Case No: CHBKF 1999/0769/B3
 
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
HIS HONOUR JUDGE WEEKS QC
Royal Courts of Justice
Strand, London, WC2A 2LL

Friday, 26th May 2000

B e f o r e :

LORD JUSTICE MORRITT
LORD JUSTICE CHADWICK
and 
MR. JUSTICE CHARLES
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	DACORUM BOROUGH COUNCIL		Appellant	
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	HORNE	Respondent	

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040,  Fax No:  0171 831 8838
Official Shorthand Writers to the Court)
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Mr. Jonathan Moffett  (instructed by  Dacorum Borough Council for the Appellants)
Miss F. Toube (instructed by  Messrs Quinney Jaggar for the Respondents)

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Judgment
As Approved by the Court

Crown Copyright ©

Lord Justice Chadwick:

1.	This is the judgment of the Court on an appeal from an order made on 22 June 1999 by His Honour Judge Weeks QC, sitting as a Judge of the High Court in the Bristol District Registry of the Chancery Division, in bankruptcy proceedings brought b
y Dacorum Borough Council against Mr Christopher Horne. The judge allowed appeals by Mr Horne from orders which had been made on 5 January 1999 and 22 March 1999 by the District Judge; but he gave the Council permission to appeal to this Court.  The appeal raises two distinct points in relation to a statutory demand served under section 268(1)(a) of the Insolvency Act 1986. One of those points, at least, is of some general importance.

The underlying facts
2.	The facts which give rise to this appeal may be stated shortly:
	(1)     On 28 October 1993, the Council obtained judgment in proceedings in the Hemel Hempstead County Court against Mr Horne, as guarantor of the obligations of Matchbox Properties Limited under a lease, in the sum of £11,182.80, with costs of £350. The judgment contained an order that the total sum (£11,532.80) be paid to the Council by way of £500 within seven days and then by instalments of £500 for every calendar month from 1 December 1993 until 1 February 1994, “when the balance of the debt and costs was to be paid”. A notice was endorsed on that judgment, in what appears to be a standard form:
	If you do not pay in accordance with this order your goods may be removed and sold or other enforcement proceedings may be taken against you. If your circumstances change and you cannot pay, ask at the Court Office about what you can do.

(2)	Mr Horne made the first payment of £500 required by that order on or about 23 November 1993. But he made no further payments during the period to 1 February 1994; and he did not pay the balance on that date. On 1 October 1994 the matter was back before the Hemel Hempstead County Court on Mr Horne’s application to vary the order of 28 October 1993. The District Judge made the following order, by consent:
	It is ordered that the previous orders be varied and that the second defendant (Christopher Frederick Horne) do pay instalments of £250 on the 20th day of each calendar month until 20th September 1995, when the matter will be reviewed by this Court in the light of the circumstances then prevailing.”

	(3)	Mr Horne had made a payment of £250 on 12 September 1994, in anticipation of the variation that he was seeking, and he made one further payment of £250 on 25 November 1994. He made no further payments under the order of 28 October 1993, as varied on 1 October 1994. It follows that, by the date for review referred to in that later order (20 September 1995) eleven instalments of £250, amounting together to £2750, had fallen due under the instalment payments order and had not been paid.

	(4)	Neither Mr Horne nor the Council sought any review of the instalment payments order on or immediately after 20 September 1995. A year went by. On 16 October 1996, the Council gave notice of its intention to support a bankruptcy petition presented by National Westminster Bank plc and to oppose an Individual Voluntary Arrangement proposed by Mr Horne. That prompted an application by Mr Horne to the Hemel Hempstead County Court. On 25 November 1996, the District Judge at Hemel Hempstead made an order that the matter be transferred to Swindon – that being the County Court in which the IVA application was pending – and directed that, if Mr Horne wished to pursue his application for a review of the instalment payments order he should file and serve an affidavit setting out a full chronology and exhibiting relevant correspondence and documents setting out particulars of the relief sought. Mr. Horne’s own note of the hearing on 25 November 1996 records:
	Mr Horne explained that due to action taken by [the Council] in other proceedings, and his move to Devizes, Wiltshire, he wished the review ordered by District Judge Arnold when he stayed the matter on terms on 1 October 1994 to take place.

	District Judge Trent asked Mr Higginson [the solicitor appearing for the Council] what was the view of the [Council]. Mr Higginson confirmed the consent order of 1 October 1994, but stated that the [Council] felt no need for the review, ordered to take place not earlier than 20 September 1995, to take place at this time, since the [Council] was not currently pursuing the matter.

	Mr Horne stated that as the matter therefore remained stayed there was no urgency for the review.

