The issue of a first writ of control takes priority over the second writ of control that has been issued.
Summary
The Court of Appeal held that the issue of the first writ of control took priority over the second writ of control that had been issued. Therefore, the money paid in respect of the second writ had to be applied to the first writ.
Background
Handa (H) had fallen into debt and two of H's creditors obtained judgments that were enforced through the High Court. H owed a sum of approximately £23,000 to 365 Business Finance Ltd (365) and approximately £8,500 to Alivini Ltd.
365 had instructed Burlington Credit Ltd for the recovery of their credit and the writ was received by enforcement agent Badger (B) on 12 June 2018. Alivini Ltd had instructed Court Enforcement Services (CES) and the writ had been issued on 16 July 2018.
B attended H’s premises and secured goods by way of a controlled goods agreement. H had agreed to make a payment of £10,000 within 30 days followed by instalments of £1,000 until the debt was cleared. The first payment was due on 22nd August 2018.
Subsequently, the day before payment was due, H was visited by enforcement agent Wild (W) of CES, who demanded repayment in full. H contacted B, who advised W that B's writ took priority. W ignored this and took full repayment of £12,050 from H.
Burlington successfully applied for an order to have the money paid to them, as the writ executed by B held priority pursuant to CPR 83.4.
CES applied to set aside the order on several grounds but their main argument was that because they are High Court Enforcement Officers (HCEOs) and not enforcement agents (as defined in section 63 of Tribunals, Courts and Enforcement Act 2007), Schedule 12 of the 2007 Act did not apply to them and therefore, neither did the CPR.
The High Court held that although HCEOs may face statutory limitations to act as an enforcement agent by virtue of section 63 of the 2007 Act, this is unrelated to the fact that paragraph 4(2) of Schedule 12 binds all the debtor’s property from the time the writ is received by the person who is under a duty to endorse it. In other words, the court interpreted this to mean that where two or more writs of control are issued, they must be dealt with in chronological order.
Therefore, as the money was bound from the date B received the writ, the £12,050 should be paid to Burlington as per the original order.
CES appealed to the Court of Appeal contending that:
‘binding’ property only protects the goods so they cannot be sold and that this paragraph does not say whether there should be any priority between writs. In turn, CES argued that the judge was wrong in concluding that there is a rule creating priority between writs of control
even if there is priority for earlier writs, the rule only applies to proceeds from the exercise of an enforcement power, and the money paid by H should not be viewed as ‘proceeds
The court's decision
The Court of Appeal dismissed CES’ appeal and agreed with the High Court’s reasoning. The court considered previous case law and legislation and held that an earlier writ of control issued that had not been discharged took priority over later writs of control.
The court also rejected CES’ argument that payments were not to be considered as proceeds of enforcement.
Comments
Despite this case being in relation to High Court writs, this judgment can be applied to any situation where the enforcement agent is executing a writ of control.
There may be occasions where an officer will find another officer enforcing at the same address. In these circumstances it is the priority date that determines which officer is entitled to the goods.
Not only does it determine which writ/warrant takes priority and indicates who you should deal with first as an adviser, it would also help as a supporting argument to deter other enforcement agents pursuing recovery as their writ/warrant would be, in a sense, ineffective as the client’s goods have already been bound.