EWCA Civ 588
A number of questions were raised in this appeal about the operation of the current legislative framework governing execution against goods under writs of control (formerly writs of fieri facias) where two or more writs to recover different judgment debts in respect of the same debtor are directed to different enforcement officers (formerly sheriffs). Lord Leggatt described the main question as being what, if any, rule of priority applies in such circumstances:
“In particular, is the enforcement officer who receives the second (or subsequent) writ obliged to wait until the amount outstanding under each earlier writ of control has been paid before taking steps to enforce the later writ; and if the enforcement officer does not wait and enforces the later writ, what consequences follow? (para. 3)“
In this case two writs of control were issued in respect of the goods of a Mr Handa. Marston’s writ was received before the writ issued to Court Enforcement Services (CES). Marston’s enforcement agent attended at Mr Handa’s premises to enforce Marston’s writ, and entered into a controlled goods agreement (formerly ‘walking possession’), agreeing that £10,000 would be paid within a month’s time, with payments of £1,000 to be paid thereafter. However, on the day before the £10,000 payment was due to be made, a different enforcement agent, acting under a writ issued to CES, attended at Mr Handa’s premises and, despite being made aware of the controlled goods agreement and of Marston’s earlier writ, demanded payment of the amount outstanding under CES’s writ. In order to prevent removal of his goods, Mr Handa paid £12,050 to CES.
Marston contended that these funds were the fruits of execution, which should be allocated first to Marston’s writ, since it had priority over CES’s writ. When CES refused, Marston obtained an order from Master Eastman compelling CES to pay over the funds to Marston. CES applied to set aside that order, and the application was heard by Mr Justice Turner, who dismissed the application and held that Schedule 12 of the Tribunals Courts and Enforcement Act 2007 (TCE Act) preserves the long established principle that a debtor’s goods become bound by the writ from a particular point in time, and that although the same goods can be bound by multiple writs, it is only once the first writ is satisfied out of proceeds that the surplus can be applied to the second writ, and so on, in accordance with writ priority. Since Marston’s writ was first in time, the funds taken by CES should first be used to satisfy Marston’s writ.
The Court of Appeal upheld Mr Justice Turner’s decision, dismissing CES’s appeal. Lord Leggatt, with whom Lord Justices Lewison and Lindblom agreed, found that the concept, used in para. 4 of Schedule 12 of the TCE Act, of the debtor’s goods becoming ‘bound’ by the writ, could be traced back, through a number of enactments, to the Statute of Frauds 1677, and that courts had consistently held that the binding of the debtor’s goods by the writ created a rule of priority whereby writs must be satisfied in the order in which they are received by the officer. That rule continued to apply under the TCE Act.
The appeal raised a number of other questions about the interpretation of Schedule 12 of the TCE Act, including whether money paid, by cash and by credit card, constituted proceeds of enforcement (the court held that it did constitute proceeds, even if no goods had actually been taken into control). It also raised the question whether enforcement officers and enforcement agents are officers of the court and subject to the court’s jurisdiction over its officers, discussed in the recent case of Lehman Brothers Australia Ltd v MacNamara  EWCA Civ 321. The court held that enforcement officers and agents were indeed officers of the court, but having found that there was a statutory obligation on CES to pay over the funds to Marston, the court found it unnecessary to decide whether the court’s jurisdiction over its officers could have been invoked to achieve a similar result. The court did, however, find that by acting as they did, CES’s officer and agent had engaged in conduct deliberately calculated to disrupt the orderly process of enforcement of writs of control, and had thus misconducted themselves.
Stephen Ryan of Three Stone appeared for Marston, in the High Court and subsequently in the Court of Appeal.