	(5)     Mr Horne’s proposals for an IVA were rejected on 19 December 1996. The National Westminster Bank’s petition seeking Mr Horne’s bankruptcy was adjourned from time to time during 1997 and was eventually dismissed (on 25 September 1997) on the basis that the bank’s debt had been paid off and there was no creditor entitled to be substituted as petitioner. 
(6)	It was in those circumstances that the Council decided to serve a statutory demand in respect of the judgment debt which it had obtained on 28 October 1993. The demand, which is in the prescribed form 6.2, is dated 16 April 1998. It is not in dispute that it was served on Mr Horne by substituted service on or about 1 May 1998. The amount claimed is £13,261.18; said to comprise the balance outstanding under the judgment (said to be £10,182.80) and interest from the date of judgment on the rent arrears (£3,078.38). In computing the balance said to be outstanding under the judgment (£10,182.80) the Council has deducted the instalments actually received (together £1000) from the amount of the debt and interest recorded in the judgment (£11,182.80) but has not included the costs (£350) which it was awarded on 28 October 1993. The effect is that, on its face, the amount claimed in the statutory demand appears understated by £350; but nothing turns on that. 
	(7)     The prescribed form of statutory demand includes provision for signature by an individual on behalf of the creditor. In the present case the name “Keith Pugsley” appears in manuscript in the place for signature. Below that, against the instruction “Name (BLOCK CAPITALS)” there have been typed the words “Keith Pugsley”. Mr Pugsley’s “Position with or relationship to creditor” is entered as “solicitor and director of law and administration”. The statutory demand continues with the statement: “I am authorised to make this Demand on the Creditors’ behalf.” An address, telephone number and reference number at which communication can be made with Mr Pugsley are included on the form, as required.
	(8)	Mr Pugsley is, or was at the material time, the Director of Law and Administration employed by the Council. But, as the judge explained in his judgment, the Council accepted that the statutory demand had not been signed by Mr Pugsley personally. The manuscript entry which appears as his signature was made by another employee in Mr Pugsley’s Department. In an affidavit sworn on 15 March 1999, Mr Pugsley explained the position in these words:
4.	All the original documents shown on pages 1 - 5 (inclusive) of the Exhibit were signed on my behalf by legal officers within the employment of the Council and for whom, as Director of Law and Administration, I am responsible.

5.	Dacorum Borough Council has duly authorised me, as its chief legal officer, to institute and conduct legal proceedings on its behalf, and to sign any document necessary to facilitate such conduct. The legally qualified staff within my Department of Law and Administration are duly authorised by me to sign all notices, demands and other notices required for the conduct of business.

6.	None of the documents referred to in 4 above, were signed by me personally nor were they required to be.

	7.	Section 101(1)(a) of the Local Government Act 1972, provides that a Local Authority may arrange for the discharge of any of its functions by an officer of the authority. I am an officer of the authority known as Dacorum Borough Council, a local authority for the purposes of the 1972 Act.”

The documents referred to in paragraph 4 of that affidavit are the consent order for instalment payments placed before the District Judge on 1 October 1994, what appears to be an earlier version of that order, the last page of the particulars of claim leading to the October 1993 judgment, an earlier statutory demand (referred to by the judge in his judgment) dated 21 March 1994, and the statutory demand dated 16 April 1998.  
(9)	On 21 May 1998 Mr Horne applied to set aside the statutory demand dated 16 April 1998. In support of that application he asserted that execution of the October 1993 judgment had been stayed by order of the Hemel Hempstead County Court “and that Keith Pugsley of Dacorum Borough Council consented to the stay”; that he was prepared to meet such payments as the court might order “and that the correct procedure is for the Council to return to the County Court for further directions”. On 11 September 1998, in the absence of Mr Horne, a District Judge at Swindon dismissed that application. 
	(10)    On 26 October 1998, the Council presented a bankruptcy petition. Mr Horne gave notice of intention to oppose the bankruptcy petition. On 17 December 1998, he swore a further affidavit, purportedly in support of his earlier application to set aside the statutory demand. That affidavit includes the following paragraphs:
	17.	Eventually agreement was reached and (CH-09) consent order drafted and taken before District Judge Arnold by myself and Roy Higginson on 1 October 1994. At my request District Judge Arnold pointed out that the order did not make me a judgement debtor under the order of 28 October 1993 and that the matter could not be pursued until after the review of the matter had taken place and that that review could not take place before 20 September 1995.
	. . . 
	24.	On 25 November 1996, District Judge Trent confirmed the stay (CH-17) . . . He stressed I was under no obligation to seek the review and therefore did not put any time limit on the directions and Roy Higginson for Dacorum confirmed that, in his opinion,  Dacorum had a judgement against me but that it was stayed. The matter has never been pursued by either side.

	(11)	On 5 January 1999, the District Judge, sitting at Bath, set aside the earlier order made in Swindon on 11 September 1998 –  on the ground that it had been made at a hearing at which Mr Horne had been unable to be present - but, after hearing counsel for both parties, dismissed the application to set aside the statutory demand. He adjourned the hearing of the bankruptcy petition to 22 March 1999.
	(12)	On 29 January 1999, Mr Horne made application to the Swindon County Court to vary any order that might be in existence for payment of moneys by him to the Council. In that application he asserted that he could not pay any such amounts. He offered to pay £10 a month towards the indebtedness. That application was adjourned to be heard with the bankruptcy petition on 22nd March 1999.
	(13)	On 22nd March 1999 the adjourned application to vary the instalment payments order and the adjourned bankruptcy petition came back before a District Judge at Swindon. There was before the District Judge a further affidavit, sworn by Mr Horne on 22nd March 1999 which included the following paragraphs:
	6.	To return to the main matter, in October 1994, an attempt was made to bankrupt me by H.M. Customs and Excise and the Plaintiff and, during negotiation prior to the hearing of the Petition a hearing took place before District Judge Arnold in the Hemel Hempstead County Court on 1 October 1994, attended by Mr Higginson on behalf of the Plaintiff and myself in person, a Consent Order having been agreed between us.

