Recovery of Interest under Charging Order

The local current White Book (para 50/9A/15) concerns the recovery of interest on judgment debt over a period of more than six years under a charging order.

In Ezekiel v Orakpo [1997] 1 WLR 340, the Court of Appeal states that the right of recovery is not affected by s. 20(5) of the Limitation Act 1980 [equivalent to s. 19(5) of the Limitation Ordinance (Cap. 347) (the “Ordinance”)]. Section 20(5) aforesaid provides:

no action to recover arrears of interest payable in respect of any sum of money secured by a mortgage or other charge … shall be brought after the expiration of six years from the date on which the interest became due.

The Court of Appeal came to a view in unison that on the discharge of a charging order, the debtor shall pay off outstanding interest that runs over six years, as well.
I searchingly reviewed various English judgments and eventually noticed that the House of Lords in Lowsley and Another v Forbes (Trading as LE Design Services) [1998] 3 WLR 501 (29 July 1998) said:

There would seem to be no reason why the relevant words in section 24(2) (of 1980 Act) [equivalent to s. 4(4) of the Ordinance] ‘no arrears of interest (in respect of any judgment debt) shall be recovered (after the expiration of six years from the date on which the interest became due)’ should not be given their ordinary meaning, so as to bar execution after six years in respect of all judgments. It is what the words say. ‘Recovered’ has a broad meaning. It is not confined to recovery by fresh action.

After poring over ancient laws and looking behind the enactment of the Limitation Acts, their Lordships reached the decision that interest on the judgment is limited under the aforesaid s. 24(2). To this day, the aforesaid topic about s. 19(5) is, as I observe, still raised by peers. However, years glided by, and no updates have been made on this topic. I ache to ask the Editor to revisit the matter, and give further comment on the oncoming edition of the White Book.

By Tony WH Luk, Solicitor Ko & Chow