Culligan v Simkin & Marston Group Ltd [2008] DJ Avent, Central London county court, September 24th 2008. Claim number: 8CL51015

Background.

This was an application for 'detailed assessment' of the fees charged by Marston Group and their employee, Mr. Simkin, in respect of the enforcement of a road traffic penalty due to LB Camden. The defendants levied execution upon the claimant's motor car by clamping it on his drive and leaving him with a copy of the 'Notice of seizure of goods and inventory' (Form 7) prescribed by the Distress for Rent Rules 1988 (which are applied to this form of execution). This form set out the penalty which was being enforced and demanded payment of the outstanding penalty charge notice plus their costs- a total of £417.97 including VAT. The disputed fees were those for levying (£38.14), for immobilisation (£100) and for attendance to remove (£100). In the event Mr. Culligan was absent on business at the time of the levy and his wife paid the entire sum demanded in order to have the car released.

Bailiffs levying these warrants of execution operate under a fee scale laid down in Schedule 1 of the Enforcement of Road Traffic Debts (Certificated Bailiffs) Regulations 1993. In paragraph 2 this scale allows for a charge to be made for levying on goods, which is calculated as a percentage of the sum due (as was the case here). At paragraph 6 the scale allows a reasonable charge for "removing goods, or attending to remove where no goods are removed." It was these two fees on his bill which Mr. Culligan disputed. He did not feel that an immobilisation fee could be charged if a levy fee had already been added to the account; secondly, he did not agree that £100 was a reasonable sum. Mr. Culligan also did not feel that the 'attendance to remove' fee could properly be charged as the prescribed form (Form 9) required by the Rules had not been issued. Mr. Culligan also sought to challenge the bailiff's fitness to retain his certificate on the basis that he had behaved improperly and dishonestly. The judge did not accept this allegation and did not pursue the matter as Mr. Simkin was merely following his employer's normal practices.

Judgment having outlined the facts of the case the district judge stated "it seems to me that there are five issues, the first of which is a subsidiary point but nonetheless needs to he dealt with, as follows:

a) Does failure by the bailiff to deliver a memorandum in the prescribed form 9 setting out the expenses of removal mean that an essential precondition has not been complied with such as to make the removal expenses irrecoverable?

b) In any event, does the application of an immobilisation device (i.e. a wheel clamp) fall within that part of the enforcement process relating to taking control of goods or as part of the removal process?

c) If it relates to levying distress, is the bailiff restricted in what he can charge by the effect of paragraph 2 of Schedule 1?

d) If it relates to the removal process, is the charge of £100 made with respect to the immobilisation device reasonable?

e) In any event, is the charge of £100 for the attendance to remove goods, even though they were not removed, reasonable?

The answer to the final issue lies in a consideration of the Rules and relevant case law. Rule 12(2) and (3) specifies that:

"(2) A bailiff levying distress shall deliver to the tenant, or leave at the premises where distress is levied, a memorandum in Form 7 identifying the bailiff and specifying in an inventory the goods distrained and setting out the amounts for which the distress is levied and the fees, charges and expenses authorised by these Rules and being actually and necessarily incurred under them.

(3) A bailiff or his agent attending to remove goods from the premises or withdrawing from possession prior to the sale of the distrained goods shall deliver to the tenant or leave on the premises where distress is levied a memorandum in Form 9 setting out the expenses of removal authorised by and incurred under these Rules."

Accordingly, there is a clear distinction made by the Rules as to the type of prescribed form to be used between levying distress and attending to remove goods. Indeed, whilst the actual forms, Forms 7 and 9, are different to each other, they contain a considerable amount of detail which is common to them both. Mr. Culligan's point is that Form 9 was never served, delivered or given to him. The defendants accept this.