	7.	On reading the Consent Order District Judge Arnold drew the specific attention of both Mr Higginson and myself to [that] the way that the order was worded. He pointed out that as a result of the words “until 20 September 1995, when the matter will be reviewed by this Court in light of circumstances then prevailing” the Plaintiff could take no enforcement action until after the matter had been reviewed by the Court, and that the review could not take place before the 20 September 1995.

	8.	There was very good reason for the delay. I had taken firm action to minimise my liability under the guarantee by arranging for Matchbox Properties Limited to vacate the property and for two new tenants who were together paying in excess of the previous rent. In the intervening five years Dacorum Council have, therefore, fully recovered the Matchbox Properties debt. Mr Higginson and I had informal agreement to this effect and he told me in 1995 (during two years when the Council took no action in support of their debt) that the debt had been written off.
	. . .

	10.	To regularise matters, an application for review was then made before District Judge Trent who adjourned it noting the words “following the previous stay” on 25 November 1996. Mr Higginson told District Judge Trent that the Plaintiff did not wish, in all the circumstances to seek a review and intimated that the Plaintiff did not regard me as still being obligated to them. Quite frankly, having heard that, being involved in Bankruptcy proceedings as well as other litigation, and knowing that I could rely on the Order agreed before District Judge Arnold, I let matters rest, and took no action to follow the directions set out by District Judge Trent.

The District Judge treated Mr Horne’s application to vary the existing orders of 28 October 1993 and 1 October 1994 as an application for an instalment payments order. He dismissed that application, and he adjudged Mr Horne bankrupt.

3.	Mr Horne appealed to the High Court, under section 375(2) of the Insolvency Act 1986, against (i) the order of 5 January 1999 (dismissing his application to set aside the statutory demand) and (ii) the bankruptcy order of 22 March 1999. There was no appeal, so far as we are aware, against the refusal of the District Judge on 22 March 1999 to make a further instalment payments order.

4.	Those appeals came before His Honour Judge Weeks QC on 22nd June 1999. The judge gave permission to appeal out of time against the order of 5 January 1999. He allowed that appeal and set aside the statutory demand. It followed that he dismissed the bankruptcy petition and annulled the bankruptcy. It is from that order that the Council appeals to this Court.

The judge’s reasons.
5.	The judge gave two reasons for his decision to set aside the statutory demand. The first is found at pages 23G-24B in the transcript of his judgment:
In my judgment the major part of the debt was not due when the statutory demand was issued and the particulars are misleading in making no reference to the instalment orders.

Because District Judge Rutherford took a different view on construction, I can, I think, exercise my discretion afresh, and on this ground alone I will set aside the statutory demand.

The District Judge had taken the view that, as soon as instalments fell into arrears under the instalment payments order of 28 October 1993, as varied on 1 October 1994, the full amount of the balance of the judgment debt became payable. It was on that point, described by the judge as a point of construction, that His Honour Judge Weeks QC took a different view.
 
6.	The second reason given by the judge for setting aside the statutory demand was that it had not been signed personally by Mr Pugsley. The judge said this, at pages 24C-27F:
Rule 6.1 [of the Insolvency Rules 1986] requires that a statutory demand must be signed either by the creditor himself or by a person stating himself to be authorised to make the demand on the creditor’s behalf. Mr Pugsley is so authorised by the Council. 
. . .
To me, ‘signed’ means that the person in question must have written his own name in his own hand. That did not happen in the present case, and what I think makes it worse is that the unidentified person who wrote Mr Pugsley’s name gave no indication that this was not Mr Pugsley’s handwriting.

Rule 6.1 is there for the debtor’s protection because it requires the creditor to focus on the statutory demand either by signing it himself or by authorising someone to make the demand on his behalf, who will then sign the statutory demand.
. . . 
[Mr Pugsley’s] affidavit . . . leaves me with the impression that statutory demands are routinely prepared, signed and sent out by his department, without him having ever seen them. If that is correct, it would be a pernicious practice which the Courts should not condone. The making of a bankruptcy order is a serious matter and statutory demands, which initiate the process, are important documents.

In this specific case, Mr Pugsley does not say that he told someone to prepare the demand, approved it personally and was, unfortunately, out of the office when it came to be signed. If that had been the case, I might well have overlooked the defect. Significantly, he does not even say that he would have approved and signed the statutory demand personally, if he had seen it before it was served.

The point of the requirement for signature in the case of a local authority, is to have the demand approved by an appropriate person, at an appropriate level in the hierarchy.

7.	Whether or not the judge was correct to set aside the statutory demand for the first of the two reasons which he gave is, indeed, a question of construction. It turns upon the true construction and effect of the orders made on 28 October 1993 and 1 October 1994. But those orders fall to be construed with the framework formerly provided by the County Courts Act 1984 and the County Court Rules 1981 for the enforcement or execution of judgments. To that extent, the point is of some general interest; although it must, of course, be kept in mind that the former County Court Rules have been replaced by the Civil Procedure Rules 1998 – so that an understanding of the former rules will become (if it has not already become) of little importance in practice. But the question whether or not the judge was correct for the second of the reasons which he gave is of continuing importance. It seems to us probable that the practice of signing in the name of a person who does not apply his own hand to the document may be widespread amongst government departments, local authorities, utilities and other large organisations. Further, it is to be expected that the practice may grow with the increasing use of computer generated facsimile signatures. If the judge be correct in his view that a statutory demand will be defective if not actually signed by the hand of the person whose signature it purports to bear, the consequences may be far-reaching.

