Schedule 12 of The Tribunals, Courts and Enforcement Act 2007 (TCE) clearly states that the debtor’s goods (apart from those that are exempt) are bound by the writ of control from the time when it is received by the person who is under a duty to enforce it.

However, that doesn’t prevent a small minority of debtors, generally those who have no intention of paying if they can possibly avoid it, from hiding or selling their assets to prevent the enforcement agent from taking control of them.

Notice of enforcement

The Taking Control of Goods Regulations 2013 introduced the requirement for a 7-day notice of enforcement to be sent to all debtors before the enforcement agent could attend to enforce the writ of control. This came into effect in April 2014.

Prior to this High Court Enforcement Officers (HCEOs) did not need to send a notice of enforcement.

Waiving the notice of enforcement

If there is good cause to believe that goods may be disposed of once the notice of enforcement is received, the HCEO may apply to court for permission to dispense with the need to serve notice.

Situations where this permission might be granted could include the seizure of an aircraft, which simply wouldn’t land if they received notice.

Another example would be a debtor who was resident overseas and likely to leave the country with goods, or perhaps whether the goods were high value but small in size, and therefore very easily transported, such as gemstones.

Sale of assets to another company

We regularly come up against situations where the debtor company, whether limited, partnership or sole trader, claims that the goods belong to someone else. It might be that they have been sold to another company or are on lease.

The enforcement agent will be very diligent in checking all the paperwork relating to any claimed sale or leasehold agreement and will not accept those claims at face value.

Sometimes the paperwork is all in order, in which case the agent’s hands will be tied, but often we find the transfer of title has not been done properly and the goods are still the property of the debtor, in which case they are available to be taken into control under the writ of control.

Controlled goods agreement

If, during the attendance, the enforcement agent takes control of the goods but leaves them in situ, he will obtain a signed controlled goods agreement from the debtor.

This makes it very clear to the debtor that he no longer has title to the goods until the matter is resolved and that he may not dispose of or sell the assets.

It also gives the enforcement agent the right to enter the property to inspect the goods or to remove them for sale at any point.

However, if the enforcement agent has concerns about the safety of the goods, he may decide that removal straight away is the best option to protect those goods and the interests of the creditor.

Caveat emptor

Buyers should beware when buying goods, as the debtor selling them does not have the right to do so, meaning that the goods, or their value, will have to be returned to the enforcement agent.

Criminal offence

Under the Criminal Justice Act 2003, 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 respect of the loss.

It is an offence to either intentionally obstructs a person lawfully acting as an enforcement agent or to intentionally interferes with controlled goods without lawful excuse.

If found guilty, they are liable on summary conviction to:

  • Imprisonment for a term not exceeding 51 weeks, or
  • A fine not exceeding level 4 on the standard scale, or
  • Both

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