To deal with this submission the defendants drew my attention to and relied upon a Court of Appeal decision in the case of Quinlan v Hammersmith & Fulham London Borough Council [19881.29 The local authority in that case had obtained a distress warrant in respect of unpaid rates but failed to give the rate-payer, Mr Quinlan, a notice of distress and inventory in accordance with the provisions of the Distress for Rates Order 1979. The Court held that whilst this was an irregularity in the execution of the warrant, it did not render the distress illegal and therefore Mr. Quinlan could recover damages only if he sustained special damage as a result of the failure ... Mr. Culligan accepted that the wrong form, being an irregularity, did not make either the levy or the proposed removal unlawful and that, accordingly, it did not preclude the charges being imposed or otherwise render them unlawful. Indeed, if he had not accepted this I would consider myself to have been bound by the Quinlan case and to have held that the absence of Form 9 was not fatal to the bailiff's case. Rule 12(3) requires the Form to set out the expenses of removal authorised by and incurred under the Rules and the Form 7 which was served in this case did just that. It enabled Mr. Culligan to ascertain the amount that had to he paid.

The second issue, on its face, is considerably more problematical, not least because the law relating to distress treads a rather tortuous, inconsistent and complicated path. It also requires, in my view, an interpretation of Schedule I which I have found difficult because of the way in which the concept of distress is dealt with in the two sources to which I have referred. The first is Halsburys' Laws of England vol.13 relating to the law of distress and the second is the decision of Simon Brown j in the case of Evans v South Ribble Borough Council [1992].

In the first instance Halsburys at para.902 seeks to define distress in the following terms:

"The term 'distress; primarily connotes a summary remedy by which a person is entitled without legal process to take into his possession the personal chattels of another person to he held as a pledge to compel the performance of a duty, or the satisfaction of a debt or demand. By almost universal sanction the term 'distress' is now used to designate both the process of taking and the chattels taken, though originally it applied only to the taking. By statute, remedies referred to as distress have been introduced for the recovery of rates and taxes and for the enforcement of certain fines imposed by or orders of magistrates' courts."

A footnote to that paragraph refers to the definition given in Bradby, Law of distresses, 2 edition, which is:

"A distress is the taking of a personal chattel, without legal process, from the possession of a wrongdoer, into the hands of the party grieved, for the redress of an injury, the performance of a duty or the satisfaction of a demand."

So far so good. In this instance distress is being used, via statutory provisions, as a remedy to enforce non-payment of PCNs. However, at paragraph 992 and subsequently Halsburys there is then a consideration of what might he considered to be the essential elements of a distress under the general heading of 'Levying the distress.' As well as the formal requirements necessary, it also deals with the issue of seizure which it notes: "To complete a distress a seizure of the chattels is necessary. A seizure may be either actual or constructive, it is actually by laying hands on the article, or on one of several articles, and claiming to detain them until the rent is satisfied. The most proper manner of making a distress is for the person distraining to go on any part of the premises out of which the rent issues and take hold of some personal chattel declaring that it is taken as a distress in the name of all the goods, or of so much as will be good seizure of all. No particular form of words is however necessary, provided the intention is manifest."

Para,1O1O deals with the issue of constructive seizure as follows:

"A constructive seizure may occur in various ways. It is enough that the landlord or his agent interferes to prevent the removal of the article from off the premises on the ground that rent is in arrear, and that he does this when he declares that the article is not to be removed until the rent is paid, and it is immaterial that the article is subsequently removed.

Any acts indicative of an intention that antecedent steps should be treated as a distress, and assumed by the parties to amount to a distress, will he sufficient evidence of a seizure. Thus, if money is paid on the footing that there has been a distress, or if the bailiff after intimating his intention to distrain walks around the demised premises and, without touching anything, gives written notice that he has distrained, that will amount to a seizure." This section of Halsburys is then followed by a further general heading entitled 'Proceedings between seizure and sale.' This explains that:

"When chattels have been seized, it is necessary to imprison and secure the chattels for safe custody until the cause of distress is satisfied or the statutory period has elapsed at the expiration of which the chattels can be lawfully sold by reason of the tenant failing to replevy them. This imprisonment, called impounding, places the goods in the custody of the law. If, before the chattels are impounded, the tenant tenders a sufficient amount for rent and costs, it is unlawful to proceed further with the distress. Chattels may be impounded on the premises unless the tenant otherwise requests or they may be removed to a pound off the premises."