The need for a debt which is payable immediately 
8.	Section 267(2) of the Insolvency Act 1986 restricts the circumstances in which a creditor’s petition may be presented to the court. So far as material the subsection is in these terms: 
A creditor’s petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented -
(a)	. . . ,
(b)	the debt, or each of the debts is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured,
(c)	the debt, or each of the debts, is a debt which the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay, and
(d)	there is no outstanding application to set aside a statutory demand served (under section 268 below) in respect of the debt or any of the debts.

Section 268 provides that:
(1)	For the purposes of section 267(2)(c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either-
(a)	the petitioning creditor to whom the debt is owed has served on the debtor a demand (known as “the statutory demand”) in the prescribed form requiring him to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules, or 
(b)       . . . 

(2) 	For the purposes of section 267(2)(c), the debtor appears to have no reasonable prospect of being able to pay a debt if, but only if, the debt is not immediately payable and -
(a)	the petitioning creditor to whom it is owed has served on the debtor a demand (also known as the “ statutory demand”) in the prescribed form requiring him to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due,
(b)	at least 3 weeks have elapsed since the demand was served, and
(c) 	the demand has been neither complied with nor set aside in accordance with the rules.

9.	The distinction between debts payable immediately (section 268(1)) and debts not immediately payable (section 268(2)) is reflected in the provisions of rule 6.1(2) and (3) of the Insolvency Rules 1986:
(2)	The statutory demand must specify whether it is made under section 268(1) (debt payable immediately) or section 268(2) (debt not so payable).

(3)	The demand must state the amount of the debt, and the consideration for it (or, if there is no consideration, the way in which it arises) and,
(a)	if made under section 268(1) and founded on a judgment or order of a court, it must give details of the judgment or order, and
(b)	if made under section 268(2), it must state the grounds on which it is alleged that the debtor appears to have no reasonable prospect of paying the debt.

It is not in dispute that this appeal must be determined on the basis that the debt relied upon is said by the Council to be a debt payable immediately; but it is of importance, to appreciate that a petition for bankruptcy can be presented in circumstances in which the debt is not immediately payable, provided that it is payable at “some certain, future time” – see section 267(2)(c) – is unsecured, and is a debt which the debtor appears to have no reasonable prospect of being able to pay.

10.	A statutory demand may be set aside on an application under rule 6.4 of the Insolvency Rules 1986. The grounds upon which the court may do so include that in rule 6.5(4)(d):	“that the court is satisfied . . . that the demand ought to be set aside”. It is not in dispute that it is the practice of the court to set aside a statutory demand if satisfied that the demand could not found the presentation of a bankruptcy petition. The reason is that that is the purpose of a demand under section 268 of the Insolvency Act 1986; and, if that purpose cannot be fulfilled, the court should recognise that at an early stage by setting the demand aside – see the observation of Sir Donald Nicholls, Vice-Chancellor, in In re a Debtor (Nos 49 and 50 of 1992) [1995] Ch 66 at page 70E. It follows that, if the debt can be shown not to be payable immediately, a statutory demand served under section 268(1)(a) – and stated to be so under rule 6.1(2) – ought to be struck out. In such a case the creditor should be left to proceed (if he can) by serving a demand under section 268(2) of the Act. 

The County Courts Act 1984 and the County Court Rules 1981
11.	The question, therefore, in the present case, is whether the judgment debt relied upon in the statutory demand (or any substantial part of that debt) was a debt payable immediately at the date when the statutory demand was served (1 May 1998). That turns on the true effect of the orders of 28 October 1993 and 1 October 1994, construed in the context of the relevant provisions of the County Courts Act 1984 and the County Court Rules 1981.

12.	Section 71 of the County Courts Act 1984 provides a convenient starting point. Subsection (1) is in these terms: 
(1)	Where a judgment is given or an order is made by a county court under which a sum of money of any amount is payable, whether by way of satisfaction of the claim or counterclaim in the proceedings or by way of costs or otherwise, the court may, as it thinks fit, order the money to be paid either
(a)	in one sum, whether forthwith or within such period as the court may fix; or
(b)	by such instalments payable at such times as the court may fix.

An order for payment by instalments imposes a stay on the issue of execution – see section 86 of the Act, to which we are about to refer – but it does not, of itself, have the effect of suspending or staying the judgment or order. That that is so appears from section 71(2): 
(2)	If at any time it appears to the satisfaction of the court that any party to any proceedings is unable from any cause to pay any sum recovered against him (whether by way of satisfaction of the claim or counterclaim in the proceedings or by way of costs or otherwise) or any instalment of such a sum, the court may, in its discretion, suspend or stay any judgment or order given or made in the proceedings for such time and on such terms as the court thinks fit, and so from time to time until it appears that the cause of inability has ceased.

Section 71(2) would be otiose if an instalment order under section 71(1) were, itself, to have the effect of imposing a stay of the judgment or order. The imposition of a stay under section 71(2) requires a separate exercise of discretion; distinct from any decision to make an instalment payments order under section 71(1) of the Act.

