Midtown Acquisitions LP v Essar Global Fund Ltd & Ors

An enforcement agent may take control of goods under a writ of control only where the goods are on premises which the agent has power to enter under Schedule 12 to the Tribunals, Courts and Enforcement Act 2007, or on a highway. A writ does not itself authorise entry to premises for which no warrant exists. A warrant may nevertheless be reasonable where the asset has no present free equity, if taking control may facilitate recovery and the secured position may change, particularly where the asset is likely to leave the jurisdiction.

Midtown was enforcing a substantial judgment debt against Essar Global Fund Ltd. It sought to take control of a private aircraft legally owned by White Springs Holdings Ltd, alleging that the aircraft was held on trust for the judgment debtor.

An enforcement officer obtained a warrant specifying Lasham Airfield, but went instead to premises at London Stansted Airport and sought to take control of the aircraft. A second warrant specifying Stansted was obtained the following day. The defendants applied to set aside the writ and warrants, contending that the initial taking of control was unauthorised and that enforcement was futile because Credit Suisse held security exceeding the aircraft’s value.

1. The defendants’ application was allowed in part. The steps taken on 27 July 2017 to take control of the aircraft were invalid, because the enforcement officer obtained access to the relevant airside and private premises without a warrant authorising entry there. The warrant obtained for Lasham Airfield did not authorise entry at Stansted Airport.

2. Section 62(2) of the Tribunals, Courts and Enforcement Act 2007 makes the power conferred by a writ of control exercisable only through Schedule 12. Under paragraph 9 of that Schedule, goods may be taken into control only if they are on premises which the enforcement agent has power to enter under the Schedule, or on a highway.

3. Paragraph 14, which permits entry without a warrant where the debtor usually lives or carries on business at the premises, did not apply. The definition of premises in paragraph 3, including aircraft, did not remove the requirement that the debtor live or conduct business there. Paragraph 15 requires a warrant authorising entry to specified premises.

4. The court declined to adopt an unduly restrictive approach to paragraph 13, recognising that the prescribed methods must accommodate goods of different kinds. However, that flexibility could not cure the absence of lawful authority to enter the relevant premises.

5. The court rejected the argument that a warrant was necessarily unreasonable because the aircraft’s secured debt exceeded its value. Enforcement is directed to genuine recovery, not merely pressure on the judgment debtor. Nevertheless, taking control could facilitate recovery, the secured position might change, and the aircraft was likely to leave the jurisdiction. It was therefore reasonable to seek a warrant notwithstanding the absence of present free equity.

6. The remaining ownership, co-ownership and non-disclosure issues were left for later determination.