Brintons Ltd v Wyre Forest District Council [1977] QB 178

 

This case rules a bailiff only has a right of re-entry to a debtor's property if he has a valid levy. If the bailiff enters a property does not make a valid levy then he does not have a right to re-enter the property by breaking into it.

A discussion about the debt and costs took place between the debtor and the council representatives. Payment was received without any paperwork being prepared or other work done, but levy fees were charged. This was standard practice not before questioned but was found not to be lawful when Brintons sued to recover the charges.

Judgment of Donaldson J: "Sir Tatton Brinton, the chairman and managing director of Brintons Ltd, manufacturers of carpets (the plaintiffs), set out to protest against the increase in the rates demanded by the Wyre Forest District Council. With this in mind he withheld £83,000. The council took out a summons before the local justices and Sir Tatton made his protest. Whether it was effective as a protest, I know not, but the justices were bound to issue a distress warrant and did so.

The plaintiff's intention was to pay the rates the next day, but the council moved with a speed which is unusual in a local authority. No doubt they had it in mind that the non -payment of these rates was costing the general body of rate-payers £24 a day by way of interest.

That afternoon Mr Williams, the council's chief rating assistant, and Mr Dallow, a bailiff, went to the plaintiffs offices and met Sir Tatton. They were invited into the boardroom and the bailiff told Sir Tatton that they had come to levy distress for the outstanding rates and for costs. Sir Tatton said that a cheque for the rates had been prepared but it required a further signature. It was at this stage that the bailiff informed Sir Tatton that as he had come to levy distress under a warrant, the plaintiffs would have to pay not only the amount of the rates, but also the cost of levying distress. This amounted to some £1,255.28. The plaintiffs, having little alternative, drew a further cheque for this sum which they delivered under protest.

I am told that any bailiff would have acted in the same way and that the correctness of this course never seems to have been challenged. However, the plaintiffs take the view that the demand for £1,255.28 cannot possibly he justified. If they are right, this case is of considerable importance to all local authorities and the plaintiffs second protest has probably been more effective than their first.

The council does not seek to contend that it can retain the money if it was not entitled to demand it in the first place, nor does it contend that in the circumstances of this case the delivery of the plaintiffs cheque did not amount to a tender of the rates and of the costs demanded. The plaintiffs, for their part, do not seek to challenge the arithmetic involved in arriving at a figure of £1,255.28.

Mr. Shaw for the council puts his claim to be entitled to this sum in two ways. First, he submits that on the facts the bailiff levied a distress and thereupon became entitled to the appropriate fee under paragraph 3(1)(ii) of the Distress for Rates Order 1972. Second, he submits that if the bailiff did not get as far as levying a distress, the council is entitled to a like sum under section 105(2) of the General Rate Act 1967.

The claim to have levied a distress for rates In Mortimer v Cragg [1878] Brett U defined the stages in the execution of a writ of fieri facias and the sheriffs entitlement to poundage as follows:

"Where an execution issues the transaction may be divided into four parts

(1) The delivery of the writ to the sheriff

(2) Seizure

(3) The possible payment of money after seizure

(4) If no payment, sale

The first step does not entitle the sheriff to poundage and if he does not seize Nash v. Dickenson [1867] is an authority that he is not entitled to poundage. Although he seizes, nothing may be realised because the seizure may be wrongful. It may be withdrawn by direction of the law, and then the sheriff would receive no poundage. Then comes the case after seizure. The money may be paid by the execution debtor either directly or indirectly: directly by virtue of the seizure to the sheriff; indirectly where payment is made by means of a compromise which is the consequence of the seizure. In either of those cases the sheriff is entitled to poundage. "

It is not suggested that any different principle applies to the execution of a distress warrant for rates. The issue is thus whether the bailiff in fact seized any goods. In my judgment he did not. As counsel for plaintiffs has pointed out, the bailiff was not entitled to seize the whole of the goods present in the offices and factory. He had to select sufficient goods to cover the rates whilst ensuring that the distress was not excessive. This involved some process of selection before seizure and the bailiff never started on this process. Nor did he ever say that all or any of the goods were seized or do anything which amounted to taking possession.

