England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

		Royal Courts of Justice Strand. London. WC2A 2LL
		21/07/2005

Mr Justice Warren

Introduction

1. This case raises a short question of insolvency law of some general importance. It is whether the process of distraint against goods for unpaid tax under section 61 Taxes Management Act 1970 ("TMA 1970") is an "execution" within section 183 Insolvency Act 1986 ("IA 1986") which applies where a creditor has issued, but not completed, execution against the goods or land of a company which is subsequently wound up. The section prevents the creditor from retaining the benefit of execution unless the execution has been completed before the commencement of the winding-up. For this purpose, execution against goods is completed by seizure and sale or by the making of a charging order under section 1 Charging Orders Act 1979.

The facts

2. The facts are not in dispute and may be briefly stated.

a. As at 13 September 2004, Jet Support Centre Ltd ("MJSC") had liabilities to HM Revenue and Customs ("the Revenue") in respect of P AYE and NIC totalling £51,961.

b. On that date an officer of the Revenue (Kent Recovery Office) attended at MJSC's offices to distrain upon certain of its vehicles, machinery and equipment. MJSC entered into a "walking possession" agreement (the nature of which is succinctly described by Templeman J at first instance in In re Herbert Berry Associates Ltd [1976] 1 WLR 783). This enabled MJSC to retain use of the distrained assets whilst preserving the Revenue's rights as a result of having levied distress.

c. On 15 September 2004, notices convening meetings of shareholders and creditors of MJSC were issued and on 8 October 2004 MJSC went into creditors voluntary winding-up. The applicant, Mr Brenner, was appointed as liquidator.

d. According to MJSC's Statement of Affairs, there was, as at 8 October 2004, a deficiency as regards creditors of £2,428,196. None of the Revenue's debt has been paid.

The statutory provisions

A. TMA 1970

3. Section 61 TMA 1970 provides as follows:

a. Under subsection (1) "the collector may distrain upon the goods and chattels of the person charged (in this section referred to as "the person in default")". The quoted words were substituted in the subsection by Finance Act 1989.

b. Under subsections (2) and (3) provision is made for the breaking into any house or premises pursuant to a warrant issued by a justice of the peace, to be executed by or under the direction of the collector.

c. Under subsection (4), a distress levied by the collector shall be kept for five days following which, under subsection (5), the assets distrained are to be "appraised" and then sold by auction. The collector retains from the proceeds what is due plus various costs and charges, and accounts to the owner of the distrained assets for the balance.

IA 1986

4. Section 183 IA 1986 (whose predecessor was section 325 Companies Act 1948 ("CA 1948") and section 621 Companies Act 1985) is the provision which I have to construe. Subsection (1) provides as follows:

"(1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to it, and the company is subsequently wound up, he is not entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before the commencement of the winding up."

5. By subsection (2)(b), a person who purchases in good faith under a sale by the sheriff any goods of a company on which execution has been levied obtains a good title against the liquidator. By subsection (3)(a), execution is completed by seizure and sale or by the making of a charging order under the Charging Orders Act 1979. And by subsection (4) "the sheriff' includes "any officer charged with the execution of a writ or other process".
6. As well as section 183, there are several sections of lA 1986 which need to be referred to, together with their statutory predecessors where appropriate.
7. Section 107 IA 1986 (whose predecessor was section 302 CA 1948) is the provision which deals with the distribution of a company's property where it is in voluntary winding-up (whether members' or creditors').

"Subject to the provisions of this Act as to preferential payments, the company's property in a voluntary winding-up shall on the winding-up be applied in satisfaction of the company's assets pari passu ..... "