13.	     The effect of a suspension or stay of the judgment or order differs from a stay on the issue of execution.  A stay on the issue of execution prevents the judgment creditor from putting into operation the process of the court for the enforcement of the judgment debt; but it does not  prevent him exercising any other right or remedy he may have in relation to the judgment debt - see Clifton Securities Ltd v Huntley [1948] 2 All ER 283 at 284e-f - a case of peaceable re-entry. In particular, a stay on the issue of execution (or a stay of execution after a warrant has been issued) is not a bar to the presentation of a bankruptcy petition and the making of a bankruptcy order; provided, of course, that a statutory demand in the appropriate form has been served. Rule 6.25(2) of the Insolvency Rules 1986 is in these terms, so far as material:
6.25(2)	If the petition is brought in respect of a judgment debt . . . the court may stay or dismiss the petition on the ground that . . . that execution of the judgment has been stayed.

It is to be noted that the power to stay or dismiss the petition where execution on the judgment has been stayed is permissive, not mandatory. A judgment may be immediately payable notwithstanding that execution for its enforcement through the process of the court has been stayed. Further, a bankruptcy petition may be presented notwithstanding that the judgment debt is not immediately payable – see sections 267(2)(c) and 268(2) of the Insolvency Act 1986

14.	An instalment payments order has the effect of imposing a stay on the enforcement of payment by the issue of execution. Section 86 provides:
(1)	Where the court has made an order for payment of any sum of money by instalments, execution on the order shall not be issued until after default in payment of some instalment according to the order.

(2)	Rules of court may prescribe the cases in which execution is to issue if there is any such default and limit the amounts for which and the times at which execution may issue.

(3)	Except so far as may be otherwise provided by rules of court made for those purposes, execution or successive executions may issue if there is any such default for the whole of the said sum of money and costs then remaining unpaid or for such part as the court may order either at the time of the original order or at any subsequent time; but except so far as may be otherwise provided by such rules, no execution shall issue unless at the time when it issues the whole or some part of an instalment which has already become due remains unpaid.

  15.	The relevant rules of court, at the material time, were contained in Order 26 of the County Court Rules 1981. Order 26 rule 1(2) and (3) were in these terms, so far as material:
(1)	Where the court has made an order for payment of a sum of money by instalments and default has been made in payment of such an instalment, a warrant of execution may be issued for the whole of the said sum of money and costs then remaining unpaid . . . 
(3)	In any case to which paragraph (2) applies no warrant shall be issued unless at the time when it is issued-
(a)	the whole or part of an instalment which has already become due remains unpaid, . . . 

It is pertinent to note that, on default in payment of a single instalment, the judgment creditor could enforce payment, by the issue of execution, of the whole of the balance of the judgment debt.

16.	Section 88 of the Act contained  power to stay execution after a warrant had been issued. It was in these terms: 
If at any time it appears to the satisfaction of the court that any party to any proceedings is unable from any cause to pay any sum recovered against him (whether by way of satisfaction of the claim or counterclaim in the proceedings or by way of costs or otherwise), or any instalment of such a sum, the court may, in its discretion, stay any execution issued in the proceedings for such time and on such terms as the court thinks fit, and so from time to time until it appears that the cause of inability has ceased.

17.	Order 22 rule 2(1) of the County Court Rules 1981 required that, where judgment was given for payment of money (including costs) otherwise than by instalments, the money should be payable at the expiration of 14 days from the date of the judgment, unless some other day for payment were specified in the judgment. Order 22 rule 10 enabled either the judgment creditor or the debtor to apply for a variation in the date or rate of payment. In particular, the debtor could apply for an order that the money, if payable in one sum, be paid at a later date than that by which it was due or by instalments or, if the money were already payable by instalments, that it be paid by smaller instalments – see rule 10(5).

18.	The statutory scheme embodied in the County Courts Act 1984 and the former County Court Rules 1981, in relation to payment and the enforcement of judgments, may be summarised as follows:
(1)	When giving judgment for payment of money, the court could order payment in one sum or by instalments - section 71(1) of the Act – and could  from time to time vary any such order -section 71(1) & (2) and Order 22 rule 10.
(2)	The court could stay or suspend a judgment or order for such time and on such terms as it thought fit - section 71(2) of the Act and Order 25 rule 8 - if satisfied that the party was unable to pay the sum recovered against him or any instalment of that sum.
(3)	Where the court ordered payment in one sum and did not order a date for payment, then (in the absence of any order staying the judgment) the judgment debt was payable at the expiration of 14 days from the date of the judgment –  Order 22 rule 2(1); otherwise the debt was payable in accordance with the terms of the order.
(4)	An order for the payment of the judgment by instalments had the effect of staying the issue of execution on the judgment for so long as the instalment payments were maintained in accordance with the order, but not further or otherwise  - section 86(1) of the Act and Order 26 rule 1(2). 
(5)	The court could stay or suspend execution issued in the proceedings - section 88 of the Act and Order 25 rule 8 – again, if satisfied that the party was unable to pay the sum recovered against him or any instalment of that sum.

