Andrew Pena is a senior assistant solicitor at Allison & Humphreys.
On 29 January 1997 Mr Justice Colman delivered a judgment in Soinco SACI and anor v Novokuznetsk Aluminium Plant & ors which, although it added to the remedies available to a judgment creditor, has received relatively little attention.
Mr Justice Colman's decision provides for the appointment of a receiver by way of equitable execution over future debts.
It is good news for plaintiffs and receivers since it opens up a new and fruitful avenue for seizing current and future assets of a judgment debtor.
Mr Justice Colman expressly recognised that "the purpose of [this new] remedy would be to supplement the legal process of execution by garnishee proceedings".
Garnishee proceedings attach only debts due or accruing due at the time the garnishee order nisi is served. Garnishee proceedings do not reach future debts.
As Mr Justice Colman said, "since that process does not apply to future debts and since it cannot be commenced in anticipation of debts accruing due at a later stage, there is much to be said for the availability of a remedy which would enable the judgment creditor to acquire information as to future debts to enable him to effect collection from third parties as and when they fell due".
Having determined that the court had jurisdiction to appoint a receiver by way of equitable execution, Mr Justice Colman then had to consider whether that jurisdiction ought to be exercised.
A court can still appoint an equitable receiver only where it is "just or convenient… [having] regard to the amount claimed by the judgment creditor, to the amount likely to be obtained by the receiver and to the probable cost of his appointment". The judge accepted "that this is a case in which the court ought to exercise its jurisdiction in favour of the appointment of a receiver".
Although Mr Justice Colman's decision is ground-breaking in the field of enforcement, it must be approached with a degree of caution. It has not been tested before the Court of Appeal – in Soinco, the parties reached a compromise which prevented the appointment of a receiver.
We will have to see if Mr Justice Colman's prediction that this new remedy is "likely to be extremely useful as an ancillary form of execution" stands the test of time.