An enforcement agent could make a valid controlled goods agreement with a debtor via video call without physically entering the premises where the goods were located.
Summary
The High Court held, an enforcement agent can validly enter into a controlled goods agreement with a debtor whether or not the enforcement agent has physically entered the premises on which the goods are located.
Background
Just Digital Marketplace (J) applied to the court for a declaration that:
subject to the consent of the creditor and the debtor, a High Court enforcement officer can carry out a 'virtual' visit (as opposed to a physical visit) at the debtor's property pursuant to a writ of control
a High Court enforcement officer is able to enter into a controlled goods agreement with the debtor during the 'virtual' visit
having entered into a controlled goods agreement with the debtor, the High Court enforcement officer takes control of the goods pursuant to the relevant legislation
The High Court Enforcement Officers Association (HCEOA) and the Civil Enforcement Association (CIVEA) argued that these proposals did not constitute a valid controlled goods agreement.
The court's decision
The application was granted.
Having considered Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) and the Taking Control of Goods Regulations 2013 (2013 Regs), the court agreed with J. If both the creditor and debtor consent, an enforcement agent can enter into a ‘non-entry’ controlled goods agreement with the debtor, within the meaning of paragraph 13 of Schedule 12 of TCEA 2007.
However, the court noted that there are inconsistencies between TCEA 2007 and the 2013 Regs. The court found that whilst the TCEA 2007 did not prohibit a valid controlled goods agreement being made virtually, the 2013 Regs refer to allowing for ‘re-entry’ to remove goods after a controlled goods agreement is breached, but only where peaceable entry has already been made. Therefore, if a debtor breaches a ‘non-entry’ controlled goods agreement, an enforcement agent cannot physically enter the premises to remove the goods listed in the controlled goods agreement.
The compliance fee of £75 applied as normal. There was no additional fee charged where a controlled goods agreement was entered into ‘virtually’, as the Taking Control of Goods (Fees) Regulations 2014 only allow further fees where there has been a physical visit.
Comments
This case has far-reaching implications for enforcement agents (not just HCEOs) in how visits might be conducted across England and Wales. Advisers should be aware that where legislation might prevent an enforcement agent from physically being able to enter a debtor’s premises (due to the pandemic for example), the court’s decision in the above case allows ‘non-entry’ controlled goods agreements. The mode of contact would be using video technology such as Zoom, Skype and Teams.
The court emphasised that the ruling was a matter of interpreting the legislation and was not recommending a specific approach to how controlled goods agreements are to be made. In turn, the court did not comment on how the Regulations should be amended to take into account virtual visits, breaches of valid ‘non-entry’ controlled goods agreements (such as re-entry), what fees are to be charged (if any). It added that this would be a matter for the Ministry of Justice to consider.