19.	In a case where there had been an order for payment by instalments and a default in the payment of an instalment, the statutory scheme embodied in the 1984 Act and the 1981 Rules made no express provision (for purposes other than execution) as to the time when the balance of a judgment debt was due and payable. Nor did it make express provision for the time when the balance of the judgment debt was payable in a case where the payment of instalments in accordance with an instalment payments order for the whole of the period specified in the order would be insufficient to discharge the debt.  But, in our view, it is not open to doubt, having regard to the other provisions in the statutory scheme, (i) that, if there were default in the payment of an instalment on the due date, the whole of the balance of the judgment debt was immediately payable (unless and until some further order was made), or (ii) that, if the instalments ordered were insufficient to satisfy the whole of the judgment debt by the expiry of the specified period, the balance of the debt was payable on the expiry of that period (again, unless and until some further order was made). Nor is it open to doubt that each payment to be made under an instalment payments order became due and payable immediately on the date specified in the order, and remained due and payable thereafter (unless and until a further order was made). The reason, as it seems to us, is that the judgment debt became payable on the date specified therein or at the expiration of 14 days after the date of the judgment  (by virtue of Order 22 rule 2(1)) unless and to the extent that there was an order which provided otherwise. An instalment payments order would be such an order; but it could not be relied upon by a debtor who did not comply with its terms – see section 86(1) of the Act and Order 26 rule 1(2). Nor, if made for a specified period, could it be relied upon once that period was spent. A debtor who was in default, or who was outside the specified period, was obliged to come back to the court for a further order if he wished to avoid the consequences of the balance of the debt having become immediately payable. The court had ample power to make an order to fit the circumstances.

The effect of the instalment payments orders made in the present case
20.	The judgment of  28 October 1993 was for a total sum, including costs, of £11,532.80. But the judgment included an order, plainly made under section 71(1) of the Act of 1984, that that sum be paid to the Council by way of £500 within seven days and then by instalments of £500 for every calendar month from 1 December 1993 until 1 February 1994, “when the balance of the debt and costs was to be paid”. There was nothing in the order of 28 October 1993 which had the effect of staying or suspending the judgment itself. It is clear that the court did not think fit to exercise its powers under section 71(2) of the Act.

21.	If the order of 28 October 1993 had been complied with, £500 would have been paid on or before 5 November 1993, £500 would have been paid on each of 1 December 1993 and 1 January 1994, and the balance (£10,032.80) would have been paid on 1 February 1994. In the events which happened the only payment made under that order was a payment of £500, paid on or about 23 November 1993. The effect was that, on any view, from 1 February 1994 (if not from 1 December 1993) the whole of the balance of £11,032.80 was immediately payable. 

22.	That remained the position until 12 September 1994 when a further payment of £250 was made by Mr Horne. Accordingly, at the time of the agreement which led to the order of 1 October 1994, the amount of £10,782.80 was immediately payable. The order of 1 October 1994 directed payment of instalments of £250 on the 20th day of each calendar month until 20th September 1995. If that order had been complied with, £250 would have been paid in each of the twelve months from October 1994 to September 1995 (both inclusive) - a total of £3,000. The balance (£8,782.80) would have become payable on 20 September 1995, subject to any further order which the court might make in the meantime. In fact, only one payment was made under that order, a payment of £250 on 20 November 1994. The effect was that, from 20 December 1994 (at the latest), Mr Horne was in default under the order of 1 October 1994 and (subject to the order of 1 October 1994 having some contrary effect) the whole of the balance of the judgment debt and costs (£10, 532.80) was immediately payable. 

23.	No further order was made, either on a review in September 1995 or at all, prior to the service of the statutory demand on 1 May  1998. Accordingly, subject to the order of 1 October 1994 having some contrary effect, the sum due and immediately payable on the date of service of the statutory demand  was the outstanding  balance  of the judgment debt        (£10, 082.80) and costs (£350) - amounting together to £10,532.80 - and  interest on the amount of the judgment debt and costs from time to time outstanding since 28 October 1993. As we have already pointed out, the amount demanded in the statutory demand is less than the amount payable under the judgment by the amount of the costs (£350) and interest on those costs.
      
24.	It is submitted by counsel for Mr Horne that the effect of the order of 1 October 1994 is to alter the position which would otherwise exist under the general law. It is said that the words “until September 1995, when the matter will be reviewed by this Court in the light of the circumstances then prevailing”, had the effect that, unless and until there had been a review by the court, the Council could take no steps either to recover payment of the balance of the debt, or the unpaid instalments. Not only was the Council unable to issue execution on either the judgment debt or the unpaid instalments (which themselves amounted to £2,750), but it was precluded from serving a statutory demand or presenting a bankruptcy petition. The basis for the latter contention can only be that neither the judgment debt, nor even the unpaid instalments, were immediately payable. 

25.	That submission (or at least part of it) found favour with the judge.  He said this, at page 22H-23F:
In the present case, however, what was raised was a serious dispute as to whether or not the debt was immediately payable. The learned District Judge resolved this by holding that immediately the instalments fell into arrears, the full balance became payable. I am not satisfied that that is correct as a matter of construction of the unsealed order of the 1st October.    . . . 

If every instalment order carried the implication that District Judge Rutherford drew, then there would have been no need for the application in re Mitchell (1910) 54 Sol Jo 252, or for the provision for part warrants in the County Court Rules , Order 26, Rule 1.