It needs to be borne in mind that these sections of Halsburys' discuss the law of distress in the context of distress for rent and therefore should perhaps not readily be applied to the current situation without some consideration of the practical differences. The most obvious, of course, is that the bailiff in this instance did not have to effect an entry onto premises because Mr. Culligan's vehicle was outside his house; entry, in such circumstances, would clearly have to be a prerequisite to a lawful distress.

It will also be appreciated, given the above observations and the fairly wide definition of 'a seizure', that the mere act of Mr. Simkin placing a seizure notice (in form 7) on Mr. Culligan's vehicle was sufficient in itself to amount to a seizure. Accordingly, in that sense, the defendant was correct to say that the fitting of an immobilisation device was not necessary to complete the seizure and was a distinct and separate act. Given that, there was clearly, in my judgment, on the facts of this case, an actual seizure. I do not therefore propose to consider any question of a constructive seizure, whatever that might or could have been in the context of this case.

Having therefore established that the immobilisation device was not a necessary and integral part of the seizure process, the next consideration is to look at what purpose it did serve. The defendant sought to persuade me that this was part and parcel of the removal process. They noted that unless there had been a seizure then there was no right to apply an immobilisation device (a submission with which I agree) and that because its application followed the seizure it could then form part of the removal process either directly or indirectly as preparation for removal. Indeed, they told me that this interpretation accords with the view of local authorities in London. Further, they suggest that as para.6 of Schedule 1 refers to "reasonable costs and charges" in the plural it envisaged that there may be more than one expense i.e. a cost of clamping and a cost of removal. With respect to them, it is no doubt correct that the plurality can cover several expenses, but, in my view, it does not validate a cost or charge that cannot be characterised as a removal expense in the first place.

I have considered and reflected on the defendant's viewpoint in some depth because in practical terms I understand why that submission is made. However as a matter of law I think, with respect to counsel and the London Boroughs, that it is wrong. In my judgment, the whole purpose of applying an immobilisation device to Mr Culligan's vehicle was to impound the vehicle and that is exactly what was achieved. I say this for three reasons. The first is that the bailiff's obligation will be to secure the vehicle so that, if need be, it can subsequently be sold in order to discharge the outstanding monies under the distress warrant and outstanding PCN. The simplest and cheapest way to do this is to immobilise the vehicle and to prevent it being driven away by the application of an immobilisation device or wheel clamp. This is effectively the equal of impounding the goods on the premises.

Again, it is necessary to remember that the bailiff was dealing with enforcement against a vehicle and was not distraining for rent. To gain access to a property to distrain will usually require the debtor to be present (because he will have to allow entry). The same will not usually he true in relation to a vehicle on a road where the owner or debtor will not usually be present. The sheer reality of the latter situation would rather preclude the bailiff from, for example, seeking an agreement for walking-possession as he might do if the goods were on the premises. An immobilisation device placed on a vehicle is nothing but the practical equivalent of a locked door within the premises to secure the goods.

Secondly, I note that r.12(2) and (3) of the 1988 Rules clearly envisage two stages. The first is the levying of the distress and the second is the removal of the goods. This gap between the two stages, and the requirement that forms 7 and 9 should be given, must be in order to allow the debtor to make payment of what is due at each stage.

Accordingly, in my judgment the bailiff should not, and as a matter of law cannot, take any steps to remove goods until he has given the debtor a reasonable opportunity to pay what is due at the time of seizure. This being so I cannot see that form 7 can or should include any costs of removal. Mr Simkin included on the form 7 he produced for Mr Culligan the sum of £100 in respect of the clamp. If, as the defendants now argue, that was part of the removal expenses, it should never have been included in the form 7. The fact that the immobilisation device was applied contemporaneously at the time of seizure is confirmation that this was an impounding and formed part of the levying distress.

