Tribunals, Courts and Enforcement Bill [HL]

House of Commons

Session 2006 - 07
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Tribunals, Courts and Enforcement Bill [HL]

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
216

      (4)
The power to make regulations under this paragraph is subject to paragraph
49.
49    (1)
The creditor may sue in the name of the debtor, or in the name of any person
in whose name the debtor might have sued, for the recovery of any sum
secured or made payable by securities, when the time of payment arrives.
5
      (2)
Before any proceedings under sub-paragraph (1) are commenced or the
securities are otherwise disposed of, the enforcement agent must give notice
of the disposal to the debtor and any co-owner.
      (3)
Regulations must state—
(a)
the minimum period of notice;
10
(b)
the form of the notice;
(c)
what it must contain;
(d)
how it must be given.
      (4)
The enforcement agent may replace a notice with a new notice, subject to any
restriction in regulations.
15
      (5)
Any notice must be given within the permitted period.
      (6)
Unless extended the permitted period is 12 months beginning with the time
of payment.
      (7)
Any extension must be by agreement in writing between the creditor and
debtor before the end of the period.
20
      (8)
They may extend the period more than once.
Application of proceeds
50    (1)
Proceeds from the exercise of an enforcement power must be used to pay the
amount outstanding.
      (2)
Proceeds are any of these—
25
(a)
proceeds of sale or disposal of controlled goods;
(b)
money taken in exercise of the power, if paragraph 37(1) does not
apply to it.
      (3)
The amount outstanding is the sum of these—
(a)
the amount of the debt which remains unpaid (or an amount that the
30
creditor agrees to accept in full satisfaction of the debt);
(b)
any amounts recoverable out of proceeds in accordance with
regulations under paragraph 62 (costs).
      (4)
If the proceeds are less than the amount outstanding, which amounts in sub-
paragraph (3)(a) and (b) must be paid, and how much of any amount, is to
35
be determined in accordance with regulations.
      (5)
If the proceeds are more than the amount outstanding, the surplus must be
paid to the debtor.
      (6)
If there is a co-owner of any of the goods, the enforcement agent must—
(a)
first pay the co-owner a share of the proceeds of those goods
40
proportionate to his interest;
(b)
then deal with the rest of the proceeds under sub-paragraphs (1) to
(5).

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
217

      (7)
Regulations may make provision for resolving disputes about what share is
due under sub-paragraph (6)(a).
Passing of title
51    (1)
A purchaser of controlled goods acquires good title, with two exceptions.
      (2)
The exceptions apply only if the goods are not the debtor’s at the time of sale.
5
      (3)
The first exception is where the purchaser, the creditor, the enforcement
agent or a related party has notice that the goods are not the debtor’s.
      (4)
The second exception is where a lawful claimant has already made an
application to the court claiming an interest in the goods.
      (5)
A lawful claimant in relation to goods is a person who has an interest in
10
them at the time of sale, other than an interest that was assigned or
transferred to him while the property in the goods was bound for the
purposes of the enforcement power.
      (6)
A related party is any person who acts in exercise of an enforcement power,
other than the creditor or enforcement agent.
15
      (7)
“The court” has the same meaning as in paragraph 60.
Abandonment of goods other than securities
52
Paragraphs 53 and 54 apply to controlled goods other than—
(a)
securities;
(b)
money to which paragraph 37(1) does not apply.
20
53    (1)
Controlled goods are abandoned if the enforcement agent does not give the
debtor or any co-owner notice under paragraph 40 (notice of sale) within the
permitted period.
      (2)
Controlled goods are abandoned if they are unsold after a sale of which
notice has been given in accordance with that paragraph.
25
      (3)
Regulations may prescribe other circumstances in which controlled goods
are abandoned.
54    (1)
If controlled goods are abandoned then, in relation to the enforcement
power concerned, the following apply—
(a)
the enforcement power ceases to be exercisable;
30
(b)
as soon as reasonably practicable the enforcement agent must make
the goods available for collection by the debtor, if he removed them
from where he found them.
      (2)
Regulations may make further provision about arrangements under sub-
paragraph (1)(b), including in particular provision about the disposal of
35
goods uncollected after a prescribed period.
      (3)
Where the enforcement power was under a writ or warrant, sub-paragraph
(1) does not affect any power to issue another writ or warrant.
Abandonment of securities
55
Paragraphs 56 and 57 apply to securities as controlled goods.
40