8. Section 126 IA 1986 (whose predecessor was section 226 CA 1948) is a provision which applies where a petition has been presented for the winding-up of a company before a winding-up order has been made. It permits the company or any creditor or contributory to apply for a stay in the case of an action or proceedings in the High Court or the Court of Appeal or to apply to restrain further proceedings in any other action or proceeding against the company.
9. Section 128 IA 1986 (whose predecessor was section 228 CA 1948) applies where a company is being wound up by the court. It renders void "any attachment, sequestration, distress or execution put in force" after the commencement of the winding-up.
10. Section 130 IA 1986 (whose predecessor was section 213 CA 1948) provides by subsection (2) that, once a winding-up order has been made, "no action or proceeding shall be proceeded with or commenced against the company or its property" except with the leave of the court.
11. Section 175 IA 1986 (whose predecessor was section 319(5) CA 1948 and sections 89(1), (2) Insolvency Act 1985) is concerned with preferential debts and provides for such debts to be paid in priority to other debts.
12. Section 176 IA 1986 (whose predecessor was section 319(7) CA 1948 and section 89(3), (4) Insolvency Act 1985) applies only where the company is being wound up by the court and is expressed to be without prejudice to section 128 IA 1986. It applies where any person (whether or not a landlord) has distrained upon the goods or effects of a company in the period of 3 months ending with the date of the winding-up order (in contrast with the commencement of the winding-up), and gives the company a charge over the distrained assets for the preferential debts to the extent of any deficiency in the company's property available for meeting those debts.
13. Section 434 IA 1986 (whose predecessor was section 234 Insolvency Act 1985 and had no corresponding predecessor under CA 1948) expressly provides "for the avoidance of doubt" that provisions of IA 1986 which derive from the Insolvency Act 1985 (ie including sections 175 and 176 IA 1986) bind the Crown so far as concerns, among other matters, remedies against, or against the property of companies and priorities of debts.

Distress/distraint and execution

14. None of "distrain", "distress" or "execution" is defined in IA 1986 (nor were they defined in CA 1948).
15. The general legal meaning of distress or distraint is uncontroversial: it is described in Halsbury's Laws of England Voll3 (4th ed Reissue) at para 60 I:

"The term "distress" primarily connotes a summary remedy by which a person is entitled without legal process to take into his possession the personal chattels of another person, to be held as a pledge to compel the performance of a duty, or the satisfaction of a debt or demand. By almost universal sanction the term "distress" is now used to designate both the process of taking, and the chattels taken, though originally it applied only to the taking. By statute, remedies referred to as "distress" have been introduced for the recovery of rates and taxes and for the enforcement of certain fines imposed by or orders of magistrates' courts ..... "

16. The ordinary meaning of "execution" is more open to question. No doubt the word, as used in IA 1986, takes its meaning from the context of the Act as a whole. It is, nonetheless, helpful to see what meanings it had taken in other contexts. In re Overseas Aviation Engineering(GB) Ltd [1963] I Ch 24, it was held by the majority that a charging order on land under section 35(1) Administration of Justice Act 1956 obtained to enforce a judgment debt was a form of "execution" for the purposes of section 325 CA 1948. At P 39 Lord Denning MR says this:

"The word "execution" is not defined in the Act. It is, of course, a word familiar to lawyers. "Execution" means, quite simply, the process for enforcing or giving effect to the judgment of the court: and it is "completed" when the judgment creditor gets the money or other thing awarded to him by the judgment. That this is the meaning is seen by reference to that valuable old book Rastill Termes de la Ley, where it is stated: "Execution is, where Judgment is given in any Action, that the plaintiff shall recover the land, debt, or damages, as the case is; and when any Writ is awarded to put him in Possession, or to do any other thing whereby the plaintiff should the better be satisfied his debt or damages, that is called a writ of execution; and when he heath the possession of the land, or is paid the debt or damages, or heath the body of the defendant awarded to prison, then he heath execution." And the same meaning is to be found in Blackman v. Fysh,[1892] 3 Ch 209,217 (C.A.) when Kekewich J. said that execution means the "process of law for the enforcement of a judgment creditor's right and in order to give effect to that right." In cases when execution was had by means of a common law writ, such as fieri facias or elegit, it was legal execution: when it was had by means of an equitable remedy, such as the appointment of a receiver, then it was equitable execution. But in either case it was "execution" because it was the process for enforcing or giving effect to the judgment of the court."

Similarly, at p 46 Harman LJ says:

"Now what is execution but the enforcement of a judgment or order? In my judgement, the new remedy given by section 35 is merely an alternative method of execution against the debtor's land, replacing the old writ".

