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Important decision on Taking Control of Goods

8 October, 2021

Hamilton v Secretary of State for Business, Energy and Industrial Strategy
[2021] EWHC 2647 (QB)
On 6 October 2021 the High Court handed down an important decision on the interpretation of Schedule 12 of the Tribunals, Courts and Enforcement Act 2007, read with the Taking Control of Goods Regulations 2013.

The basic facts of the case were these. The first respondent (the Secretary of State for Business, Energy and Industrial Strategy) obtained costs decrees against the appellant (Mr Hamilton) in directors’ disqualification proceedings in Scotland. Those decrees were registered in England and Wales. A High Court Enforcement Officer (the HCEO) was instructed to obtain and enforce writs of control. The asset concerned was a boat, MV Samara, moored in St Katherine Dock in London.

On 10 April 2019 two writs of control were issued. On 18 April 2019 notices of enforcement were given to Mr Hamilton. On 30 April 2019 the second respondent (Mr Lucas Jones, an Enforcement Agent) attended at the MV Samara, and entered into two controlled goods agreements (the CGAs) with Mr Hamilton. Under the relevant legislation a CGA (what used to be called a walking possession agreement) is a form of taking control of the goods.

A Mr Newett made an application under CPR, r 85.4 alleging that it was he, and not Mr Hamilton, who had the relevant interest the MV Samara, which (it was said) was standing as security for a loan. That application, made late, eventually came on for hearing before Master Cook on 22 May 2020. It was dismissed on its merits. In his order dismissing the application Master Cook expressly ordered the HCEO to sell the MV Samara “pursuant to paragraph 60 of Schedule 12” of the 2007 Act.

Mr Hamilton applied to set aside the order made by Master Cook, but his application was dismissed in June 2020 and marked as being totally without merit. It was against those two orders of Master Cook that Mr Hamilton appealed. Mr Hamilton’s grounds of appeal did not themselves find favour with the court hearing the appeal (Mr Justice Lane). The applications for permission to appeal were described as having “no arguable merit”: [134], and as “unarguable”: [135]. They do not take up much of the judgment (only [126]-[135]).

The main issue on the appeal turned out to be whether the MV Samara had been abandoned by the Enforcement Agent, and what the court could do about it if it had been. This issue arises in this way. By reason of paragraphs 40(6), 53 and 54 of Schedule 12, the Enforcement Agent must give a notice of sale within 12 months of taking control, and if he does not give such a notice, the goods are abandoned and must be returned to the judgment debtor. Astute readers will note that the hearing in front of Master Cook was more than 12 months after the CGAs had been entered into. No notices of sale had been given. Prima facie, the vessel had been abandoned on 30 April 2020.

That 12 month period can be extended, but only by written agreement between the Enforcement Agent and the judgment debtor. It seems likely that this ability to extend will be used in vanishingly few cases: it is almost never in the judgment debtor’s interest to agree. Importantly the court is not given a residual power to extend the 12-month period for giving notice of sale.

What the court is given is a brace of powers to order sale attendant upon third party applications such as that made by Mr Newett in this case, by paragraphs 60(3) and 60(6) of Schedule 12. But both are tightly constrained, and their interaction with paragraphs 40(5), 53 and 54 is not at all clear on the face of the legislation. Although Master Cook had made an order for sale “pursuant to paragraph 60” it was not at all clear which of those powers he still had available to him having already determined Mr Newett’s application.

The Enforcement Agent argued, by extensive submissions on the interpretation of the legislation and the court’s ability to read in powers which are not express, that there must be a power to order sale at the end of a third party application. Lane J disagreed, holding (in effect) that at the date of abandonment the enforcement was at an end so there was nothing to sell. His Lordship partially allowed the appeal, but only to remove Master Cook’s order for sale and replace it with a declaration that the vessel had been abandoned.

This decision shows, perhaps more than any other, that Schedule 12 is not the most wonderful piece of drafting to have come from the usually excellent pen of the Parliamentary Draftsman’s office. The effect of this decision is that canny judgment debtors and third parties can spin out third party ownership applications until the 12 month period is up and then reap the consequences of the abandonment.

A fuller analysis of the judgment will appear in the Three Stone Review.

Simon Hunter
shunter@threestone.law


Triannual Review: Issue 4, September 2021

28 September, 2021

Please find below a link to Issue 4 of the new Three Stone Triannual Review, where you will find articles on current issues, case reviews, and a practice update that we hope will be of interest and of use to you.