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
218

56    (1)
Securities are abandoned if the enforcement agent does not give the debtor
or any co-owner notice under paragraph 49 (notice of disposal) within the
permitted period.
      (2)
Securities are abandoned if they are not disposed of in accordance with a
notice of disposal under that paragraph.
5
      (3)
Regulations may prescribe other circumstances in which securities are
abandoned.
57    (1)
If securities are abandoned then, in relation to the enforcement power
concerned, the following apply—
(a)
the enforcement power ceases to be exercisable;
10
(b)
as soon as reasonably practicable the enforcement agent must make
the securities available for collection by the debtor, if he removed
them from where he found them.
      (2)
Where the enforcement power was under a writ or warrant, sub-paragraph
(1) does not affect any power to issue another writ or warrant.
15
Payment of amount outstanding
58    (1)
This paragraph applies where the debtor pays the amount outstanding in
full—
(a)
after the enforcement agent has taken control of goods, and
(b)
before they are sold or abandoned.
20
      (2)
If the enforcement agent has removed the goods he must as soon as
reasonably practicable make them available for collection by the debtor.
      (3)
No further step may be taken under the enforcement power concerned.
      (4)
For the purposes of this paragraph the amount outstanding is reduced by
the value of any controlled goods consisting of money required to be used
25
to pay that amount, and sub-paragraph (2) does not apply to that money.
59    (1)
This paragraph applies if a further step is taken despite paragraph 58(3).
      (2)
The enforcement agent is not liable unless he had notice, when the step was
taken, that the amount outstanding had been paid in full.
      (3)
Sub-paragraph (2) applies to a related party as to the enforcement agent.
30
      (4)
If the step taken is sale of any of the goods the purchaser acquires good title
unless, at the time of sale, he or the enforcement agent had notice that the
amount outstanding had been paid in full.
      (5)
A person has notice that the amount outstanding has been paid in full if he
would have found it out if he had made reasonable enquiries.
35
      (6)
Sub-paragraphs (2) to (4) do not affect any right of the debtor or a co-owner
to a remedy against any person other than the enforcement agent or a related
party.
      (7)
In this paragraph, “related party” has the meaning given by paragraph 65(4).

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
219

Third party claiming goods
60    (1)
This paragraph applies where a person makes an application to the court
claiming that goods taken control of are his and not the debtor’s.
      (2)
After receiving notice of the application the enforcement agent must not sell
the goods, or dispose of them (in the case of securities), unless directed by
5
the court under this paragraph.
      (3)
The court may direct the enforcement agent to sell or dispose of the goods if
the applicant fails to make, or to continue to make, the required payments
into court.
      (4)
The required payments are—
10
(a)
payment on making the application (subject to sub-paragraph (5)) of
an amount equal to the value of the goods, or to a proportion of it
directed by the court;
(b)
payment, at prescribed times (on making the application or later), of
any amounts prescribed in respect of the enforcement agent’s costs
15
of retaining the goods.
      (5)
If the applicant makes a payment under sub-paragraph (4)(a) but the
enforcement agent disputes the value of the goods, any underpayment is to
be—
(a)
determined by reference to an independent valuation carried out in
20
accordance with regulations, and
(b)
paid at the prescribed time.
      (6)
If sub-paragraph (3) does not apply the court may still direct the
enforcement agent to sell or dispose of the goods before the court determines
the applicant’s claim, if it considers it appropriate.
25
      (7)
If the court makes a direction under sub-paragraph (3) or (6)—
(a)
paragraphs 38 to 49, and regulations under them, apply subject to
any modification directed by the court;
(b)
the enforcement agent must pay the proceeds of sale or disposal into
court.
30
      (8)
In this paragraph “the court”, subject to rules of court, means—
(a)
the High Court, in relation to an enforcement power under a writ of
the High Court;
(b)
a county court, in relation to an enforcement power under a warrant
issued by a county court;
35
(c)
in any other case, the High Court or a county court.
Application to assignee or transferee
61    (1)
This Schedule applies as follows where an interest of the debtor’s in goods
is assigned or transferred while the property in the goods is bound for the
purposes of an enforcement power, and the enforcement agent—
40
(a)
knows that the assignee or transferee has an interest in the particular
goods, or
(b)
would know, if he made reasonable enquiries.
      (2)
These apply as if the assignee or transferee were a co-owner of the goods
with the debtor—
45

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
220

(a)
paragraph 34 (inventory);
(b)
paragraph 36 (valuation);
(c)
paragraphs 39 to 41 (sale);
(d)
paragraph 59(6) (remedies after payment of amount outstanding).
      (3)
If the interest of the assignee or transferee was acquired in good faith, for
5
valuable consideration and without notice, paragraph 50(6) applies as if “co-
owner” included the assignee or transferee.
      (4)
If the interest of the assignee or transferee was not acquired in good faith, for
valuable consideration and without notice, the enforcement agent must pay
any surplus under paragraph 50(5) to the assignee or transferee and to the
10
debtor (if he retains an interest).
      (5)
If the surplus is payable to two or more persons it must be paid in shares
proportionate to their interests.
      (6)
Paragraph 5(3) and (4) (“good faith” and “notice”) apply for the purposes of
this paragraph.
15
Costs
62    (1)
Regulations may make provision for the recovery by any person from the
debtor of amounts in respect of costs of enforcement-related services.
      (2)
The regulations may provide for recovery to be out of proceeds or otherwise.
      (3)
The amount recoverable under the regulations in any case is to be
20
determined by or under the regulations.
      (4)
The regulations may in particular provide for the amount, if disputed, to be
assessed in accordance with rules of court.
      (5)
“Enforcement-related services” means anything done under or in
connection with an enforcement power, or in connection with obtaining an
25
enforcement power, or any services used for the purposes of a provision of
this Schedule or regulations under it.
Limitation of liability for sale or payment of proceeds
63    (1)
Any liability of an enforcement agent or related party to a lawful claimant
for the sale of controlled goods is excluded except in two cases.
30
      (2)
The first exception is where at the time of the sale the enforcement agent had
notice that the goods were not the debtor’s, or not his alone.
      (3)
The second exception is where before sale the lawful claimant had made an
application to the court claiming an interest in the goods.
      (4)
A lawful claimant in relation to goods is a person who has an interest in
35
them at the time of sale, other than an interest that was assigned or
transferred to him while the property in the goods was bound for the
purposes of the enforcement power.
64    (1)
Any liability of an enforcement agent or related party to a lawful claimant
for paying over proceeds is excluded except in two cases.
40
      (2)
The first exception is where at the time of the payment he had notice that the
goods were not the debtor’s, or not his alone.