17. These statements are an indication of the ordinary meaning of "execution". But it must be remembered that the case was one where a judgment debt had already been obtained and are not to be taken as an indication that "execution" can never properly be used to describe an extra-judicial process for recovering a debt.
18. Potts v Hickman [1941] AC 212 is relied on by Miss Shekerdemian. That case established that the levying of a distress for poor rates under a justice's warrant was not an "execution" within section 1 Landlord and Tenant Act 1709 (called in this case "the Act of Anne"). The Plaintiff was the landlord of certain premises and had as at 29 September 1938, a right to distrain for unpaid rent in the sum of £15 l1s. However, on 20 September, the defendant, as bailiff for Wolverhampton Corporation, had levied on the tenant under a warrant for distress for rates granted by a justice of the peace for the borough on 11 August pursuant to Distress for Rates Act 1849. The issue was whether the distress was an execution within section 1 of the 1709 Act. The section referred to "the party at whose suit the execution is sued out" and to a process to be executed by "the sheriff or other officer" resulting in payment "to the plaintiff'. The wording led to the conclusion that, in this context, "execution" referred to the process of enforcing a judgment obtained inter partes. Although the distress warrant was stated to be "in the nature of an execution" it was not a process to enforce payment of a debt ascertained by a previous judgment (see Viscount Simon LC at p 223). But the possibility of a wider meaning of "execution" was addressed by Viscount Simon at p 219:

"The House has been much assisted by the learning and research of counsel on both sides, and we further have the advantage of the full and carefully reasoned judgment of Goddard L.J. delivered on behalf of the Court of Appeal. [see at [1940] 1 KB 38.D] If the test which would determine the present controversy were completely stated by asking whether the lawyers of 1709 would have regarded the levying of a distress of rates as an execution, there would indeed be a great deal to be said for the learned Lord Justice's conclusion. Ten years before the Act of Anne was passed, Holt C.J. in the deer-stealing case Rex v. Speed had said that "when a statute says money 'shall be levied by distress,' that is an execution." In Hutchins v. Chambers, where the question was whether beasts of the plough were privileged from distress for poor rates and it was decided that they were not, Lord Mansfield quotes with approval the following passage from 3 Salkeld, p. 136: "This common-law exemption of utensils, tools, instruments of husbandry etc. from distress holds only in distress for rent arrear, amerciaments etc., but doth not extend to cases where a distress is given in the nature of an execution by any particular statute; as for poor rates." "Therefore", adds Lord Mansfield, "it is more analogous to an execution than to a distress at common law, and there (in cases of execution) averia carucae may be distrained; although there be other sufficient distress."

At the end of the eighteenth century yet another Chief Justice affirmed the analogy. In Rex v. Benn and Church (3), Lord Kenyon said that a warrant of distress for poor rates was "in the nature of an execution. ""

19. In Speed's case (decided in 1796 reported at 12 Mod 328) it was said, as Viscount Simon quotes, that "when a statute says money 'shall be levied by distress', that is an execution." But the statute against deer stealing under consideration in that case "apparently provided for a year's imprisonment in case of failure of distress to the value of thirty pounds. Even apart from the clear statement of the Chief Justice, it must be obvious that the levying of a penalty imposed by a court of criminal jurisdiction is a form of execution": see Lord Goddard at [1940] 1 KB 29, 42. I doubt that this sentence from Speed's case can be divorced from its context and used to support an argument that something entirely unconnected with the courts can be an execution.
20. In Hutchins v Chambers (1758) 1 Burr 579, distress under the Poor Relief Act 1601 and other like Acts was described as only partly analogous to common law distress but as much more analogous to common execution; such distress was described as in the nature of an execution (see the citation from Viscount Simons set out above). But even this case did not say that distress of this sort actually was a form of execution as that word was generally understood at the time.
21. What I conclude from those cases is that ordinarily the word "execution" is used to describe a process of enforcement of a judgment inter partes. I do not dismiss the possibility that it could, in it context, have a wider meaning; but the context would need to be such as to require that meaning. The question in the present case is whether it has a wider meaning in the context of section 183 IA 1986.

