365 Business Finance Ltd v Bellagio Hospitality WB Ltd & Anor

A writ of control has priority over later writs according to the date and time when each writ is received for endorsement. This priority applies whether the writs are directed to the same or different enforcement officers, and extends to goods subsequently acquired by the debtor.

A later writ may be enforced without interfering with goods already controlled under an earlier writ. Any resulting proceeds must, however, discharge the amounts outstanding under all binding writs in chronological order. Proceeds include cash and bank money obtained by threatening enforcement.

Receipt of a prior writ alone gives no immediate possessory right sufficient for conversion. Enforcement agents act as officers of the court and must not use a later writ in a manner that improperly disrupts proportionate enforcement under an earlier writ.

Two creditors held High Court writs of control against the same debtor. Marston Legal Services Limited received its writ first and entered into a controlled goods agreement with the debtor. Court Enforcement Services Limited later received another writ. Despite notice of Marston’s writ and agreement, its agent obtained £12,050 from the debtor by threatening the removal of goods.

Master Eastman ordered Court Enforcement Services to pay that sum to Marston. Turner J dismissed an application to set aside the order in [2019] EWHC 1920 (QB).

The appeal concerned whether writs directed to different enforcement officers have chronological priority; whether the later writ could lawfully be enforced; whether cash and a credit-card payment were proceeds of enforcement; and what duties and remedies followed.

1. Appeal dismissed. Paragraph 4(2) of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 preserves a chronological rule of priority. Where several writs of control bind the debtor’s goods, their priority depends solely on when each writ was received for endorsement. The identity of the enforcement officer is irrelevant. The rule applies equally to goods acquired after later writs were received.

2. The common law rules governing the exercise of enforcement powers were replaced by the statutory scheme. Earlier authorities nevertheless remained relevant because Parliament had re-enacted language which had received an authoritative and settled interpretation. The statement that a writ binds property in goods means that the officer has power to take the goods in execution; it does not transfer title or create a proprietary interest.

3. Schedule 12 does not prohibit an agent acting under a later writ from taking control of goods merely because an earlier writ exists. The agent must not interfere with goods already controlled under the earlier writ. An officer who has taken control has a superior possessory right and may sue in conversion if another person removes those goods. Receipt of a writ without taking control, however, gives no immediate right to possession and cannot alone support conversion.

4. Under paragraph 50(1), proceeds of enforcement must discharge the amounts outstanding under every writ binding the represented goods, in chronological order. An enforcement officer is a public functionary acting under the court’s authority, not merely the judgment creditor’s agent. The £12,050 therefore had to be applied to the prior writ.

5. “Money taken in exercise of the power” includes physical and bank money obtained when an agent threatens to remove goods unless payment is made. Both the £10,050 cash payment and the £2,000 credit-card payment were proceeds. It was immaterial that payment avoided the actual removal and sale of goods.

6. Enforcement agents are officers of the court. Although enforcing the later writ did not infringe Marston’s possessory rights, deliberately obtaining funds with knowledge of the prior writ and controlled goods agreement fell below the objective standard expected of court officers. This supplied an additional basis for corrective relief. The order requiring payment of £12,050 to Marston remained in force.

1. Court of Appeal (Civil Division): In [2020] EWCA Civ 588, unanimously dismissed the appeal and upheld the order requiring Court Enforcement Services Limited to pay £12,050 to Marston.
2. High Court, Queen’s Bench Division: Turner J dismissed the application to set aside Master Eastman’s order: [2019] EWHC 1920 (QB).
3. High Court, Master: Master Eastman ordered Court Enforcement Services Limited to pay £12,050 to Marston because the Marston writ had chronological priority.