McLeod v Butterwick (Khazanchi v Faircharm Investments Ltd)

A bailiff who has entered peaceably and impounded goods cannot ordinarily force a re-entry merely because premises are locked and unattended. Force is justified where the bailiff was forcibly expelled or deliberately excluded, including where the occupier knew of the intended visit and deliberately barred entry. A walking possession agreement permitting re-entry at any time concerns timing, not method, and does not authorise unqualified forcible entry without clear words. The same rule applies to a sheriff re-entering a dwelling-house under a writ of fieri facias; statutory seizure powers do not imply a power of forcible entry. Wrongful re-entry does not invalidate a lawful seizure or sale. Under section 19 of the Distress for Rent Act 1737, recovery is confined to special damage caused by the irregularity.

These conjoined appeals concerned the common question whether a bailiff distraining for rent or a sheriff executing a writ of fieri facias could force re-entry to remove goods after an initial peaceable entry and seizure.

In Khazanchi, tenants operating a recording studio claimed damages after a bailiff forced entry into locked, unattended commercial premises. The Lambeth County Court dismissed the claim. In McLeod, a sheriff had entered the appellant’s home with her consent, later forced entry while she was absent, and removed goods. His Honour Judge Cooke refused an interlocutory injunction in the decision reported at [1996] 1 WLR 995. The central issue was whether locked premises alone constituted deliberate exclusion.

Lord Justice Morritt delivered the judgment of the court. Lord Justices Waller and Stuart-Smith agreed. Both appeals were dismissed.

1. Common-law rule. After a peaceable entry and seizure for distress, the goods are in the custody of the law. A bailiff may force re-entry where he has been forcibly expelled or deliberately excluded. Deliberate exclusion is fact-sensitive and includes knowingly locking the premises to prevent an announced visit. It does not include an occupier who, without knowledge of a particular intended visit, locks the premises in the ordinary way and goes about normal affairs.
2. Walking possession. The prescribed agreement’s provision allowing re-entry at any time concerns the timing of re-entry, not the method. It does not confer an unrestricted power to break in. A power of that breadth requires clear words, particularly where statutory authority is relied upon.
3. Sheriff’s execution. The same restriction applies to forcible re-entry into a dwelling-house by a sheriff. Section 138 of the Supreme Court Act 1981 authorises seizure but contains no express or implied power of forcible entry. The position concerning non-domestic premises was left materially different.
4. Khazanchi. The bailiff’s re-entry was unjustified because the premises were merely locked and unattended and the defendants had not proved deliberate exclusion. The bailiff had to plead and prove a legal justification. Nevertheless, section 19 of the Distress for Rent Act 1737 applied to the post-seizure irregularity. It prevented the bailiff becoming a trespasser ab initio and limited recovery to special damage caused by the wrongful re-entry. The tenants established no recoverable loss: the auction evidence was properly accepted and the net proceeds were below the rent debt. Contractual and quiet-enjoyment claims could not circumvent section 19, and nominal damages were unavailable.
5. McLeod. The sheriff’s re-entry was unlawful and a trespass, but the lawful seizure and right of sale continued. The sheriff had not abandoned possession, since the interpleader proceedings explained the interval between visits. No injunction was justified before trial. The goods could be sold, although damages or a declaration might be considered at trial.
6. Orders. Both appeals were dismissed. There was no order as to costs in Khazanchi. In McLeod, there was no order for costs, subject to legal-aid taxation.

• Court of Appeal (Civil Division): Both appeals dismissed. The court held that the lower courts had erred on the legal principle governing forcible re-entry, but no order was varied.
• McLeod lower decision: His Honour Judge Cooke, sitting as a High Court Judge, refused an interlocutory injunction and held that the sheriff could force entry and sell the goods. The decision is reported at [1996] 1 WLR 995.
• Khazanchi lower decision: His Honour Judge Cox in the Lambeth County Court dismissed the tenants’ claim and held that the bailiff could force entry.