Court of Appeal – Payment by director fails to satisfy company’s judgment debt (56 Fellows Road Limited v ABC Block Management Ltd)

56 Fellows Road Ltd v ABC Block Management Ltd [2026] EWCA Civ 401.

What are the practical implications of this case?

This is a somewhat unusual case on the facts and appears to have come about as a result of the approach taken by a HCEA in seeking to enforce a judgment debt. The sole director of the judgment debtor company sought to exploit both a somewhat heavy-handed approach to enforcement taken in this case and the failure of the agent properly to distinguish liabilities of the debtor company from those of the sole director to his advantage. It provides a salutary lesson, as well as some helpful analysis about the applicable test for determining whether a company’s sole director has discharged obligations owed by the company by making payments himself.

What was the background?

On 15 June 2022, a HCEA attended a residential premises which was the home of a Mr Wolanski. The purpose of the visit was the enforcement of a judgment debt of £7,731.28 which had been obtained by ABC Block Management Ltd (ABC) against 56 Fellows Road Ltd (56FR). Mr Wolanski was the sole director of and minority shareholder in 56FR. The sum claimed by the HCEA was £9,967.56, owing to the addition of enforcement costs added to the judgment debt. Mr Wolanski’s phone was taken by the HCEA, claiming it to be an asset of 56FR. Mr Wolanski’s son was also present and became distressed. In those circumstances, Mr Wolanski made a payment of £9,967.56 using his personal debit card. Mr Wolanski then filed a Form E4 complaint against the HCEA in which he alleged that he had been compelled by the HCEA into personally paying the debt, which was owed by the company 56FR. Mr Wolanski twice attempted unsuccessfully to claw back the payment made. An agreement was ultimately made between Mr Wolanski and the HCEA’s employer pursuant to which in consideration for the withdrawal of the complaint, the sum of £9,967.56 would be paid to Mr Wolanski by the HCEA’s employer as a gesture of goodwill.

ABC then applied for a charging order by way of alternative means of enforcing its judgment debt. The application for a charging order was dismissed by DJ Moses but granted later on appeal by HHJ Baucher. 56FR then appealed again.

What did the court decide?

The Court of Appeal held that Mr Wolanski was raising essentially contradictory positions. Having for a significant time argued that he had made the payment to the HCEA in his personal capacity, in 56FR’s response to the charging order application he changed his position to one in which he argued that the debit card payment was made by 56FR and discharged its liability to pay the judgment debt. The Court of Appeal was satisfied that the factual conclusions reached by His Honour Judge Baucher were correct and saw no reason to overturn them. She had given significant weight to the fact that Mr Wolanski had made two chargeback requests of his bank after the debit card payment had been made and had demanded of the HCEA’s employer that while they were being considered they did not remit the funds to ABC. On a proper legal analysis of the facts, the debit card payment was made by Mr Wolanski in his own capacity. That being so, the HCEA had no right to retain it and properly returned it in the course of the agreement reached for the withdrawal of Mr Wolanski’s complaint. The judgment debt remined and the charging order had been properly granted.

Case details

• •Court: Court of Appeal, Civil Division
• •Judges: Lord Justice Newey, Lady Justice Elisabeth Laing and Lord Justice Cobb
• •Date of judgment: 31 March 2026

Written by Phillip Patterson

This article was first published by LexisNexis