Charging order (Civil Procedure Act s 106(1)(c), UCPR 39.44) (Form 74)

A charging order is one of the ways a Supreme Court or District Court judgment debt may be enforced (Civil Procedure Act 2005 s 106(1)(c)). Made on the judgment creditor's motion (Form 73, UCPR r 39.44), it charges each security interest specified in it in favour of the judgment creditor to the extent necessary to satisfy the judgment, and restrains the chargee (for example the company or financial institution) from dealing with it otherwise than as the judgment creditor directs (CPA s 126(2)). Form 74 (version 2) is the approved order. It takes effect when it is made (s 126(3)), and while it is in force any transfer or disposal by the debtor contrary to the creditor's directions is of no effect against the creditor (s 128).

When you need it

• The court has granted your Form 73 motion and you need the order in the approved form to issue and serve.
• You are a company, bank or trustee (the chargee) who has received a charging order and need to understand what it requires.

1. 1

   Court details and title

   Copy the case details from the proceedings in which judgment was given.

2. 2

   Charging order details

   Name the chargee, the judgment creditor and judgment debtor, state the amount outstanding under the judgment, and list each security interest in specific terms (for example "1,000 ordinary shares in X Ltd held by the judgment debtor").

3. 3

   Orders 1 and 2

   These are printed: the interests are charged to the extent needed to satisfy the judgment, and the chargee is restrained from dealing with them except as the judgment creditor directs, until further order or until the judgment is satisfied.

4. 4

   Issuing details

   Completed by the court: date made, place issued, signature and capacity.

5. 5

   Judgment creditor's details

   Give the judgment creditor's name, address for service and contact details so the chargee knows whose directions to follow.

• The order is issued by the registry of the Supreme or District Court after the motion is granted. The application rules are in UCPR rr 39.44 and 39.45.
• Serve a copy on the chargee. A chargee or other person who deals with the charged interest after having notice of the order is liable to the judgment creditor up to the value of the interest (CPA s 127).
• The judgment creditor cannot start proceedings to take the benefit of the charge until 3 months after the date of the order (CPA s 126(4)).

• Describe each security interest precisely enough for the chargee to identify it without further enquiry.
• Check the amount outstanding against your Form 73 affidavit so the order and evidence match.
• The restraint lasts until further order or until the judgment is paid in full, so tell the chargee promptly when the debt is satisfied.