Tribunals, Courts and Enforcement Bill [HL]
Schedule 12 — Taking control of goods
Part 2 — The procedure
221

      (3)
The second exception is where before that time the lawful claimant had
made an application to the court claiming an interest in the goods.
      (4)
A lawful claimant in relation to goods is a person who has an interest in
them at the time of sale.
65    (1)
Paragraphs 63 and 64—
5
(a)
do not affect the liability of a person other than the enforcement
agent or a related party;
(b)
do not apply to the creditor if he is the enforcement agent.
      (2)
The following apply for the purposes of those paragraphs.
      (3)
The enforcement agent or a related party has notice of something if he would
10
have found it out if he had made reasonable enquiries.
      (4)
A related party is any person who acts in exercise of an enforcement power,
other than the creditor or enforcement agent.
      (5)
“The court” has the same meaning as in paragraph 60.
Remedies available to the debtor
15
66    (1)
This paragraph applies where an enforcement agent—
(a)
breaches a provision of this Schedule, or
(b)
acts under an enforcement power under a writ, warrant, liability
order or other instrument that is defective.
      (2)
The breach or defect does not make the enforcement agent, or a person he is
20
acting for, a trespasser.
      (3)
But the debtor may bring proceedings under this paragraph.
      (4)
Subject to rules of court, the proceedings may be brought—
(a)
in the High Court, in relation to an enforcement power under a writ
of the High Court;
25
(b)
in a county court, in relation to an enforcement power under a
warrant issued by a county court;
(c)
in any other case, in the High Court or a county court.
      (5)
In the proceedings the court may—
(a)
order goods to be returned to the debtor;
30
(b)
order the enforcement agent or a related party to pay damages in
respect of loss suffered by the debtor as a result of the breach or of
anything done under the defective instrument.
      (6)
A related party is either of the following (if different from the enforcement
agent)—
35
(a)
the person on whom the enforcement power is conferred,
(b)
the creditor.
      (7)
Sub-paragraph (5) is without prejudice to any other powers of the court.
      (8)
Sub-paragraph (5)(b) does not apply where the enforcement agent acted in
the reasonable belief—
40
(a)
that he was not breaching a provision of this Schedule, or
(b)
(as the case may be) that the instrument was not defective.

Tribunals, Courts and Enforcement Bill [HL]
Schedule 13 — Taking control of goods: amendments
222

      (9)
This paragraph is subject to paragraph 59 in the case of a breach of
paragraph 58(3).
Remedies available to the creditor
67
If a debtor wrongfully interferes with controlled goods and the creditor
suffers loss as a result, the creditor may bring a claim against the debtor in
5
respect of the loss.
Offences
68    (1)
A person is guilty of an offence if he intentionally obstructs a person
lawfully acting as an enforcement agent.
      (2)
A person is guilty of an offence if he intentionally interferes with controlled
10
goods without lawful excuse.
      (3)
A person guilty of an offence under this paragraph is liable on summary
conviction to—
(a)
imprisonment for a term not exceeding 51 weeks, or
(b)
a fine not exceeding level 4 on the standard scale, or
15
(c)
both.
      (4)
In relation to an offence committed before the commencement of section
281(5) of the Criminal Justice Act 2003 (c. 44), the reference in sub-paragraph
(2)(a) to 51 weeks is to be read as a reference to 6 months.
Relation to insolvency provisions
20
69
This Schedule is subject to sections 183, 184 and 346 of the Insolvency Act
1986 (c. 45).
Schedule 13
Section 57(3)

Taking control of goods: amendments
Inclosure Act 1773 (c. 81)
25
1
The Inclosure Act 1773 is amended as follows.
2     (1)
Section 4 (expenses how to be defrayed) is amended as follows.
      (2)
For “levied by distress and sale of the goods and chattels of” substitute
“recovered, by using the procedure in Schedule 12 to the Tribunals, Courts
and Enforcement Act 2007 (taking control of goods), from”.
30
      (3)
Omit the words from “rendering” to the end.
3     (1)
Section 16 (assessments to be levied for the improving of wastes where there
are stinted commons) is amended as follows.
      (2)
For “levied by distress and sale of the goods and chattels of” substitute
“recovered, by using the procedure in Schedule 12 to the Tribunals, Courts
35
and Enforcement Act 2007 (taking control of goods), from”.
      (3)
Omit the words from “rendering” to the end.