In Paratus AMC Ltd v Lewis [2014] EWHC 1577 (Ch)  the court considered whether relief can be granted where a party is found in contempt of court under a court order even if that order contains a mistake.

Background

The claimant obtained an order for possession of the defendant’s property in 2005. The property was taken into possession in 2013 and later sold. Under the mortgage terms, the claimant redeemed its outstanding costs on the sale, leaving surplus funds of £181,461.46. The court ordered this surplus sum to be paid into court. Subsequently, the claimant noted that costs had been incorrectly calculated and as such, deducted those outstanding costs from the surplus funds and paid a lesser amount to the court.

The defendant made an application to the court and the claimant was ordered to comply with the previous order. The claimant attempted to vary the previous order by providing a witness statement but this did not address why a smaller sum had been paid into court than the amount ordered.

Held

The court found that the appropriate course of action would have been to apply for a variation of the order or to have paid the ordered sum into court and apply back for the order to be varied and a payment returned from the overpayment.

The claimant’s application to vary the order was successful as there was a contractual right to deduct the sums from the proceeds of sale however the claimant were ordered to pay the defendant’s costs and in addition, due to the contempt, the claimant was ordered to pay for a transcript of the hearing to be published.

Comment

Where a court order contains any error or omits information, an application should be made at the earliest opportunity to amend or vary the order.