In relation to the execution of a warrant of fieri facias the dividing lint between what is and what is not a seizure is shown by comparing Nash v Dickenson (1867) which seems to me to be indistinguishable from the present case and Bissicks v Bath Colliery (1877) which is distinguishable because the sheriffs officer threatened to leave a man in possession of the goods and both parties treated the action of the sheriff's officer as having amounted to a seizure.31 The claim to poundage on this basis therefore fails.

The claim under section 105(2) of the General Rate Act 1967

Section 105 is in the following terms. The side note reads: "Abatement of proceedings on payment of rate and costs. "

The section provides:

"(1) If after proceedings have been taken under this Part of this Act against a person to compel payment of any sum for rates, but not after he has been imprisoned in default of a sufficiency of distress, that person pays or tenders to the rating authority, or to some other person authorised to receive the rates, the sum sought to be recovered together with the amount of all costs and charges up to that time incurred in the proceedings, the rating authority or other person shall accept the amount so paid or tendered and no further proceedings shall be taken for the recovery thereof. (2) If after the issue of a warrant of distress under this Part of this Act for a rate the person against whom it is issued tenders the amount of the rate before any levy is made, he shall nonetheless be liable to pay the cost of the warrant and of any person for his attendance to make the levy."

Subsection (1) is concerned with the stage between the issue of a summons for a warrant of distress and the issue of that warrant. Payment or tender of the rates and the costs and charges of the authority to date operates as an immediate stay of all further proceedings. Subsection (2) is concerned with the stage between the issue of the distress warrant and the seizure of the goods. If the rate-payer tenders the amount of the rate before any seizure is made his remaining liability is to pay the cost of the warrant and the cost of any person, and I quote, for his attendance to make the levy. The question is what is this cost.

Counsel for the plaintiffs suggests that it is an apportioned part of the bailiff's salary and pension, together with his traveling expenses, but this seems to me to be an unlikely construction. Counsel for the local authority submits there is so little difference in point of time and expense between attending to make a levy and actually levying a distress that Parliament must have meant to refer to the fees payable on the making of the levy itself. I do not agree. If this had been what had been intended the section would have read, "He shall nonetheless he liable to pay the costs of the warrant and the minimum fees, charges and expenses which would have been payable if the levy had been made." In my judgment the intention of Parliament is clear. It contemplated that the Minister would make an order under section 101 of the Act which would specify the costs recoverable for attending to levy a distress. Section 101 (1) provides:

"The Minister (now the Secretary of State for the Environment) may make an order regulating the charges in respect of, and incidental to, the levying of distress for rates; and a warrant of distress under this Part of this Act may provide that the charges attending the distress, to the amount authorised by the order, shall be levied under the warrant."

For one reason or another, perhaps due to an oversight, he has not done so. As it has not been contended that in the absence of such an order "reasonable costs are recoverable, no costs are recoverable and the plaintiffs are entitled to be repaid the sum of £1,255.28. No doubt the Minister will wish to consider amending the Distress for Rates Order 1972, as a matter of urgency."

 

Comment:

This case continues to be of interest because it is surprising how often it happen that a bailiff gains entry to a debtor's premises and then fails to conduct a levy, - instead merely discussing how the debt will he repaid.

The judgment in Brinton's makes clear that such a discussion is not a levy.

Levying distraint involves some process of inspecting and selecting goods sufficient to cover the debt and costs (see Rai & Rai v Birmingham City Council) combined with some clear declaration or indication that this is being done.

In Brinton its no such process took place and, in its absence, there was no levy and no entitlement to levy fees.

This will still be the situation today, - if the bailiff fails to levy during a visit he cannot add fees for a seizure nor - of course - would he have any rights to force entry and remove goods at a later time.

The alternative argument was made that, in the absence of a specified charge for a visit on the fee scale then in operation, some sort of general staff overhead could be recovered. This was not accepted and bailiffs should always be careful to stay within the strict form of the applicable scale.

It is also interesting to note how the court was content to apply law developed on the context of executions to levies of statutory distraint. In many respects, the basic practice is identical in all forms of seizure of goods and rules of fundamental procedure are transferable.