders for possession of land or goods

Orders for possession of land are most commonly encountered in secured recoveries cases where lenders such as banks seek enforcement of possession orders following a debtor defaulting on their mortgage payments. Eviction of the debtor and other occupants of the land is the likely outcome of an order for possession of land. Orders for possession of goods may be encountered in asset finance cases where debtors have defaulted on payments pursuant to a hire purchase agreement.

b.   Orders charging land (an “OCL”)

If a judgment debtor owns land, the EJO may charge that land to secure the payment of a debt in favour of a judgment creditor. An OCL remains effective for 12 years from the date of the judgment. Once registered against the property, the judgment creditor may apply to the EJO for liberty to sell the property. Alternatively, any person who purchases the property does so subject to the OCL, although most buyers are likely to insist that the judgment debtor pays off the OCL prior to completing the sale of the property.

c.   Attachment of earnings orders (an “AEO”)

An AEO allows a judgment creditor to gradually recover a debt by the EJO deducting a regular sum of money from the debtor’s salary.

d.   Instalment orders

An instalment order is similar to an AEO, but instead applies to judgment debtors who are self-employed. If an instalment order is issued, the creditor will be entitled to regular sums from the judgment debtor’s income. Payment can be made by the judgment debtor via the EJO or directly to the judgment creditor. If a judgment debtor fails to make payments, the creditor can notify the EJO. However, in the event of non-compliance with the order, it would be the responsibility of the judgment creditor to apply to the High Court to commence committal proceedings, not the EJO.

e.   Orders for seizure of goods

These orders are typically encountered where it appears to the EJO that a judgment debtor has sufficient assets, which could be sold to satisfy a judgment debt. The EJO may favour other options, such as AEOs or instalment orders, before issuing an order for seizure of goods [since these tend to be more straightforward to enforce], particularly where the judgment debtor is an individual, rather than a company. If the judgment debtor trades as a business or is a company, stock could be seized and sold. Certain goods are exempt from seizure pursuant to Article 33 of the Order, including certain clothing and furniture, vehicles subject to hire purchase agreements and perishables.

f.   Orders appointing a receiver

These are used by the EJO where it is known that a judgment debtor is due to receive monies from a third party. For example, if a judgment debtor is about to receive proceeds from a claim, sale of an asset or an inheritance, the EJO can issue an order, which requires the payer to direct the monies to the EJO instead.

g.   Attachment of debt orders (commonly known as a Garnishee order)

These orders allow the EJO, in the first instance, to ‘freeze’ a judgment debtor’s bank account. If the third party bank then does not object to the order or give good reasons as to why an order should not be made for payment of the frozen sum to the creditor, the EJO may make an order for payment against the third party bank.

h.   Certificates of unenforceability

In circumstances where it appears to the EJO that a judgment debtor has no reasonable prospect of paying a judgment debt within a reasonable time, a certificate of unenforceability may be issued. These certificates are published and will impact the credit rating of a judgment debtor. A certificate of unenforceability will often be a ground for bankruptcy.

i.   Other orders

The EJO may make other orders such as:

  • debenture orders where the judgment debtor has a beneficial interest in a debt to a Northern Irish company or public body;
  • orders charging funds, stocks or shares;
  • stop orders which prevent any dealing with a judgment debtor’s interest in funds, shares or stock which, for example, are subject to ongoing court proceedings;
  • restraining orders which prevent a company incorporated in Northern Ireland from paying dividends to a judgment debtor in respect of shares, or dealing with those shares without the EJO’s consent; and
  • orders vesting certain funds which are made 3 months after an order charging funds has been made but where the judgment debt has still not been satisfied.  In such cases, the particular funds vest in the Chief Enforcement Officer.

These types of orders are less commonly encountered.

3.      What does the enforcement process look like?

Irrespective of the type of application that a creditor wishes to make, a typical enforcement application will follow the same key stages:

a.   First, a notice of intent to enforce is lodged in the EJO. The appropriate form (Form 1 or Form 2, as appropriate, depending on whether the judgment is a money judgment only, or a judgment for the recovery of land or goods (potentially coupled with a money judgment)) should be completed (in duplicate) by the judgment creditor accompanied by two copies of the relevant court order and the EJO fee.  Application packs are available from the EJO’s website.

