Where a judgment debt is assigned, the party to whom it is assigned can have no better claim than the party assigning it. Payment of the judgment debt in full by other co-defendants will extinguish the right to claim any contribution under the judgment debt itself.
In Crooks v Newdigate Properties Ltd and others, the claimant brought proceedings against five defendants. The proceedings were settled by consent against all but the third defendant with the claimant's claim in effect being paid in full. A judgment in default for the full amount had been obtained against the third defendant. It was a term of the consent order settling the proceedings that the judgment against the third defendant be assigned to the second defendant. That judgment was later assigned to the fourth defendant who sought to enforce it.
The third defendant contended that his liability under the default judgment had been extinguished by the payment in full of the claim by the other defendants pursuant to the consent order. Credit had to be given for payments received by the claimant as the assignee could be in no better position than the claimant was. Further, the remaining defendants could have sought a contribution from him under the Civil Liability (Contribution) Act 1978, but had failed to do so within the two year limitation period provided for.
The Court of Appeal agreed. The terms of the consent order did not release the third defendant from the judgment against him but the judgment debt was extinguished by the payments made by the other defendants under the consent order by the time of assignment. Assignment of a debt did not change the character of a debt. Payments by the other defendants necessarily reduced or extinguished his liability and the assignee could be in no better position than the assignor. Credit had to be given for sums paid. The debt had been extinguished and there was nothing for the fourth defendant to pursue.
Things to consider
Those taking an assignment of a debt need to satisfy themselves that there is something capable of being assigned and that the judgment debt has not in fact been satisfied in full, leaving the assignee nothing to enforce. The defendants here would have been better placed to pursue a claim for contribution against the fourth defendant within the two year time limit provided for.