We have always advised clients that the Limitation Act 1980 does not apply to the Enforcement of charging orders by application for an order for sale, so that you can apply to enforce at any time.

Arguments have been raised that enforcement is limited to 6 years or 12 years from the making of the Charging Order, however this is not the case.

In advising, we have relied upon the Court of Appeal decision in Ezekiel v Orakpo [1977] 1 W.L.R. 340. In that case a charging order had been made in 1982 to secure a Judgment debt secured in 1979. The judgment creditor did not look to enforce the charging order until almost 12 years had elapsed since the making of the charging order. The court of Appeal held that the judgment creditor was not bringing an action on the judgment or seeking to enforce the judgment. He was seeking to enforce his rights as a secured creditor under the equitable charge created by the charging order. As such the Limitation Act did not apply.

The Court of Appeal has just reviewed the law in this area in Yorkshire Bank Finance Ltd v Mulhall [2008] EWCA Civ 1156. The judgment was given on 24 October 2008 and confirms our advice. Lord Justice Lloyd stated “The enforcement of a charging order by normal means is not barred by section 20(1) [of the Limitation Act 1980], and unlike the position under a legal Mortgage, the creditor’s rights are not barred after 12 years”.

You do not therefore have to concern yourself with enforcing the charging order within 6 years or 12 years, as your Security will remain and can be enforced at a later date under normal circumstances.

If you require any further information relating to this publication, please contact, Mark Taylor.