Thirdly, by definition, an immobilisation device primarily does exactly that, it immobilises and prevents removal. On my interpretation of the wording of para. 6 of Sch.1, I cannot see that the application of an immobilisation device can fall within the definition of "removing." The Oxford English Dictionary states the verb 'remove' means to 'move or shift from or out of the place occupied, to lift or push aside, to lift up and take away, to take off, to take or convey from a place." That clearly is the exact opposite to what the immobilisation device is designed to do. Nor can I accept that its application forms part of the preparation for removal.

I turn now to the case of Evans. This case concerned the enforcement of a community charge liability where the bailiff simply posted a notice of distress through the debtor's letter box together with a draft walking-possession agreement. On appeal by way of case stated Simon Brown J determined that the distress was effectively unlawful because no entry had been gained to the debtor's premises, which was an essential element of distress.

That, as have already explained, is not in issue here but, in the course of his judgment Simon Brown J, having reviewed various matters, set out an exposition of the current position regarding distress, the relevant parts of which are as follows [District Judge Avent then cited the paragraph from the Evans judgment in which the stages of entry, seizure and impounding are identified and analysed. It is clear from the first and fifth principles set out by Simon Brown J in Evans that a distress does, and indeed according to his definition, must include the act of impounding.

Para.2 of Schedule 1 of the Regulations permits the bailiff to make a charge for 'levying distress.' The Oxford English Dictionary defines 'levy' as "the action of collecting debts or enforcing the payment of fines" and the action of levying as "the action of collecting an assessment, duty, tax etc." Accordingly, in answer to the second issue, I find that the application of an immobilisation device falls within the act of levying distress and does not form part of the removal process. The consequence of this, and the answer to the third issue, is that the bailiff cannot recover the £100 charge for the immobilisation device, regardless of what the contract with Camden may say, insofar as it exceeds the limits imposed by para.2 of Sch.1. In this case, as the levy fee of 38.14 plus VAT has already been demanded the bailiff cannot recover from Mr. Culligan any more than that amount. I find therefore that in this instance the £100 charged for the immobilisation device cannot be recovered.

If I am wrong in relation to my analysis of the second issue and the act of immobilisation does, in fact, form part of the removal expenses, then to answer the fourth issue, I would still find that it cannot be recovered from Mr. Culligan because the defendants have produced no evidence whatsoever that it is reasonable in amount. What they have done is simply reply upon the fact that their agreement with Camden stipulates a charge of £100 and suggested that this is enough. That is clearly not sufficient. Indeed, for myself, I would find very great difficulty in accepting that the cost of applying an immobilisation device to a vehicle, even allowing for the capital cost of the device (which could then, of course, be used many hundreds of times) was anywhere near the sum of £100. It seems to be a completely arbitrary figure which in reality should be substantially less. As regards the fifth issue, namely whether the charge of £100 was reasonable for the removal costs (although the vehicle was never actually removed), the same reasoning applies: namely, that the defendants have produced no evidence as to how the charge has been arrived at and therefore are unable to show that it is reasonable.

In passing I would mention that I take the view that even the removal of a vehicle to a pound appears to fall within the definition of levying distress. However, it seems that for the purpose of the bailiff's charges and costs both r.12 and Sch. 1 differentiate between the initial stages of the levy and the subsequent removal of goods (or effectively, impounding off the premises) allowing two charges to be made. As the Schedule specifically permits charges for removal this would, in my judgment, tend to stifle any argument to the effect that the removal charges were not recoverable except under para.2 of Sch.1.

In conclusion, therefore, I find that the immobilisation charge insofar as it exceeds the amount stipulated by para.2 of Sch.1 is not recoverable by the bailiff. Indeed, neither that charge nor that made in respect of the proposed removal of Mr Culligan's car is recoverable because there is no evidence by the receiving party of the reasonableness of those charges.