The topics covered in this edition include:

  • Setting the bar high –  Sebastian Kokelaar explores the Supreme Court’s recent decision on lawful act duress in the Pakistan International Airlines case
  • How (not) to avoid paying business rates –  Stephen Ryan takes us through three seasons of business rates mitigation schemes, via the Supreme Court
  • Case Reviews
  • Practice Update
  • Chambers News

Download pdf


Regulating the distributed ledger: the EU’s attempt

27 September, 2021

In this article ([2021] 10 JIBFL 648), Richard Nowinski considers some of the shortcomings of the EU’s attempt to regulate distributed ledgers.

KEY POINTS:

  • It is clear from the text of the EU proposal that only permissioned networks will be permitted within the remit of the regulation.
  • Under the proposal, both legal and computer codes will need to be considered by both the member state regulator and ESMA in the approval process – but do they have the skill and capacity to assess computer code?
  • The regulator may require an assessment of reliability of the IT and cyber arrangements by an independent auditor but there are no criteria against which these arrangements are to be assessed.

Richard Nowinski
rnowinski@threestone.law


Professor Subedi appointed Advisor to the IUCN

16 September, 2021


We are pleased to announce that a member of Three Stone Chambers Professor Surya P. Subedi QC, OBE, DCL has been appointed by the Bureau of the IUCN Council as Legal Procedural Adviser to the IUCN World Conservation Congress 2021.

The International Union for Conservation of Nature (IUCN), which is also known in short as the World Conservation Union, is a prestigious international organisation. Professor Subedi was appointed to advise them on legal and procedural matters during their World Congress which takes place every four years. This year the event took place in the French city of Marseille between 3 – 11 September 2021.

The Congress was inaugurated by French President Emmanuel Macron. A number of other heads of states or governments also addressed the Congress. Professor Subedi attended the opening ceremony, as well as the full proceedings of the Congress.

IUCN is a membership Union composed of both governments and civil society organisations. It harnesses the experience, resources and reach of its more than 1,400 member organisations and the input of more than 18,000 experts. This diversity and vast expertise makes IUCN the global authority on the status of the natural world and the measures needed to safeguard it.

Professor Surya P. Subedi QC, DCL, OBE
ssubedi@threestone.law


Two new pieces of insolvency legislation

13 September, 2021

UPDATE 30 September 2021:
An error has been spotted in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021. They have been replaced with effect from 28 September 2021 by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) (No. 2) Regulations 2021. The error was not in the substance of the replaced Schedule 10, which is identical in both sets of Regulations, and the commentary below is still applicable.

Two new pieces of insolvency legislation have been passed which will come into force over the next 3 weeks.

First, on 29 September 2021 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 come into force.  These amend Schedule 10 of the Corporate Insolvency and Governance Act 2020 by replacing the original schedule with a new one.  Those who deal with winding-up cases will know that Schedule 10 restricts the circumstances in which a creditor can petition for the winding up of a debtor company. Whilst it is unfortunate that the rules have been changed just as practitioners have got used to the old version, such is the nature of temporary, emergency provisions. The new Schedule 10 is considerably simpler than its predecessor.

In short, the new schedule states that a creditor cannot present a petition for the winding up of a company under section 122(1)(f) (“the company is unable to pay its debts”) unless 4 conditions are met.  Those conditions are:

  • The debt is (a) liquidated; (b) due for payment; and (c) not excluded;
  • The creditor has delivered a written notice to the company seeking proposals for payment of the debt;
  • The company has not, within 21 days of the notice, made a proposal for payment which is satisfactory to the creditor; and
  • The total petition debt is at least £10,000.

Debts excluded for the purposes of Ground A are those “in respect of rent, or any sum or other payment that a tenant is liable to pay, under— (a)  in England and Wales, a relevant business tenancy … and which is unpaid by reason of a financial effect of coronavirus.”  “Relevant business tenancy” is itself defined.

The definition of “excluded debt” contains the only remaining substantive reference in Schedule 10 to the coronavirus, and the requirement for a creditor to believe that “coronavirus has not had a financial effect on the company” before presenting a petition, found in the old Schedule 10, has been removed.

The provision is time limited and runs from 1 October 2021 to 31 March 2022.  Presumably a new practice direction will follow.

Second, from 1 October 2021 the Insolvency (England and Wales) (No.2) (Amendment) Rules 2021 makes extensive changes to the Insolvency Rules to incorporate the new moratorium procedure.  It begins by introducing Part 1A to the Insolvency Rules, containing the provisions applicable to the new moratoria.  The rest of the changes are consequential and other minor textual modifications to the remaining rules in the Insolvency Rules to include references to moratoria in the necessary places.

Simon Hunter
shunter@threestone.law


Professor Subedi publishes a new book ‘Unilateral Sanctions in International Law’

20 June, 2021

Three Stone Chambers are very proud that one of our barristers Professor Surya P. Subedi, QC, OBE, DCL has published a new book ‘Unilateral Sanctions in International Law’ (Hart Publishing, Oxford, 2021).

