Herbert Berry Associates Ltd v Inland Revenue Commissioners; re Herbert Berry: HL 1977

References: [1977] 1 WLR 1437, [1977] 1 All ER 161, [1977] UKHL TC_52_113, [1980] AC 562, 53 TC 241, [1979] STC 735, [1979] TR 335
Links: Bailii
Coram: Lord Simon of Glaisdale, Lord Russell
Ratio: The principle to the effect that the court should exercise its discretion to restrain a distress levied by a landlord before the commencement of a winding-up only where there were special circumstances rendering it inequitable that he should be permitted to do so, applies also to a distress levied by the Crown under a statutory duty.
Lord Russell said: ‘Finally section 325 cannot avail the liquidator: . . It was suggested that distraint was a form of execution; but Parliament has quite clearly distinguished distress and execution: see section 228 of the 1948 Act’ and ‘So far as concerns section 325 I cannot conceive a more deliberate restriction to two only of methods of proceeding – I use the word in a non-technical sense – against the property of a company.’ S61 TMA 1970 and s319 CA 1948 could quite easily sit together. Section 61 imposes on the collector a statutory duty to distrain. Under section 319(7), a distraint (even if completed by sale) within 3 months of the winding-up order charges the distrained goods or their proceeds of sale with the preferential debts. Subject to that, and the discretion of the court to restrain completion of an uncompleted distress, the distrainor keeps the good distrained. Accordingly, in a voluntary winding-up, the distraint, even if incomplete, was permitted to disturb the pari passu distribution of preferential debts. The distrained assets are not assets of the company available for distribution within sections 302 or 319(5). There was a need for a lis to support an application for an asset freezing injunction. ‘The primary sense of action as a term of legal act is the invocation of the jurisdiction of the court by writ.’
Statutes: Companies Act 1948 325, Taxes Management Act 1970 61
Jurisdiction: England and Wales
This case cites:

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This case is cited by:

  • Cited – Fourie v Le Roux and Others ChD (Times 08-Oct-04)
    Interim asset freezing injunctions had been obtained on the application of a liquidator in South Africa. The defendant applied for their discharge.
    Held: They should be discharged. No foreign proceedings had been specified for which they were . .
  • Cited – Brenner v Revenue and Customs; In re Modern Jet Support Centre Ltd ChD (Bailii, [2005] EWHC 1611 (Ch), Times 19-Sep-05)
    The court was asked whether the process of distraint against goods for unpaid tax under section 61 of the 1970 Act is an ‘execution’ within section 183 of the 1986 Act which applies where a creditor has issued, but not completed, execution against . .

(This list may be incomplete)

Last Update: 16 July 2018
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