Provided the notice of intent is complete and has been lodged correctly, the EJO will serve the form on the judgment debtor, after which the judgment debtor will have 10 days to make contact with the judgment creditor. If the judgment debtor does not resolve the judgment debt, the judgment creditor can then proceed to the next stage of enforcement. The notice of intent remains valid for 3 months.

b.   The second stage involves an application to enforce a judgment debt, which will include completion of a Form 3 or Form 4 (Form 3 follows a Form 1, and Form 4 follows a Form 2). A copy of the court order and a copy of the served notice of intent to enforce should be included in the application lodged in the EJO. The appropriate fee should also be paid. Once the EJO has processed the application, enforcement will commence.

The EJO decides the appropriate enforcement method, but the judgment creditor can give its view as to what it wants in any covering correspondence to the EJO. A judgment debtor may apply for a stay of enforcement at any time in the enforcement process, particularly in repossession cases.

The EJO has a detailed process for investigating a judgment debtor’s means. For example, Article 28 of the Order allows the EJO to require a third party to (a) attend its office or (b) produce all books or documents in its possession, if it believes that said third party may be able to give information as to the means of a judgment debtor. Accordingly, a creditor, who is not the applicant in a particular enforcement, may therefore be summoned to be examined as to the financial means of judgment debtor. The EJO may issue warrants of arrest against third parties suspected of evading a summons.

4.       How long will it take to enforce an order?

The length of time involved in successful enforcement of a judgment debt will vary depending on the relief obtained via the EJO. For example, an attachment of earnings order may take longer to be satisfied, as payments will be collected over a period of time. In the case of an order for possession of land or goods, provided there are no objections or stay applications raised by a judgment debtor, the process could successfully conclude within 3-4 months.

5.       Does a creditor have any duties during or after the enforcement process?

In order to assist the EJO with the enforcement process, a judgment creditor (or solicitors on their behalf) will be asked to complete a debtor questionnaire in order to allow the EJO to assess their financial means. The judgment creditor should also provide as much relevant information as possible.

In the event that an application is made to enforce an order for possession of land, a judgment creditor will need to conduct an occupancy search of the relevant premises and to certify the identity of persons in possession of the land. The judgment creditor may instruct an agent to conduct this search.

6.       Can I instruct a bailiff or other agent to enforce an order in Northern Ireland?

No. Unlike other jurisdictions in the United Kingdom and Ireland, Northern Irish legislation prohibits the use of bailiffs for the enforcement of court orders or debts. In fact, Articles 118 and 123 of the Order provide certain criminal offences in relation to debt collecting and enforcement by persons other than the EJO. Clients are therefore reminded that they should seek the advice of Northern Irish solicitors, such as Eversheds Sutherland’s Belfast office, when seeking to enforce or defend a court order.  

7.       What happens if I wish to enforce a non-Northern Irish order?

Pursuant to Article 4 of the Order, the EJO has the ability to enforce money judgments made by other courts outside Northern Ireland, including England and Wales, Scotland, the Republic of Ireland and in the European Union.

8.       What happens if (for example) a bank in England is served with an order by the EJO requiring it to give assistance to the EJO?

There is some debate about the ‘jurisdictional reach’ of the EJO. Taking attachment of debt orders as an example, the prevailing view is that they can only be made in respect of debts located in Northern Ireland.  Practically, if a bank in England receives such an order from the EJO, that bank should:

a.   contact the EJO and ask it (i) to confirm the legal basis for purporting to serve the order on it in England and (ii) what it considers the situs of the debt to be; and

b.   if the bank has a presence in Northern Ireland, and the debt is located in Northern Ireland, the bank should insist that the order is reserved on it at its Northern Irish location.

If a bank has an internal court orders team, it would also be prudent to remind them that payments should not be made pursuant to Northern Irish orders without further investigation. For example, if the bank were to make payment against a Northern Irish attachment of debt order, there is a real risk (amongst other things) that this would not discharge the underlying debt which the bank owes to the judgment debtor.

9.       How does this contrast with the position in relation to freezing orders and disclosure orders?

Disclosure orders, or freezing orders, are made by the High Court in Northern Ireland and sit outside the EJO process. Put simply, such orders would not be immediately enforceable in, for example, England or other jurisdictions.

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