In the present case, the Order has its own mechanism for dealing with default, ie. a review on or after the 20th September 1995, and, in my judgment, there is no occasion for an implied term.

26.	The judge’s reasoning reflects, we think, the basis on which the arguments had been advanced before him; that is to say, that it was necessary to imply some term into the order of 1 October 1994 which would have the effect that the whole of the debt became due and payable in the event of default, or at the end of the instalment payment. Those arguments formed the basis of the appellant’s skeleton argument in this Court. In our view that is the wrong approach. The right question is not whether a term should be implied into the order. The right question to ask is as to the effect of the order in the context of the statutory scheme embodied in the County Courts Act 1984 and the County Court Rules 1981. The answer to that question is that there is nothing in the order which has the effect of displacing the consequences which would otherwise follow from the failure of a judgment debtor to maintain payments under an instalment payments order, or of postponing the date for payment of the debt (if instalment payments were maintained) beyond 20 September 1995. The obvious purpose of the words on which Mr Horne relies – “until September 1995, when the matter will be reviewed by this Court in the light of the circumstances then prevailing” – is (i) to define the length of the period during which instalment payments of £250 were to be made and (ii) to recognise that, at the end of that period, the balance of the judgment debt would remain unpaid so that there would be a need for a further order of the court if the consequences that would otherwise follow – namely, that that balance would have become immediately payable and could be the subject of execution – were to be avoided. The conclusion which the judge was persuaded to reach – that, if Mr Horne failed to make the instalment payments, there was nothing which the Council could do to enforce the whole or a major part of its debt until there had been a further order of the court on or after 20 September 1995 – seems to us untenable. 

27.	The judge found support in the decision of Mr Justice Phillimore in In re Mitchell, Ex parte Cohen (1910) 54 Sol Jo 252. That was a case in which an order for the payment of a judgment debt by instalments had been made on a judgment summons under section 5(2) of the Debtors Act 1869. An assignee of the judgment creditor sought to have the instalment order discharged “in order that he might pursue such other remedies as might be open to him for obtaining payment of the debt”.  The report is short; but it appears that the issue for decision was whether the court had power to rescind or vary its earlier order  for payment by instalments. There is nothing in the report which suggests that the court was asked to consider whether it was necessary for the creditor to obtain the discharge of the instalment payments order as a pre-requisite to the presentation of a bankruptcy petition. It seems to have been assumed that it was. That assumption may have been correct on the facts of that case and in the light of the legislation then in force; but, as the report does not disclose all the terms of the order which had been made under the Debtors Act 1869, it is impossible to tell. The decision is of no assistance in the present case. 
 
28.	For those reasons we are satisfied that the judge reached the wrong conclusion on the first issue. He ought to have held that the whole of the balance of the judgment debt had become immediately payable not later than 20 December 1994, and remained immediately payable at the date of service of the statutory demand in 1998. If he had doubts about that, he ought to have held, in any event: (i) that the instalments of £250 were payable on the dates prescribed by the order of 1 October 1994; (ii) that eleven of those instalments (£2,750) had not been paid; (iii) that those instalments remained immediately payable at the date of the service of the statutory demand; and (iv) that the existence of that debt, of itself, was sufficient reason not to set aside the statutory demand – see the observations of Sir Donald Nicholls, Vice-Chancellor, in In re a Debtor (Nos 49 and 50 of 1992) [1995] Ch 66, at page 70C-D.

29.	We should add that, if we had concluded that the debt immediately payable at the date of the service of the statutory demand was limited to the amount of the unpaid instalments (£2,750), we would have rejected Mr Horne’s alternative argument that the judge should, nevertheless, have adjourned the matter to give Mr Horne an opportunity to pay that sum. The evidence relied upon by Mr Horne before the District Judge and before His Honour Judge Weeks QC showed that Mr Horne was not in a position to pay that amount.  His position was that he could afford to pay no more than £10 per month.  In this Court his counsel informed us that she had instructions that Mr Horne had made arrangements with his other creditors, who did not favour bankruptcy. But there was no evidence of this; nor did she suggest that at, or since, the date of service of  the statutory demand Mr Horne has been in a position to pay the amount of the unpaid instalments, or that he could do so now.

The need for personal signature of the statutory demand.
30.	Rule 6.1(1) of the Insolvency Rules 1986 requires that:
A statutory demand under section 268 must be dated, and be signed either by the creditor himself or by a person stating himself to be authorised to make the demand on the creditor’s behalf.

The position in the present case was that the statutory demand was signed in the name of Mr Keith Pugsley by a person who had his authority in that respect. It contained a statement that (as was the case) Mr Pugsley was authorised to make the demand on behalf of the Council. But it was not signed by Mr Pugsley in his own hand. The judge held that to be a fatal defect.

31.	The judge started from the position that, as he said: “To me, ‘signed’ means that the person in question must have written his own name in his own hand”. That proposition was not challenged in the notice of appeal, nor in the appellant’s skeleton argument. But in the course of the hearing this Court drew the attention of the parties to its decision in London County Council v Agricultural Food Products Limited [1955] 2 QB 218;  and, in particular, to the observations of Lord Justice Romer at pages 223-4:
It is established, in my judgment, as a general proposition that at common law a person sufficiently “signs” a document if it is signed in his name and with his authority by somebody else; and in such case the agent’s signature is treated as being that of the principal.  That this is so is recognised by Blackburn J in Reg v Kent Justices; by Lord Esher in Reg v Cowper, and by the Divisional Court in France v Dutton.  The definition of “signature” in Stroud’s Judicial Dictionary  is also in conformity with the principle.