Approach to construction of IA 1986 and application of previous law

22. In his submissions on behalf of the Revenue, Mr Gibbon relies on the decision of the House of Lords in Herbert Berry Associates Ltd v IRC [1977] 1 All ER 161, a case which related to the provisions of CA 1948 and to which I will return to in a moment. Since IA 1986 is an entirely new self-contained code, decisions under previous legislation must be treated with some care. That is not to say that they must be disregarded in construing IA 1986. The matter was dealt with by Hoffmann J in In re a Debtor (No 784 of 1991) [1992] Ch 544 at 558-9 (cited with approval by Ferris J in Woodland-Ferrari v UCL Group Retirement Benefits Scheme [2003] Ch 115 at paragraph 40):

"Those authorities show that, in approaching the language of the 1986 Act, one must pay particular attention to the purposes and policies of its own provisions and be wary of simply carrying over uncritically meanings which had been given to similar words in the earlier Act. It does not, however, mean that the language of the new Act comes to one entirely free of any of the intellectual freight which was carried by words and phrases in earlier bankruptcy or other legislation. Decisions of the court upon the meanings of phrases used in Acts of Parliament may come, in the course of time, to give them the quality of terms of art which Parliament may well be assumed to have intended them to bring with them when used in subsequent legislation. In section 265, for example, terms such as 'domiciled', 'personally present', 'ordinarily resident', have had attributed to them, both in the context of bankruptcy and in that of civil procedure generally, a wealth of refined construction which it is difficult to suppose Parliament did not intend equally to apply when those words were used in the 1986 Act. Is there any reason why that should not apply equally to the words 'has carried on business'? There does not seem to me to be anything in the policy of the new Act which suggests that in this provision Parliament was intending to give those words a different meaning from those which they had been held to bear under the 1914 Act."

23. Herbert Berry Associates Ltd was heard at first instance by Templeman J: see [1976] 3 All ER 207. The collector of taxes distrained on the goods of the company under section 61 TMA 1970 for unpaid taxes of about £9,500 and the company entered into a walking possession agreement. Before the collector had sold the goods, and completed the distress, the company entered into voluntary winding-up and a liquidator was appointed. The statement of affairs showed a deficiency of £91,000. There were preferential creditors of £31,000 and assets of £25,000 including the distrained goods. The goods were later sold with the consent of the collector for £10,500. The collector claimed payment in full of the unpaid tax from the proceeds of sale of the goods. The liquidator contended that the Crown could not assert its right to distrain in order to be paid in full, but by section 319(5) CA 1948 (which concerned preferential payments: the Crown's claim for unpaid tax was, at that time, a preferential debt) was only entitled to rank pari passu with other preferential creditors.
24. One argument of the liquidator was that, since the Crown was distraining for a preferential debt, it was bound by section 319(5) which provided for pari passu distribution among preferential creditors. Following Re Roundwood Colliery Co [1897] 1 Ch 371, a case concerning distress by a landlord, Templeman J held that the collector was entitled to distrain by taking possession prior to the date of the winding-up and then to complete it unless there were special reasons rendering it inequitable for him to do so; and he held that no distinction was to be drawn in this context between distraint by a landlord and distraint by the collector. He held that the effect of section 319(5) ranking preferential debts pari passu was not a special circumstance which rendered it inequitable for the distress to be completed. In effect, he rejected the proposition that the completion of the distress would be incompatible with the apparently mandatory provisions of CA 1948. A similar argument to that would have been available in Re Herbert Berry Associates Ltd by reference to section 302 CA 1948, but does not appear to have been run, although the section was mentioned. If it had been, Templeman J would surely have rejected it, section 302 no more giving rise to a special circumstance than section 319(5).
25. An argument was also addressed to Templeman J on the meaning of "execution" in section 325(1) CA 1948, the predecessor to section 183(1) IA 1986 (the wording of the two section being almost identical). It was submitted, on the basis of MacGregor v Clamp & Son [1914] 1 KB 288 at 291, that a distress for taxes was "really by way of execution". Templeman J rejected the proposition that distress was a form of execution within section 325(1). He stated that CA 1948 distinguishes between distress, whether by a landlord or the Crown, and execution. Thus section 228 (now section 128 IA 1986) refers to the four remedies of attachment, sequestration, distress and execution. Section 371(7) (now section 176 IA 1986) deals with distress by landlords or other person and section 325 (now section 183 IA 1986) deals with execution or attachment. Templeman said

"In my judgment, it is not possible to extract distress by the Crown from distress in general in section 319 and include it somehow or other in section 325, which is not dealing with distress."

Miss Shekerdemian says that I should not place any reliance on that because Templeman J did not consider the scheme of CA 1948 as a whole in his judgment. But as I have pointed out, he did note section 302 (albeit in the context of an argument about Crown prerogative) and I have already expressed my view on what he would have done in paragraph 16 above.

