Yes basic well done. So money paid straight to the creditor is proceeds?

Yes basic well done. So money paid straight to the creditor is proceeds?

Indeed , if the debt has been passed to the EA for collection, any payment will be the result of that enforcement, "proceeds of enforcement".

Coming back to the subject matter of the thread (Bailiff fees and the correct procedure to follow if a debtor pays the creditor direct) there are many wild theories posted on the internet about the position with payments being made direct and whether or not swearing on oath that a Notice of Enforcement had not been received will lead to any additional fees being invalid.

 

These ‘theories’ are based upon a wholly inaccurate interpretation of the judgment in the case of M v Mrs W and concern the enforcement of a writ of control by a High Court Enforcement Agent.

 

To ensure that only accurate information is given, the following is the correct position:

 

Mrs W could not afford to pay a judgment and applied to court (on an N245) to pay by instalments. Her application was heard a month later before a Judge. Her request (to pay by instalments) was refused (unfortunately, this happens very often). Exactly 7 days later, a certificate of judgment was granted and costs of execution (of £111.75) added.

 

In court, Mrs W was able to provide

unchallenged evidence

that five days after the certificate of judgment was granted, that she (or more accurately her husband) had made a personal visit to the creditor’s home and

hand delivered him a cheque to satisfy the judgment

. It should be noted that the amount of the cheque did not include the cost of execution of £111.75. Mrs W was unaware of this cost at the time of making her payment.

 

Three days after

handing the cheque to the creditor, a

writ of control was sealed

by the court.

 

Crucially, the creditor did not promptly bank the cheque (it seems that

he waited almost three weeks

) but more serious, was that he did not reveal to the enforcement company that he had received payment. In fact, it was a staggering

five weeks after

he had received the cheque, that he informed the enforcement company. By this time, enforcement agents has made visits to Mrs W's property and taken control of a motor vehicle.

 

The Judge considered that his (the creditors') actions were incompetent.

 

Although Mrs W had

provided evidence

to the court that she had not received a Notice of Enforcement, this was a very minor point given that the judge found that if the cheque had of been paid into the bank promptly as it should have been, that it would have cleared well within the period outlined in the notice of enforcement.

 

The court were satisfied that evidence proved that payment had been made

before

the writ of control was sealed by the court and accordingly, the Judge quite correctly revoked the warrant.

 

Mrs W was ordered to make payment of the the cost of execution of £111.75.

 

Both parties were ordered to pay their own (significant) costs.

The above case is referred to as Murgatroyd v Mrs Wilkinson and was heard at Middlesborough County Court on 24th March 2015.

In the next couple of days, I will be starting a new thread regarding a very important case that concluded last week. In brief:

After receiving a Notice of Enforcement in relation to an unpaid penalty charge notice, a debtor decided to ignore the instructions on the notice and instead, paid the council direct minus the compliance fee of £75. He did not take this action in ignorance of the correct procedure. This was evident, given that immediately after making his payment, he wrote to the enforcement company to tell them what he had done and informed them that they could no longer lawfully take control of goods etc. He also informed the enforcement company that if anybody attends his property, it would be considered trespass. A Notice of Removal of Implied Right of Access was also given to the enforcement company.

Enforcement agents did attend and two vehicles were clamped. The clamps were forcibly removed and the debtor drove both cars to a church car park approx. 400yards away. He considered that this location was 'private land'. His vehicle was removed by the enforcement agent the following day.

The debtor lost his case and has been ordered to pay £7,000 in costs. As mentioned, I intend starting a new thread regarding the case in the next day or so).

The purpose for re-posting on this thread is because, to support his case, the debtor also relied upon the case of Mugatroyd v Mrs Wilkinson (it was rejected in court). I will also start a new thread regarding that judgment as well.

Although I can see a new thread is proposed I'll add this here for now and perhaps BA can add it to her new thread as I'll be away. The LGO in a recent report indicates their agreement that the council should be splitting payments made to them direct in accordance with the fee regulations:-

http://www.lgo.org.uk/decisions/benefits-and-tax/other/16-014-707#point1

The LGO's comments are these:-

"Mr J was paying the Council directly. The Council was following the law by passing the bailiffs a proportion of these payments to clear the bailiff’s fees. Paying the Council directly does not mean the council tax debt is clear as the Regulations make clear any balance is made up of both the debt and the bailiff fees. "

That particular LGO decision is an extremely important one for many reasons. There is already a thread relating to it below:

http://www.consumeractiongroup.co.uk/forum/showthread.php?477356-Local-Government-Ombudsman-(LGO)-decision....Vulnerability-...Paying-the-council-direct...Pro-Rata-distribution-and-more.

Ah yes I'd not seen that thread. I'm glad you noticed the error, too. I gather the ICO has conceded it was their error.

