Ben Daniels & Betul Milliner on rare disputes concerning payment of debt by a third party
Disputes over payment of a debt by a third party are comparatively
rare. Creditors and debtors are normally united by a common interest to have an uncontested debt paid, regardless of the source of the funds.
However, in the recent case of Treasure & Son Ltd v Martin Dawes [2008] EWHC 2420 (TCC), [2007] All ER (D) 386 (Oct) such a dispute arose. Th e case revisits the law on third party payment of debts, and provides practical guidance on how to avoid similar disputes arising in the future.
The claimant, Treasure & Son (Treasure) had carried out extensive work on the defendant Martin Dawes’s home. Th e parties had subsequently fallen out and the dispute had been referred to an adjudicator who had found in favour of Treasure. As Mr Dawes did not pay the adjudicator’s award, Treasure issued enforcement proceedings and on 25 October 2007 the court ordered that Mr
Dawes should pay Treasure the judgment debt. By November 2007, the parties were in agreement that
