Brake & Anor v Guy & Ors [2022] EWHC 1746 (Ch)11 July 2022

Published: 07/09/2022 09:00

HHJ Paul Matthews. Application for a third party debt order (TPDO; formerly a garnishee order) against the trustees of Mr Brake’s SIPP. The debt was in relation to the costs of litigation lost by Mr Brake.

Brake had already taken the tax-free lump sum from the SIPP and was entitled to drawdown further monies albeit subject to tax. Pension fund claimed that there was no cash to which the TPDO could attach as the monies were invested. Had it been cash then the fact he had to request the money or that the exact amount could not be known until the tax liability and costs had been deducted did not prevent it from being sufficiently certain to be garnished. However, what Mr Brake actually had was ‘a beneficial interest in those investments (subject to tax and costs).’ This was fatal to the TPDO being made final.

Alternative ways to extract money from pension:

  1. Liquidate fund by appointing receiver to revoke trust; the liquidated funds would constitute a debt to which the TPDO could attach.
  2. As in Blight v Brewster [2012] EWHC 165 the easier route would be for Mr Brake to delegate his power to receive the funds to someone acting on behalf of the creditor. The pension fund would have no discretion to refuse this, even if not in Mr Brake’s best interests. FCA conduct rules did not apply.

Second route chosen: it was just and convenient for the court to make an injunction ordering Mr Brake to exercise his right to draw down his remaining pension entitlement from the third party.

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