Services / Enforcement and asset recovery
Rateable distribution: fifteen days to file
Where another creditor has already seized the debtor's property, a later creditor cannot seize it again. That does not mean the right is gone: the Code provides for sharing, subject to a short deadline and one condition the court must be satisfied of first.
No second seizure, but a share instead
Section 326 of the Civil Procedure Code provides that once property has been seized or a claim attached to satisfy one judgment creditor, other judgment creditors may not have the same property seized or the same claim attached again. Instead they may petition the court that issued the writ for an order allowing them to share, in proportion to the amounts of their judgment debts.
The condition the court must be satisfied of
The second paragraph is explicit: the court must not allow such a petition unless satisfied that the applicant cannot obtain satisfaction from the debtor's other property. Sharing is therefore not something that follows automatically from being a judgment creditor. The applicant has to show that other assets were looked for and that no other route to payment was found.
Fifteen days, and what they run from
The deadline varies with the method of execution. Where property was seized for sale by auction or otherwise, the petition must be filed before the end of fifteen days from the day the sale took place on that occasion. Where a claim was attached, before the end of fifteen days from the day of payment or of the sale of that claim. Where money was seized, before the end of fifteen days from the seizure.
The officer must hold the money
The final paragraph provides that once a copy of the petition has been served on the execution officer, the officer must withhold payment of the money or property until the court has ruled. Serving that copy is therefore a step with effect of its own rather than a formality, because it is what holds the funds while the ruling is awaited. When the court has ordered and notified the officer, the officer acts accordingly.
Where a tax authority has seized
The third paragraph deals separately with an authority empowered by tax or other legislation to seize the debtor's property or attach claims on its own. If it seized or attached first, it may share without being subject to the second paragraph — that is, without showing it cannot be satisfied from other property. If it did not seize first, it shares on the same footing as any other judgment creditor.
PREPARE
What to bring
- Your own judgment and writ of execution
- Details of the case in which the seizure was made
- The date of the sale, the payment, or the seizure of money
- Evidence of the search for the debtor's other assets
- The outstanding balance of your judgment debt
QUESTIONS
Questions this raises
Why do older materials cite section 290 and fourteen days?
Rateable distribution used to sit at section 290 with a fourteen-day period. It is now section 326 with fifteen days. What deserves particular care is that section 290 still exists in the current Code, but as a provision about staying execution — an entirely different subject. Citing the old number therefore lands on a live section about the wrong thing, which is harder to catch than citing a number that has been repealed.
I am a few days late. Is anything possible?
Section 326 speaks of filing before the end of fifteen days from the day specified for each situation. The first thing to check is therefore exactly when the triggering event occurred, since each method of execution has its own starting point, and where there have been several auctions the period is counted by reference to the occasion on which the sale went through.
LAW
The legislation
- Civil Procedure Code, section 326
ENQUIRIES
