Distraint.

[Asby Scar]

Hi there, I have a question relating to a small claim in relation to a commercial lease. The Tribunals, Courts and Enforcement Act 2007 supposedly abolished distraint, but the new rules on landlords and taking goods did not appear till 2014. Could landlords exercise distraint between 2007 and 2014? If so, what was the required process? All help appreciated and sorry if I posted in the wrong section!

[atticus]

The notes on the government legislation site say that the abolition of the right to distrain took effect on 6 April 2014. https://www.legislation.gov.uk/ukpga/2007/15/part/3/chapter/2

71 Abolition of common law right
The common law right to distrain for arrears of rent is abolished.

Commencement Information

I1S. 71 in force at 6.4.2014 by S.I. 2014/768, art. 2(1)(a)

[Asby Scar]

The notes on the government legislation site say that the abolition of the right to distrain took effect on 6 April 2014. https://www.legislation.gov.uk/ukpga/2007/15/part/3/chapter/2

So how would a landlord have had to exercise his right before then? What was the process?

This concerns an item alleged to have been "claimed" under the right from a museum whilst it was in receivership. Yet no record has been provided to show this.

The dates are really important, as the museum was in the hands of the official receiver in 2013 through to Feb 2014

[atticus]

I am very far from an expert on this, but as I understand it, distraint was simple seizure of tenant's goods.

In relation to insolvency, an area of law in which I practised, I think you may mean liquidation rather than receivership. If so, it may be important whether the liquidation was compulsory (by court order) or voluntary.

[Asby Scar]

I am very far from an expert on this, but as I understand it, distraint was simple seizure of tenant's goods.

In relation to insolvency, an area of law in which I practised, I think you may mean liquidation rather than receivership. If so, it may be important whether the liquidation was compulsory (by court order) or voluntary.

I am really grateful for your help.

I am only just starting to unravel things regarding the museum back in 2013 (I was at the other end of the country) so do not have the full story. The only "offfical" thing that I can find is a disclaimer issued under section 178 of the insolvency act and I think of the two options the voluntary start point is more likely.

For clarity the situation is this. Two individuals, one a collector, one a landowner with a premises and land adjacent, form a museum as a limited company. The idea is that the company pays the landowner rent. It fails to do so. In amongst this collector sells some items very shortly before filing for insolvency to my client (I restore old vehicles). One of these cannot be moved before the gates are shut and locked. I write to the solicitors acting for the museum shortly after that happens reminding them of the ownership of the item.

Eventually a new museum appears in exactly the same location and I write to them too, reminding them of my clients ownership of the item. Fast forward a number of years and it is discovered that the item has been sold to another party, who insists it is his. The landowner has entered the fray claiming the item was rightly his as he had levied destraint on all items in the premises and the sale was legitimate.

It would be helpful if there were a solid gold line of title for the item which ends up with my client, but there isnt, we are talking deals done by telephone and internet, not helped by the fact that the man selling the items was also a director of the museum company. it now all looks a bit shady...

[atticus]

Have you looked at the Companies House record for this company? That will contain information about the liquidation. s178 applies to both types.

[Asby Scar]

Have you looked at the Companies House record for this company? That will contain information about the liquidation. s178 applies to both types.

Details:

Compulsory Liquidation

Petition date Oct 2013

Commencement of winding up Nov 2013

Conclusion of winding up Nov 2014

Dissolved Feb 2015

[atticus]

There may have been a breach of s130 Insolvency Act 1986. It is doubtful whether anyone other than the liquidator has standing to take action. There are of course significant limitation obstacles to any action.

[Asby Scar]

There may have been a breach of s130 Insolvency Act 1986. It is doubtful whether anyone other than the liquidator has standing to take action. There are of course significant limitation obstacles to any action.

Very useful - thank you.

My work today has revealed that the initial transaction where my client purchased the goods was actually in 2011, well before the museum petitioned to be wound up and winding up work commenced. Thus at the time of winding up the goods had been my clients for 2 years. I think it unlikely but not inconceivable that the landowner levied for distraint prior to 2011, but he does not say so; in fact he inferrs that he did so just in advance (at best) of the winding up - as I read s130 it would appear that such a move would not be lawful once winding up had commenced, and by the time winding up were complete (nov 2014) distraint would have been abolished. I just need to find out when distraint happened (if, indeed, it did) without letting the cat out of the bag.

[atticus]

Where do you think this might be going?

[Asby Scar]

In what way? I am preparing for a small claims hearing in late march

[atticus]

For whom? Against whom? Claiming what? On what basis?

[Asby Scar]

For whom? Against whom? Claiming what? On what basis?

Would it be OK if I did not respond with the specifics but instead be slightly circumspect? After all, I would not really want to reveal my hand to anyone googling for any of the themes being discussed!

I hope you understand.

I had a look at s130 of the Insolvency act. Interesting stuff. My reading of it (correct me if I am wrong) is that no action, such as distraint, would be possible (at least legitimately and supported by law) once the winding up is underway.

My question is, what constitutes the "making of the order to wind up".; is that when the petition is lodged, heard, when a liquidator is appointed or some other point in time?

[atticus]

IIRC the date of commencent of the winding up in a compulsory case is the date of the petition.

[Asby Scar]

If the defendant to the claim declares he is bringing witnesses am I, as the claimant, allowed to question them?