The Tribunals, Courts and Enforcement Act 2007 (TCE) specifies that the sale of controlled goods must be by public auction unless the court orders otherwise.
The best price
The purpose of the sale is to obtain the best price possible so that the judgment debt, court fees, enforcement fee and judgment interest can be paid in full (any surplus will be returned to the debtor). Public auctions are normally the most effective method of achieving a good price.
For the sale of specialist items, these are normally placed in specialist sales by auction houses who can attract the target buyers.
However, sometimes the item is of such a specialist nature that a public auction is not the most appropriate method of sale. Under paragraph 41(2) of Schedule 12 of TCE 2007, there is provision for the High Court Enforcement Officer (HCEO) to apply to the court to sell the goods by another method.
This would most commonly be by:
- Private contract
- Sealed bids
When making the application, the enforcement agent must state whether he has reason to believe that an enforcement power has become exercisable by another creditor against the debtor or a co-owner. If he does believe that may be the case, the court may not consider the application until notice has been given to the other creditor, or the court is satisfied that the enforcement power is not exercisable by the other creditor.
Seven days’ notice of the sale must still be given to the debtor and any co-owner.
When is private contract the best method?
Private contract, also known as private treaty, is the best method where it is likely to attract a buyer who is prepared to pay a higher price than could be obtained were the goods to be sold at public auction.
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance