Court Enforcement Services Ltd v Burlington Credit Ltd

Priority between competing writs of control is determined by the time when each writ is received by the person under a duty to endorse it. From that time, the debtor’s goods are bound by the writ. The priority applies to proceeds obtained through enforcement, including money paid by the debtor to avoid the taking control of goods. Such proceeds must be applied first to the amount outstanding under the earliest writ, with any surplus applied to later writs. Goods cease to be bound by a particular writ only when the amount outstanding under that writ has been paid.

365 Business Finance Ltd and Alvini (North) Ltd were judgment creditors of Mr Tanveer Handa. A writ obtained for 365 was received by Burlington Credit Ltd on 12 June 2018. A later writ obtained for Alvini was enforced by Court Enforcement Services Ltd, which obtained a payment of £12,050 from Mr Handa when attending his premises.

Master Eastman ordered that the payment be transferred to Burlington on the basis that the earlier writ had priority. Court Enforcement Services applied to set aside that order. The central issue was whether priority depended on the first receipt of a writ or on which enforcement agent first obtained payment.

1. The application to set aside Master Eastman’s order was dismissed. The writ received by Burlington on 12 June 2018 had priority over the later writ enforced by Court Enforcement Services.

2. Under section 62 and paragraph 4 of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007, goods become bound by a High Court writ from the time when it is received by the person under a duty to endorse it. The statutory binding effect applies notwithstanding that a High Court Enforcement Officer is not, solely by virtue of that office, an enforcement agent under section 63.

3. CPR 83.4 confirms that priority is determined by the time when the writ is originally received by the person under a duty to endorse it. The earlier authorities on writs of fieri facias remain applicable where consistent with the modern statutory regime. Hutchinson v Johnston, Jones v Atherton and Dennis v Whetham establish that delivery or lodging of the earlier writ gives priority, even where seizure or enforcement under a later writ occurs first. Bankers Trust Co v Galadari (No.2) provides further support.

4. Paragraph 50 of Schedule 12 treats as proceeds both sale proceeds and money taken in exercise of the enforcement power. A payment obtained from the debtor to prevent the enforcement agent taking control of goods therefore constitutes enforcement proceeds. The fact that payment is made by bank transfer rather than in cash does not alter that conclusion.

5. Paragraph 6 of Schedule 12 operates separately in relation to each writ. Goods bound by the earlier writ remain bound until the amount outstanding under that writ is paid. Payment made under a later writ does not release the goods from the earlier priority.

6. The practical difficulties and fee arguments raised by Court Enforcement Services did not justify departing from the clear statutory wording and established principle. The payment was obtained in the exercise of the later enforcement power, not voluntarily appropriated by the debtor to a particular debt.

Master Eastman made an order requiring sums paid under the later writ to be paid to Burlington Credit Ltd. Court Enforcement Services applied to set aside that order. The High Court dismissed the application and upheld the priority of the earlier writ.