I realise that the non-payment of PCNs in London and other metropolitan areas is a huge problem. I am also conscious that my findings in this case (and I am clear in my conclusions on the arguments and authorities before me) may have wider consequences and may cause problems for bailiffs because they will not be able to charge for immobilising a vehicle as a separate charge but must include it within the cost of levying. To do otherwise would, in my judgment, be unlawful. I would also add that if the defendants or either of them, in the light of this judgment, now continue to apply such charges in the manner in which they have done up to now and, specifically, charge fees of £100 for applying an immobilisation device, then that would amount to conduct which may well then found a legitimate complaint because in my judgment it would be unlawful.

I will therefore order that the defendants pay Mr Culligan the sum of £235 being the sum due in respect of refunding the immobilisation and removal charges. I will also order that the defendants do pay Mr Culligan's costs of the detailed assessment, which as far as I can see, will only amount to the £40 issue fee."

In analysing this judgment we should perhaps start with a couple of amendments to the judge's statements:

 

Comments

1. Although often called 'distress', the enforcement of road traffic penalties is in fact a form of county court execution. The warrant issued by the Traffic Enforcement Centre is a warrant of execution for the enforcement of a county court order. It is because of this fact that county court execution is being placed in the hands of private rather than county court bailiffs that the elaborate regulations were devised. These borrow from the County Courts Act 1984 but also from the Distress for Rent Rules 1988, to which a link is made so that the county court has some jurisdiction and control over the bailiffs by means of the certification process. In this case, the judge declined to impose any sanction on the certificate held by the bailiff, but in the closing paragraphs he did warn explicitly that continued charging along the lines seen in this case would be the matter of a certification complaint.

2. The district judge discussed the levy as if no entry had been made to the premises. This is not strictly correct. Mr. Culligan's house was not entered and household furniture and effects were not seized. However, the car was on his drive, not in the street. There was an entry onto his property under the bailiff's implied license to enter land under a lawful warrant. The key points of the judgment are as follows:

3. Status of clamping as impounding and not as removal. This seems hard to dispute, not least for the simple logical case that clamping is the physical opposite of removal, Of course, no argument about the legality of the act of clamping was raised and this was not therefore considered. Irregular seizure - in concluding that the absence of the form 9 was only an irregularity, it would also he possible to use s.125 County Courts Act 1984 (which is applied to road traffic executions by the Enforcement of Road Traffic Debts Order 1993). Special damages could be claimed for any irregular act: this could be used to recover the removal fees charged without the use of the proper notice.

4. Forms 7&9- few enforcement companies seem to use form 9, despite its use being prescribed by the Distress for Rent Rules. In the Culligan case the form 7 was sufficiently detailed in its breakdown of the charges to make up for the absence of the form 9. However, some bailiffs merely include a total figure for charges of the notice of seizure. This is probably inadequate as a notice which complies with the requirements of either forms 7 or 9.

5. The delay between levy & removal- most controversial amongst enforcement agents will be the decision that there must he a delay between seizure and removal. This is probably incorrect. There will plainly be cases, especially concerning cars, where removal follows immediately from seizure. That said, where goods have been impounded by walking-possession there is an implicit expectation that there will be a delay before removal, which may call into question the propriety of any removal charges added at the levy stage.

6. Assessment of fees- lastly, this was an application for detailed assessment of the bailiff's charges and the district judge concluded his judgment by dealing with these issues. Detailed assessment involves consideration of a number of aspects of the fees added to the account. One involves the bailiff justifying the reasonability of a charge by demonstrating the basis upon which it is calculated (for example, the hourly rate of the bailiff, the costs of petrol etc). Neither for the clamping fee, nor for the attendance fee, could a breakdown of the fee be provided and, as a result, they were both disallowed. In this respect the case of Culligan echoes that of Flanagan, a round figure was charged for an activity unrelated to the actual cost to the enforcement agency.

 

Conclusion

Reconciling a fair return for commercial enforcement agents whilst simultaneously protecting indebted individuals from an unfair burden of charges has been a constant concern for government for the last four centuries.

The tension has yet to he resolved satisfactorily and all too often the result has been low statutory fees scales which have been circumvented or ignored.

The courts continue to have a vital role as arbiters between the parties.