Davd Asker TSO Airplane Seizure Court Case Summary
Posted on 30th August 2017 at 13:11
Midtown Acquisitions LP v Essar Global Fund Ltd
Queen's Bench Division (Commercial Court)
30 August 2017
Summary: A warrant of entry granted under the Tribunals, Courts and Enforcement Act
2007 allowing an enforcement agent to take control of an aircraft pursuant to a writ of control was
not valid as it had specified the incorrect premises where the aircraft was stationed. However, it
had not been wrong in principle to issue the warrant despite a mortgage over the aircraft meaning
that any proceeds of sale would be taken by a bank: in the absence of control the aircraft was
likely to leave the jurisdiction.
Abstract: The court was required to determine whether an enforcement officer, acting on the
claimant's behalf, could and had lawfully taken control of an aircraft.
The claimant had been granted judgment against the first defendant which it sought to enforce
against a Boeing 747 which had recently been fitted out as a private jet and was worth US $60
million. A bank had a mortgage over the aircraft, securing it for US $101 million. The aircraft was
legally owned by the third defendant. The third defendant was owned by the second defendant, which was in turn owned by the first defendant. The claimant's case was that the third defendant held the aircraft on trust for the first defendant.
The claimant believed that the aircraft was stationed at an airfield near Bolton and began
enforcement proceedings, believing that the aircraft was due to take off the next day for Portugal.
It obtained a writ of control pursuant to CPR Pt 83. A High Court enforcement officer, the third
party, obtained a warrant of entry pursuant to the Tribunals, Courts and Enforcement Act 2007
Sch.12 Pt 2 para.15.
On the way to Bolton, he learnt that the aircraft was actually stationed at Stansted. He obtained
access to the aircraft at Stansted despite the warrant being for premises in Bolton. His case was
that he had been given a licence to enter by staff and that he had then taken control of the
aircraft. The following day he obtained a second warrant of entry which specified the correct
The issues were whether the enforcement officer could, and had, lawfully taken control of the
The claimant submitted that the enforcement officer had power to take control of the aircraft as
staff had given him a licence to enter.
The first defendant submitted that the warrant of entry was not valid as it had specified the wrong
premises. It further submitted that it had been futile and wrong in principle to issue a warrant
under sch.12 para.15, as all the proceeds of sale of the aircraft would be taken by the bank, and
an asset in which there was no equity in redemption was not suitable for execution.
Held: Judgment accordingly.
(1) The power conferred by a writ of control was exercisable only by using the procedure in sch.12. Under sch.12 para.9 an enforcement officer could only take control of goods if they were on premises that he had power to enter.
Under para.15, power to enter under a warrant would be granted provided that an enforcement power had become exercisable, there was reason to believe that there were goods on the premises over which the enforcement power would be exercisable to take control, and it was reasonable in all the circumstances to issue the warrant. In the instant case, the warrant had not specified Stanstead as the location. The officer did not have power to enter under sch.12. It was true that factual situations varied and an aircraft was uniquely mobile.
However, observing the rules was of utmost importance. The officer could not properly rely on the writ of control where there was no warrant of entry entitling such access. Indeed, the following day the officer obtained an entry warrant for the correct location; the court inferred that he had obtained it because he knew that it was required. If, contrary to that finding, the officer had had power to enter, the question was whether he had taken control of the aircraft. The form signed by the officer had not stated that he had taken control; that was unlikely to be an oversight.
Further, the evidence was that the reason he had subsequently applied for a further warrant was in order to take control of the aircraft. That was inconsistent with the claimant's case that control had already been taken. The enforcement officer had not had lawful authority to take control of the aircraft simply under the writ of control.
(2) The aircraft had been valued at around US $60 million. The defendants' obligations to the bank exceeded the value of the aircraft by a very significant margin. Execution would therefore mean that any proceeds of sale would be paid to the bank. Enforcement should not be used to put pressure on a debtor to pay. However, it was not correct to see control as necessarily leading to a sale, as taking control of goods might enhance a claimant's position.
Generally, a creditor would not go to the extent of enforcement where there was no equity in the asset. However, in the instant case, it was not unreasonable to take control of the aircraft; in the absence of such control the evidence was that the aircraft would likely leave the jurisdiction.
Judge: Blair J
Counsel: For the claimant: Neil Block QC. For the defendant: John Odgers QC. For the third party: Shahram Sharghy.
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