Enforcement and competing Writs of Control – Who gets priority?

Thu, 05 Sep 2019

In 365 Business Finance Ltd -v- Bellagio Hospitality WB ltd (1) Mr Tanveer Singh Handa (2) [2019] EWHC 1920 (QB) The Honourable Mr Justice Turner considered whether to set aside an earlier Order of Master Eastman on the issue of competing writs and priority.

Mr Handa owed the Claimant the sum of £23,000. A Writ of Control was obtained on the 11th June 2018 and received by Mr Badger a High Court Enforcement Officer of Burlington Credit Ltd on the 12th June 2018.

This writ will be referred to as the “B Writ”.

Unfortunately, Mr Handa also owed a sum of £8,500 to the First Defendant and Court Enforcement Services obtained a Writ of Control in respect of that debt on the 16th July 2018. This will be referred to as the “CES Writ”.

An enforcement officer for Burlington attended Mr Handa’s premises and seized goods pursuant to the B writ but agreed to defer further action under a Controlled Goods Agreement “CGA” under which the terms of which Mr Handa was required to make a number of instalments. The first instalment was due to be paid by Handa on the 22nd August 2018.

However, on the 21st August Mr Handa received a visit from an enforcement officer seeking to execute the CES writ and secured a payment in full in respect of the outstanding debt of £8,500.

Master Eastman ordered that the B writ had priority pursuant to CPR 83.4 and that the monies obtained by the enforcement officer under the CES writ needed to be paid over to Burlington pursuant to the B writ which had priority.

The Honourable Mr Justice Turner was not at all satisfied with the arguments advanced by the Applicant Court Enforcement Services Limited. He held that the provisions of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 paragraph 6 applied. This states as follows: -

 

“Time when property ceases to be bound

6(1) For the purposes of any enforcement power the property in goods of the debtor ceases to be bound in accordance with this paragraph.

(2)The property in any goods ceases to be bound—

(a)when the goods are sold;

(b)in the case of money used to pay any of the amount outstanding, when it is used.

(3)The property in all goods ceases to be bound when any of these happens—

(a)the amount outstanding is paid, out of the proceeds of sale or otherwise;

(b)the instrument under which the power is exercisable ceases to have effect;

(c)the power ceases to be exercisable for any other reason.”

 

He held that the B Writ bound the property of Mr Handa and that this only stopped upon payment of the amount outstanding under the writ. Otherwise, the priority principle and the effect of the goods being bound by a writ from a moment in time would be rendered completely ineffective.

Accordingly the first Creditor to obtain a writ of control has priority up until such a point that the writ is satisfied.

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