Marcus Herring v Claire Sandbrook & Ors

Where enforcement under a writ affects partnership property protected by Partnership Act 1890, the statutory scheme in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 must be construed coherently with that protection. Taking control of, and selling, such goods may constitute a breach of the implied restrictions in paragraphs 4 and 11, engaging paragraph 66(1)(a).

A judgment debtor who is a partner may bring proceedings for personal loss and for the partnership’s loss, with the other partner joined as a respondent. The paragraph 60 procedure is directed to a true third-party owner where the debtor has no interest. Procedural objections, reasonable-belief defences, notice and alleged consent to sale generally require determination at trial rather than strike-out.

The claimant and the third respondent had carried on business in partnership. After an arbitration costs judgment in favour of the third respondent, a writ of control was issued and goods and machinery said to be partnership property were seized and sold. The claimant alleged that enforcement contravened section 23 of the Partnership Act 1890 and sought damages, compensation and declarations concerning enforcement fees.

The first and second respondents applied to strike out the claim or obtain reverse summary judgment. They argued that the claimant had used the wrong procedure, that only both partners could sue, that paragraph 60 of Schedule 12 and CPR Part 85 governed the claim, and that statutory immunities or the claimant’s conduct defeated it. The central issues were whether the claimant could sue for partnership and personal loss, whether paragraph 66 applied, and whether the fee challenge could proceed.

1. The strike-out and reverse summary judgment applications were dismissed. The court made no final determination of liability or of the respondents’ statutory defences.
2. Section 23 of the Partnership Act 1890 protects partnership property from enforcement by writ against a partner’s separate judgment debt. Schedule 12 contemplates goods protected by another enactment. Paragraphs 4 and 11 therefore contain an implied prohibition against taking control of, and selling, such goods. Breach of that prohibition is a breach within paragraph 66(1)(a). The writ was not “defective” for the purposes of paragraph 66(1)(b): the operative analysis was breach of the Schedule, not defect in the writ.
3. A partner may bring a claim concerning a joint partnership right in accordance with CPR 19.3, provided the other partner is joined as a respondent. Practice Direction 7A paragraph 7.3 is procedural and does not cut down that substantive entitlement. The principle in HLB Kidsons (A Firm) v Lloyds Underwriters was applicable, although the relevant reasoning in that case was technically obiter.
4. Paragraph 66(3) permits the judgment debtor to bring proceedings. The claimant could therefore pursue both his own loss, including diminution in the value of his partnership rights, and the partnership’s loss. Paragraph 60 concerns a true third-party owner asserting that the debtor has no interest in the goods. It did not govern the claimant’s case, since he retained a beneficial partnership interest and the complaint was that protected goods had been unlawfully seized and sold.
5. The alleged reasonable-belief defence under paragraph 66(8), the protections in paragraphs 63 and 64, alleged notice, and alleged assent or estoppel arising from cooperation with the sale involved disputed facts and law. The claimant had real prospects of overcoming those matters, so they could not properly be determined summarily.
6. The fee challenge could proceed under CPR 84.16 and regulation 16 of the Taking Control of Goods (Fees) Regulations 2014, including a dispute asserting that the recoverable amount was nil. The existing application could be amended rather than requiring a separate notice.