This is the first book that explores whether there are any rules in international law applicable to unilateral sanctions and if so, what they are.

The book examines both the lawfulness of unilateral sanctions and the limitations within which they should operate. In doing so, it includes an analysis of State practice, the provisions of various international legal instruments dealing with such sanctions and their impact on other areas of international law such as freedom of navigation, aviation and transit, and the principles of international trade, investment, regional economic integration, and the protection of human rights and the environment.

This study finds that unilateral sanctions by a state or a group of states against another state as opposed to ‘smart’ or targeted sanctions of limited scope would be unlawful, unless they meet the procedural and substantive requirements stipulated in international law. Importantly, the book identifies and consolidates these requirements scattered in different areas of international law, including the additional rules of customary international law that have emerged out of the recent practice of States and that increase the limitations on the use of unilateral sanctions.

Professor Surya P. Subedi QC, DCL, OBE
ssubedi@threestone.law


Invitation for Applications for Third Six Pupillage

9 June, 2021


Chambers are looking to recruit a Third Six Pupil from October 2021.The successful applicant will have successfully completed 1st and 2nd Six Pupillage in Chancery / Commercial Chambers.

Please write to:

Justin Brown
Senior Clerk
3 Stone Buildings
Lincoln’s Inn
London WC2A 3XL

email: Justin@threestone.law


The closing date is 31 July 2021.


Triannual Review: Issue 3

26 May, 2021

Please find below a link to Issue 3 of the new Three Stone Triannual Review, where you will find articles on current issues, case reviews, and a practice update that we hope will be of interest and of use to you.

The topics covered in this edition include:

  • “A Bribe or Not a Bribe? That is the Question” (or is it?!) Stuart Cutting explores the Court of Appeal’s decision in Wood v Commercial First Business Ltd.
  • The Long Road to Insolvency Daria Gleyze counsels weary travellers on their road through insolvency procedure.
  • Insolvency Issues in Open Source Software Michael Smith tells us why we should all think about open source software.
  • Case Reviews
  • Practice Update
  • Chambers News

Download pdf


Matthew Marsh joins Three Stone as a new Door Tenant

10 May, 2021


We are delighted to announce that Matthew Marsh joined Three Stone as a Door Tenant on 1 May 2021 to act as Mediator and Arbitrator.

Matthew was a Chancery Master for nine years and Chief Master for seven years from 2014 to 2021. He originally qualified as a solicitor and was a partner with Collyer Bristow LLP until 2012. He sat as a Recorder from 2002 to 2021. He is an accredited mediator. He is also a Fellow of the Chartered Institute of Arbitrators (1992) and holds a Diploma in International Commercial Arbitration. He has wide experience of arbitration, both domestic and international, as sole arbitrator and acting for parties.

Stephen Baister said: “A former solicitor in a respected London firm and, until recently, Chief Chancery Master of the High Court, Matthew Marsh (alongside whom I was privileged to work) brings a unique blend of skills to the Three Stone mediation and arbitration team. The breadth of his practice and judicial experience is complemented by a calm and reassuring personality. Litigants and their advisers will find him effective in a wide range of commercial and other disputes in both capacities in which his services are available.”

Justin Brown (Senior Clerk) said: “I am thrilled that Matthew is joining us. His role as Chief Master was a greatly distinguished one. He joins our experienced team of arbitrators and mediators and I am sure will have great success”.

Matthew Marsh
matthewmarsh@threestone.law

 


Professor Surya Subedi interviewed by “Counsel” as an inspiring legal personality

20 April, 2021

The article titled “Legal Personality – The International Human Rights Jurist: Surya Subedi QC” features in the April edition of “Counsel” – the monthly journal of the Bar of England and Wales.

Three Stone Chambers are very proud to see one of our barristers Professor Surya P. Subedi, QC, OBE, DCL interviewed by fellow barrister Admas Habteslasie, in an article highlighting his life and contribution to international law and human rights as a leading international jurist.

The article describes Professor Subedi’s career journey, highlights his many achievements and explains how he has combined his academic work with more practical work in the field of public international law and his contribution to top level policy formulation within and outside of the UN system of human rights.

It also highlights Professor Subedi’s publications, including his recently published book entitled “Human Rights in Eastern Civilisations”.

Professor Subedi said that he was honoured to feature in an article, written by a barrister, highlighting his contribution within a prestigious magazine of a professional national legal institution of England and Wales.

Read the article in full here.

Professor Surya P. Subedi QC, DCL, OBE
ssubedi@threestone.law


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Three Stone have taken immediate measures to maintain our impressive chancery commercial services and our clerking team will provide their usual high standard of service whilst ensuring the safety of our clients, staff and members during this dynamic period.