Neumann v Bakeaway Ltd (Note)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MEGAW,LORD JUSTICE GEOFFREY LANE,SIR JOHN PENNYCUICK |
| Judgment Date | 19 January 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0119-3 |
| Date | 19 January 1977 |
| Court | Court of Appeal (Civil Division) |
[1977] EWCA Civ J0119-3
In The Supreme Court of Judicature
The Court of Appeal
(Civil Division)
(From: Master -Creightmore - London)
(Revised)
Lord Justice Megaw
Lord Justice Geoffrey Lane and
Sir John Pennycuick
Mr. ROBERT REID (instructed by Messrs. J. Tickle & Co.) appeared on behalf of the Appellant (Claimant).
Mr. GEOFFREY. SHAW (instructed by Messrs. Burchell & Ruston) appeared on behalf of the Respondent (Sheriff).
I shall ask Lord Justice Lane to deliver the first judgment.
On the 3rd May, 1973, Mr. Neumann, the plaintiff in this matter, let his shop at 482 Chiswick High Road, W.4, to a limited company called Bakeaway Ltd., for a term of 20 years at an initial annual rent of £2,200. On the 18th July of the same year that company granted an underlease, for 20 years again, to date from the 3rd Kay, 1973, at the same rent, to a Mr. Ghotli. Mr. Ghotli duly took possession. He took possession under the terms of what is called a franchise, which he held of Bakeaway Ltd., to sell their cooked foods. He carried on that business upon those premises until some time in May of the following year, 1974. Mr. Ghotli, who is the claimant in these proceedings, continued to live above the shop until about July, 1974. On the 23rd July of that year a writ was issued by the plaintiff Neumann against the limited company and a man called Pinney, who was a guarantor of the lease. On the 24th October, 1974, the plaintiff obtained judgment for £550 arrears of rent and for a sum in respect of mesne profits, and costs. That judgment, on the 11th November, 1975 - that is to say some 13 months later - was set aside by Master Lubbock, on grounds which are not altogether clear in these proceedings. But what is clear is that the execution creditors never informed the Sheriff of the fact that that judgment had been set aside; and indeed the solicitors appearing for the execution creditors seem throughout to have maintained a diplomatic silence despite all the letters which were addressed to them. However (and this is the nub of the present proceedings) in between the time when judgment was obtained in October, 1974, and the time when that judgment was set aside in November, 1975, the Sheriff had been instructed to levy execution upon the goods and chattels of the defendant company,Bakeaway Ltd.
The terms of the writ, in so far as they were material, were these: "We Command that You enter the said land and cause Moshe Marcel Neumann" (the plaintiff) "to have possession of it. And We also Command You that of the goods, chattels and other property of Bakeaway Ltd. in your County authorised by law to be seized in execution you cause to be made the sums of" (and so on) "until payment"; and then finally, on what is for us the third page, there are the final words: "The defendant is a limited company and carries on business at 482 Chiswick High Road, London, W.4. Those words have a materiality which will become apparent at a later stage.
Unfortunately, a quantity of the goods which were seized by the Sheriff in purported execution of that writ belonged, not to the defendants, but to Mr. Ghotli, the claimant The goods were seized, so we are told, in December, 1974, and they were sold by auction on the 25th April, 1975. Up to that time no claim had been made to the goods by anyone, certainly not by Mr. Ghotli, though he was to some extent, it seems, aware of what was likely to be going on in the light of a letter which apparently was written on his instructions or on his behalf on the 22nd January, 1975
The goods were sold, as I say, at auction, and realised the sum of £429 odd, from which the Sheriff's costs of the sale were deducted, leaving something over £200 net as the proceeds of the goods. Mr. Ghotli has two complaints. His first complaint is that the goods were seized and sold when they were his goods and not the goods of the defendant company, and, also, that those goods were worth much more than the £429 which in fact they realised. His second complaint - the main complaint in these proceedings - is that the Master, when the matter came before him on interpleader proceedings, made an order which protected the Sheriff fromproceedings which night be brought against him by Mr. Ghotli, the claimant.
