It is not very often the goal posts move in the direction of finance houses and creditors. In fact, there seems to be a steady stream of traffic in the opposite direction. However, earlier this year, in the case of Blight and Brewster, the High Court got to grips with how a judgment creditor might enforce its judgment against assets held in a debtor’s pension fund. In respect of the fund, the debtor had a right to elect to draw down 25% of his pension as a tax free sum. Historically, a pension fund has been considered beyond the reach of a judgment creditor. In this case the court looked specifically at how the creditor might compel the debtor to exercise the right to draw down and make funds available to satisfy the judgment debt.
Inevitably the case raised a number of technical issues, for instance should a Receiver be appointed over the asset and by this route exercise the right to elect the draw-down of monies from the fund? The court accepted the argument that in the interests of justice, debtors should not be allowed to hide their assets in pension funds when they had a right to withdraw monies which were needed to pay their creditors. The case established that orders can be made, in effect, requiring the debtor to delegate the power to draw down on the fund to the creditor’s solicitors and for the court to make a supporting order authorising the creditor’s solicitor to make the decision on behalf of the debtor.
It will not apply in all cases where the debtor has a pension fund. The debtor needs to be in a position to make the draw down himself but has not yet done so. There will, however, be cases where the type of orders obtained here should be applied for. The key steps are to get a judgment and to identify the pension fund.
Similarly, in the context of bankruptcy proceedings, the High Court has ruled recently in the case of Raithatha and Williamson that an undrawn pension can be made subject to an income payments order requiring payments to be made by the debtor to his trustee in bankruptcy. Such an order will benefit all creditors rather than just the judgment creditor, but very much a step in the right direction.