On the other hand if, by some rule of law, or by statute, a document has to be personally signed the duty of signing cannot be delegated to a third person . . . 

Lord Justice Parker agreed. He said this, at pages 225-6:
There is much to be said for the view expressed by Denning LJ in Goodman v J. Eban Ltd where he said, “In modern English usage, when a document is required to be ‘signed by’ someone, that means that he must write his name with his own hand upon it.”  This view, however, was not shared by the majority of the court, who held that a rubber stamp bearing a solicitor's name, put on with his authority, was a good signature on a bill of costs.  It is true that the question in that case was not “by whom, but how, the relevant document must be ‘signed,’” but it does show that the old common law rule survives.

That being so, the only question is whether the word “signed” in the context of the tenancy agreements requires a personal signature.  It has always been recognised that certainly in some statutes the context may demand a personal signature (cf Hyde v Johnson) and I conceive that even apart from statute the context is a matter to be taken into consideration.

32.	Lord Justice Denning was the third member of the court in the London County Council case. He referred to his earlier dissenting judgment in Goodman v J Eban [1954] 1 QB 550  to support the proposition that, in the ordinary way when a formal document is required to be “signed” by a person, that can only be done by that person writing his own name upon it, or affixing his own signature upon it with his own hand. But he acknowledged that there were cases in which a man is allowed to sign by the hand of another who writes his name on his behalf. He pointed out that signature in the hand of another is said to be a signature “per procuration”,  or more shortly “p.p.”.  He observed that, in such a case, failure to add the letters “p.p.” was bad practice; because, without those letters, those who did not know the signature of the person whose name was written on the document would be led to think that he had signed it himself. But he accepted that the position as it had stood at common law for many years should not be disturbed.

33.	There can be no doubt that the London County Council case is authority in this Court for the proposition that, although Mr Pugsley did not sign his name on the statutory demand in his own hand and the letters “p.p” do not appear against his name, he is to be treated as having signed that document unless there can be found in rule 6.1(1) of the Insolvency Rules 1986 a requirement that a statutory demand must be signed by the hand of the individual whose signature is relied upon. 

34.	The judge, who was not referred to the London County Council case, took the view that the underlying purpose of the requirement, in rule 6.1(1) was to protect the debtor “because it requires the creditor to focus on the statutory demand either by signing it himself or by authorising someone to make the demand on his behalf, who will then sign the statutory demand”.  It was submitted, on behalf of Mr Horne on this appeal, that the judge had correctly identified the purpose of the requirement; and that that purpose required that, in a case where the demand was to be signed not by the creditor but by a person authorised to make the demand on the creditor’s behalf, that person must sign the demand in his own hand.

35.     In our view the judge misunderstood the purpose of rule 6.1(1) of the Insolvency Rules 1986. The rule is not directed to the question whether the person who signs the statutory demand has, in fact, the authority of the creditor to do so. If he does not, then (absent subsequent ratification) the document will not be a demand “served by the petitioning creditor” within the meaning of section 268 of the Insolvency Act 1986. That is a matter of substance; it does not depend on the form of the demand itself. The purpose of the rule is to ensure that the debtor receives a demand which purports (on its face) to be signed by the creditor or by a person authorised by the creditor. That is why the rule requires that, where the demand is not signed by the creditor, it must be signed by “a person stating himself to be authorised to make the demand on the creditor’s behalf”. The words “stating himself to be” are indicative of the purpose of the rule. 
  
36.	That purpose is served whether or not the person whose signature appears on the statutory demand and who is stated, on the demand, to be authorised to make the demand on the creditor’s behalf, signs the demand in his own hand. It is, of course, necessary (i) that the person whose signature appears on the statutory demand is authorised by the creditor to make the demand (or, at the least, that his act in making the demand is ratified by the creditor) and (ii) that the person in whose hand that signature is written (or who places the signature on the demand by some other means) is authorised to do so by the person whose signature it purports to be. But those are requirements of the general law. They are not requirements introduced by rule 6.1(1) of the Insolvency Rules 1986. The rule is not directed to those requirements. There is no reason to suppose that the rule-making body intended to prescribe the internal arrangements by which the creditor organisation delegated authority to its officers and employees in relation to statutory demands.

37.	So understood, there is nothing in rule 6.1(1) or in the purpose underlying that rule, to displace the general proposition, explained and confirmed by this Court in the  London County Council case, that a person may sign by the hand of another whom he has authorised for that purpose.

38.	It follows that we are satisfied that the judge reached the wrong conclusion on the second issue also.

Conclusion
39.	For those reasons we hold that the District Judge was right to refuse to set aside the statutory demand dated 16 April 1998. On the basis that the statutory demand was properly made, there were no grounds upon which the District Judge could be criticised for making the bankruptcy order which he did. It follows that we set aside the order made by His Honour Judge Weeks QC on 22 June 1999; and restore the bankruptcy order made by the District Judge on 22 March 1999.

Order:  Appeal allowed,
Bankruptcy order restored respondent to pay Appellants costs.  Costs postponed.
(Order does not form part of the approved judgment)