What happened was this. The execution creditors, as I say, refused to answer letters, They refused to say whether they disputed the claims of Mr. Ghotli, which by this stage had been made. So the Sheriff issued interpleader proceedings under Order 17 Rule 2 of the Rules of the Supreme Court. Mr. Neumann, the plaintiff, was on one side, so to speak; Mr. Ghotli was on the other; and the Sheriff was in the middle, waiting for the outcome of the decision of the Master.
The matter came before Master Creightmore on the 16th July, 1976. The claimant was represented by a solicitor, Mr. Janisch. The Under-Sheriff appeared to represent the Sheriff's Office. The order that was made, in so far as it is material (set out at page 8 of the first bundle that is before us), reads as follows: "It is Ordered that the Sheriff withdraw from possession of the proceeds of sale of goods seized and sold by him under the writ of fieri facias herein and claimed by the Claimant that no action be brought". That is the imprecise, somewhat unsatisfactory jargon which indicates that the Master is making an order under Order 17 Rule 8, protecting, as I say, the Sheriff from proceedings in conversion or trespass in respect of the goods of the claimant which had been seized. The wording of Order 17 Rule 8 is as follows: "Subject to the foregoing rules of this Order, the court may in or for the purposes of any interpleader proceedings make such order as to costs or any other matter as it thinks just"; and there is ample authority for the contention (which is indeed not disputed) that under that Order it is open to the Master, in a proper case, to make the protective order which in fact he did.
That order is, in these proceedings, contested by way of appeal by the claimant, through his counsel, Mr. Reid, who, if I may sayso, has put forward his case with clarity and brevity and precision. He submits that in the circumstances of this particular case that order, directing that no action should be taken, should not have been made. It seems (and speaking for myself I understand it) that Mr. Janisch, the plaintiff's solicitor, was somewhat taken by surprise when this protective order was made. Possibly (there is no reason to believe the contrary) he was not as experienced as he might have been in this particular type of proceeding, which is somewhat recondite; and the result was that he had not sufficiently prepared the evidence to meet the possibility of the protective order being made. Consequently, before this Court an application was made by Mr. Reid that he be permitted to adduce further evidence which was not before the Master. This Court gave leave for an affidavit from Mr. Janisch, dealing with the proceedings before the learned Master, to be admitted; but we reserved our decision on the question of whether the further affirmation from Mr. Ghotli, in addition to the one which was before the Master, should be admitted before this Court. We now give leave for that further affirmation to be used as evidence here.
The propositions put forward by Mr. Reid are as follows. First of all, he submits that if the Sheriff sells goods that in fact do not belong to the judgment debtor but belong to some third party, he is liable in conversion, however innocently he may have been acting. For that proposition he cites the authority of Jelks v. Hayward (1905) 2 King's Bench 460. There is a passage in the judgment of Lord Alverstone, Chief Justice, at page 465 to which he refers and which runs as follows: "After considering the authorities dealt with by the County Court judge in his judgment, I have come to the conclusion that in this court at any rate we must hold that if the high bailiff sells goods, of which the owner is entitled at the time of sale to retake possession, he is liable introver It is unnecessary for me to deal at length with the string of cases cited, beginning with Dean v. Whittaker. because the County Court judge fully recognises that, if it were a more question of seizing the goods and holding them, the bailiff might he protected, inasmuch as up to a certain point the owner of the goods was not entitled to possession" At the foot of the page Lord Alverstone says this: "To my mind the effect of the decision in the latter case" - that is, Manders v. Williams (4 Exchequer 339) - "is that, if at the time of the sale the owner is entitled to take possession, the sale is an act of conversion as against him, and I am unable to see that the right to sue in trover depends upon any notice given to the sheriff or high bailiff. It is a branch of the general law that the sheriff seizes and sells goods at his peril, and I see no reason why a County Court bailiff is in that respect in any better position than the sheriff".
That proposition is challenged by Mr. Shaw, on behalf of the Sheriff. His submission is this. He says that the court should have regard to the words of the Sheriff's writ to which I have made reference, and, in particular, to the last words which appear on the writ, those stating "The defendant is a limited company and carries on business at 482 Chiswick High Road, London, W.4". His argument proceeds in this way: Those words are new: they did not until recently appear upon this form of writ: consequently (submits Mr. Shaw) there must have been an intention to change the effect of the writ. It is, he says, accepted law that the Sheriff is protected by his writ, and, he goes on to submit, those...
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