Are the ideas in this thread now obsolete? As has been seen, the creditor has no obligation to part with any amount of a direct payment as direct payments are not subject to section 13.

Are the ideas in this thread now obsolete? As has been seen, the creditor has no obligation to part with any amount of a direct payment as direct payments are not subject to section 13.

Sorry but I have to correct this, the judgment says that the authority has no obligation to use the section 13 procedure,

(Application of proceeds where less than the amount outstanding ).

The authority has an obligation to pay, if for instance no further goods or sums are recovered.

The LA is just not bound to use the above procedure that is all.

The sums paid to the authority were raised whilst the debt was under an enforcement power, as defined in the act. They, therefore, may be used to settle fees.

More importantly, it does not stop the EA from enforcing until the amount outstanding as paid in full.

The authority has an obligation to pay, if for instance no further goods or sums are recovered.

In such a case the EA would be returning the warrant, so the fees would die. Unless you believe the EA is entitled to fees from the debtor when they've not actually recovered anything?

Only the ability to collect fees die on the return of the warrant, these fees have already been paid. Also, the warrant has not been returned.

As said in the judgment, the bailiff has a right to continue enforcement( no warrant is returned).

Sorry. The EA has recovered the money. because the debt was under an enforcement power when the proceeds were paid of course.

Only the ability to collect fees die on the return of the warrant, these fees have already been paid. Also, the warrant has not been returned.

As said in the judgment, the bailiff has a right to continue enforcement( no warrant is returned).

Dodgeball, if no further sums are recovered then obviously we have reached the stage where the EA has given up in which case the warrant is returned. Think about it - if the EA felt he was unable to recover anything then the council would say "well return the warrant then". The fees would then die - the council wouldn't say "even though you didn't actually collect anything here's £75 for your trouble".

Sorry. The EA has recovered the money. because the debt was under an enforcement power when the proceeds were paid of course.

No he hasn't, he hasn't recovered a penny. Again, think about it. The debt is under an enforcement power but a direct payment hasn't been collected using that power - the power is to use the sch12 procedure, a direct payment hasn't been collected by using any part of sch12. If you can show us where sch12 legislates for direct payments please share it with us.

Next thing you'll be telling us is that sch12 says "money" only means pounds sterling.

The only reason for this argument taking place again and again, is because the law is not totally clear.

But the consensus from what i have read is that once a debt goes out for enforcement, then you need to look at the specific law e.g council tax, PCN's. There is usually an escalation process written into the law that applies, that once say a council tax liability order has gone out for enforcement, that the relevant costs of enforcement become due. If you paid a council directly, any money paid is part of the enforcement period proceeds. They might not pass it to the EC. But the EC is still able to continue pursuing the total amount due including all enforcement costs.

Bailiff Advice has explained this on numerous occasions with evidence to support. I cannot see the point of continuing to debate the subject unless you can point to court cases with precedence or LGO decisions.

 

Next thing you'll be telling us is that sch12 says "money" only means pounds sterling.

What does this mean?

The only reason for this argument taking place again and again, is because the law is not totally clear.

 

But the consensus from what i have read is that once a debt goes out for enforcement, then you need to look at the specific law e.g council tax, PCN's. There is usually an escalation process written into the law that applies, that once say a council tax liability order has gone out for enforcement, that the relevant costs of enforcement become due. If you paid a council directly, any money paid is part of the enforcement period proceeds. They might not pass it to the EC. But the EC is still able to continue pursuing the total amount due including all enforcement costs.

 

Bailiff Advice has explained this on numerous occasions with evidence to support. I cannot see the point of continuing to debate the subject unless you can point to court cases with precedence or LGO decisions.

Yes, this is correct.

The Bola v Harrow & Newlyn judgment has been extremely interesting. Yes, it does clarify that the local authorities are not legally bound by the TCEA 2007 to deduct the compliance fee from 'direct' payments, but in fact, that was actually a very minor point in the judgment.

The most significant part (of the judgment) was the clarification that the 'enforcement power' commences with the issuing of the Notice of Enforcement (with the compliance fee added), and that an enforcement agent is legally entitled to continue enforcement until the amount due is paid to him (which will include all bailiff fees).

Therefore, if a debtor wishes to ignore the strict instructions on the Notice of Enforcement as to the three ways in which to make payment of the amount due (including bailiff fees) and instead, diverts his payment to the creditor direct, then the enforcement company are legally entitled to continue enforcement of the writ to recover the balance. It really is that simple.

The judgment has served as a stunning blow for debtors with judgments that are passed to the High Court for enforcement as once again, if a debtor ignores the payment instructions on the Notice of Enforcement, and instead, pays the principal debt (minus bailiff fees) to the creditor direct, then the High Court Enforcement Agent can continue enforcement until he recovers the amount due. There is nothing complicated about it.

