Rejected crediting of a secured claim: Lodge the highest-bid balance within fourteen days

Section 235(1) EO applies when an objection to crediting a mortgage-secured claim against the highest bid succeeds. The relevant decision may be the distribution order, an appeal decision or a judgment on the objection. The lodging order follows once that decision is final.

The rule concerns the amount that no longer remains covered by crediting because of the successful objection. The buyer therefore faces an additional payment obligation to the enforcement court. The decision on the claim and the later lodging order are two consecutive procedural steps.

This situation is distinct from the ordinary payment of the highest bid after the award. The article on payment deadlines and default consequences after the award addresses the buyer’s general payment status. Section 235 EO presupposes a final correction of the crediting arrangement.

The lodging order covers the balance corresponding to the non-creditable part of the mortgage-secured claim, including ancillary charges. The calculation must therefore identify the amount originally credited and the part that may no longer be credited after the successful objection.

Section 235(1) EO also includes statutory interest from the day of the auction award. Interest therefore does not start only when the lodging order is served. The order and the underlying decision should show how balance, ancillary charges and interest are combined.

A private schedule can prepare these figures. The court order remains decisive for the payment into court. If the figures differ, the award order, distribution order, appeal decision and calculation sheet should be reviewed together.

Under section 235(1) EO, the buyer must lodge the balance specified in the order, together with ancillary charges and statutory interest, within the next fourteen days. The order is issued immediately after the relevant decision becomes final.

For practical review, finality, the order, service and the end of the period must be recorded separately. The statutory interest calculation starts on the day of the award. The period for lodging follows the court order and the statutory requirement of fourteen days.

Financing, an announced transfer or a partial payment does not replace full lodging. The decisive question is whether the amount required by the court arrived at the court within the relevant period and can be proved.

If the lodging order is not fulfilled within the period, section 235(2) EO allows enforcement against the buyer’s assets to recover the remaining highest bid and interest. An application is required. The application is made to the enforcement court.

Every person summoned to the distribution hearing may apply. The provision therefore does not limit the application to the original enforcing creditor. The summons, procedural position, lodging order and expiry of the period should be reviewed together.

Section 235(3) EO refers the handling of the amount paid as the balance to section 233(2) EO. That later treatment belongs in the distribution file and must be kept separate from the question whether the buyer lodged the balance in time.

The distribution order, objection, decision on the objection or appeal and proof of finality should be complete. They must show which crediting arrangement has fallen away.

Add the court lodging order, proof of service, calculation of the non-creditable claim amount with ancillary charges, interest calculation from the award and payment receipt. If a partial payment is asserted, the file must identify the amount that actually arrived at the court.

The article on conditional secured claims in highest-bid distribution helps with the substantive classification of secured claims. The payment under section 235 EO remains a separate issue and follows the final objection to crediting.