Herbert Berry Associates Ltd v Inland Revenue Commissioners; re Herbert BerrySP, Regina (on The Application of) v The Lord Chancellor: HL 1977

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.’


Lord Simon of Glaisdale, Lord Russell


[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, 121 SJ 829




Companies Act 1948 325, Taxes Management Act 1970 61


England and Wales


At ChDHerbert Berry Associates Ltd v Inland Revenue Commissioners ChD 1976
The collector of taxes distrained on the goods of the company under section 61 TMA 1970 for unpaid taxes and the company entered into a walking possession agreement. Before the collector had sold the goods, and completed the distress, the company . .
At CAHerbert Berry Associates Ltd v Inland Revenue Commissioners CA 2-Jan-1976
The word ‘proceedings’ meant the ‘invocation of the jurisdiction of a court by process other than writ’. . .

Cited by:

CitedFourie v Le Roux and Others ChD 30-Sep-2004
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 . .
CitedBrenner v Revenue and Customs; In re Modern Jet Support Centre Ltd ChD 21-Jul-2005
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 . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Insolvency, Landlord and Tenant, Taxes Management

Updated: 21 June 2022; Ref: scu.216341