The only reason for this argument taking place again and again, is because the law is not totally clear.

Absolutely.

But the consensus from what i have read is that once a debt goes out for enforcement, then you need to look at the specific law e.g council tax, PCN's. There is usually an escalation process written into the law that applies, that once say a council tax liability order has gone out for enforcement, that the relevant costs of enforcement become due. If you paid a council directly, any money paid is part of the enforcement period proceeds. They might not pass it to the EC. But the EC is still able to continue pursuing the total amount due including all enforcement costs.

Not quite - as was explained in the transcript, direct payments cannot be classed as proceeds otherwise they would be bound by s13 of the 2014 regs - they are not bound. There is no choice in the matter, if they were bound then s13 must be followed - if direct payments were proceeds of enforcement then s13 must be followed. Newlyn's barrister explained that to call direct payments proceeds of enforcement would be a legal nonsense and the judge agreed. 80% of the FOIs also agreed in that in such cases the EA must pursue his fees separately.

There are no 'enforcement period proceeds' only 'proceeds of enforcement'. These proceeds can only come by using the sch12 procedure - this procedure does not legislate for direct payments only payments taken by the EA.

Once it's out for enforcement only one law is relevant - TCE2007 especially sch12 and the attached regs.

Bailiff Advice has explained this on numerous occasions with evidence to support. I cannot see the point of continuing to debate the subject unless you can point to court cases with precedence or LGO decisions.

No tangible evidence has been provided - LGO decisions are not even close to legal decisions and deal with matters case by case taking each on on it's own merit. The ones that BA decides to post up are usually regarding whether fees are due - no-one disputes that fees are due only that the councils should not be using direct payments to pay those fees.

The fact that the direct payment is not mentioned merely confirms that the procedure does not alter, it is net relevant. It does not mean that the debtor can invent some procedure which allows him to withhold payment.

Common sense apart from anything else would suggest, that a debtor who has failed to pay despite previous enforcement methods, but who suddenly pays after the debt is passed to the bailiff, would have paid as a result of the EAs involvement.

In any case if this is not apparent , the statute says money recieved etc.

Newlyn's barrister explained that to call direct payments proceeds of enforcement would be a legal nonsense and the judge agreed. 80% of the FOIs also agreed in that in such cases the EA must pursue his fees separately.

I think that you are maybe trying to confuse the true position.

The judgment made clear that the power to enforce comes from the Notice of Enforcement and that until... and unless... the enforcement agent has received payment of the 'amount due' (which will include the compliance fee) that the enforcement power does not cease, and he can continue enforcement. There is nothing complicated about it.

If anyone wants to make payment online to the creditor direct of just the principal debt, then they can do so, but they need to be to be aware that the enforcement agent will continue to enforce for the balance.

Fortunately, over 80% of local authorities recognise that the governments aim, in ensuring that the Compliance fee of £75 was deducted first, was to curb aggressive behaviour and accordingly, when a direct payment is received, they either pass over the entire payment or pass over just the compliance fee to the enforcement company and frankly, there is nothing wrong at all in them doing so.

Almost certainly, there will be some contractual agreement between the local authority and enforcement agent regarding these 'direct payments'.

PS: I won't be responding further until much later (Bank Holiday with the family).

Fortunately, over 80% of local authorities recognise that the governments aim, in ensuring that the Compliance fee of £75 was deducted first, was to curb aggressive behaviour and accordingly, when a direct payment is received, they either pass over the entire payment or pass over just the compliance fee to the enforcement company and frankly, there is nothing wrong at all in them doing so.

Do you have a source for that 80% figure as my FOIs state the exact opposite. Can you also explain under what legal compulsion the authorities would be relying upon should they decide to pass on payments? Remember, calling direct payments 'proceeds of enforcement' thus bound to s13 would be 'a legal nonsense'. So why should public money be diverted in this way?

Question for the mods - how long does someone get to edit a post?

Question for the mods - how long does someone get to edit a post?

10 mins as per the Forum Rules ..which I note you have yet to read.

http://www.consumeractiongroup.co.uk/forum/showthread.php?9-FORUM-RULES-Please-read-these-before-posting(1-Viewing)-nbsp

Andy

10 mins as per the Forum Rules ..which I note you have yet to read.

Not in this incarnation.

So how would someone go about editing a post say, oh about 45 mins later?

Not in this incarnation.

 

So how would someone go about editing a post say, oh about 45 mins later?

You mean you have read it under all your previous moderated accounts.....in a word you cant so make sure your post is correct before hitting the post button.

.....in a word you cant so make sure your post is correct before hitting the post button.

Hmmmm..... it seems some are able to do so. Perhaps someone should check the permissions of the posters on this thread, you know, just to make sure.