In an earlier article we covered interpleader proceeding that arise when a third party claims ownership of the goods a High Court Enforcement Officer (HCEO) has seized.
The other situation when interpleader proceedings can arise is when the judgment debtor claims that the goods that have been seized are actually exempt from seizure.
There are two primary types of goods that may not be seized – tools of the trade and items essential for basic domestic needs.
“Tools of the trade” only relates to sole traders, not to partnerships or limited companies, and the tools must be exclusively for the use of the debtor to be exempt. For example, if a farmer allows a labourer to use his tractor, then the tractor is not exempt from seizure.
With goods essential for basic domestic needs, this includes clothing, bedding, furniture and other basic items. It then becomes a judgement call for the HCEO as to which household items are essential or luxury. While enforcing a writ recently, one of The Sheriffs Office HCEOs was told by the defendant that a smoothie maker was exempt from seizure, as it was essential for basic domestic needs!
Items clearly belonging to children may not be seized.
There are also certain premises where an HCEO may not enter to seize goods, in particular royal palaces and premises that have diplomatic status, such as embassies and ambassadors’ official residences.
However, should an HCEO seize goods and the judgment debtor believe they were exempt from seizure, then the debtor needs to make a formal claim to the HCEO in writing. This must comply with RSC Order 17. The HCEO will, in turn, write to the creditor advising them of the claim who should respond within 7 days of receipt either admitting or disputing the claim.
If the creditor disputes the claim, the HCEO will make an interpleader application to the High Court for a hearing. This will be heard by a Master in the Royal Courts of Justice in London. The Master will look at any evidence and decide whether the goods are exempt from seizure.
If the creditor admits the claim, the HCEO will release the goods from seizure and the creditor will be liable for the enforcement officer’s fees to that point.
During the process of interpleader, the enforcement officer can continue action against the debtor and can seize other goods if necessary.