26. Finally, Templeman J addressed an argument that the collector had abandoned or prejudiced his right of distress by accepting the walking possession agreement. In rejecting that argument, he made the following, perfectly general, statement which, if it is correct, is of importance in the present case:

"In my judgment, the property of a company, which is directed by section 302 [now section 107 IA 1986] to be applied for the benefit of the creditors subject to preferential payments, is the property subject to such rights as were exercised prior to the date of the winding-up. At the date of the winding-up in the present case, the goods were in the possession of the collector, and he had power to sell them in order to discharge unpaid taxes. The property of the company at the date of the winding-up consisted only of its right to any surplus realised on that sale."

I add, in relation to that approach, that, where an asset of a company is subject to a fixed charge, the property of the company available for distribution takes account of the fixed charge. It is consistent with that treatment to deal with a distress levied (but not completed by sale) in the same way given that distress, prior to sale, is in effect a pledge as security for the debt: see [15] above.

27. The Court of Appeal affirmed Templeman J's decision but without addressing the arguments mentioned in 17 and 18 above. An appeal to the House of Lords ([ 1977] 1 All ER 161) was dismissed. It held that 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 to a distress levied by the Crown under a statutory duty. Quite clearly, their Lordships did not consider, any more that did Templeman J, that the provisions of section 319(5) was such a special circumstance.
28. Section 325 CA 1948 is mentioned by Lord Russell although the extent to which argument was addressed to the House on it is not clear. He says this at p 171c-d:

"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 [now section 178 IA 1986]"

And then at p 172, after considering submissions that section 319 CA 1948 contained a lacuna, he said this:

"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."

29. Miss Shekerdemian and Mr Gibbon both agree that what Lord Russell said about section 325 CA 1948 was, strictly, obiter, I think on the basis that the point was not run in the Court of Appeal and does not appear to have formed part of the liquidator's formal Case in the House of Lords. Even if that is so, the words of Lord Russell (with whom I think Lord Scarman is to be taken as agreeing in all respects) carry the greatest weight. Further, it was part of Templeman J's decision that "execution" in section 325 CA 1948 did not include distress. I respectfully agree with their conclusions. Insofar as the position under CA 1948 is relevant to the construction of section 183 IA 1986, that is the starting point.
30. Although IA 1986 creates a new code in relation to some aspects of company insolvency, it is clear that many of the concepts it uses, and some of its provisions, are carried over from CA 1948. In particular, sections 228, 319(5), 319(7) and 325 CA 1948 are carried over into sections 128, 175, 176 and 183 IA 1986 respectively. Those sections of CA 1948 are precisely the ones relied on in Herbert Berry Associates Ltd in reaching the conclusion that "execution" did not include distress.
31. Accordingly, following Ferris J's approach, I ask myself whether there is anything in the policy of IA 1986 which suggests that, in section 183, Parliament was intending to give the word "execution" a different meaning from that which it had for the purposes of section 325 CA 1948. If there is no difference in policy, then I consider that I ought to interpret section 183 IA 1986 in the same way as section 325 CA 1948 unless, in the context of IA 1986 as whole, it is clear that the word "execution" should be given a different meaning.
32. Miss Shekerdemian submits that "execution" in section 183 IA includes distress. Her submission is not limited to distress pursuant to a statutory right (eg as in the present case, the right to distrain under section 61 TMA 1970) but includes any common law right to distrain, such as the right of a landlord to distrain for rent. She does not seek to argue that the two different types of distress are to be dealt with differently by IA 1986, although she has arguments directed particularly at the statutory right. I think that she is right not to draw such a distinction. It seems to me clear that, where IA 1986 talks about distress or distraining, for instance in sections 128 and 176, both common law distress and the statutory right labelled distress are covered. In theory, one sort of distress could be an execution and the other could not be: but I do not consider that the language of IA 1986 would justify such a conclusion.
33. One general policy of IA 1986, so far as relevant to the question at issue, can be said provide for the application of the assets of a company in voluntary winding pari passu among creditors subject to the express provisions concerning preferential payments, a policy which can be seen reflected in section 107 IA 1986. I think that the same could be said about the policy of CA 1948 by reference to section 302 of that Act. But for reasons already given, distress was not an execution within section 325 notwithstanding that general policy.
34. Miss Shekerdemian nonetheless says that to give section 183 a purposive construction (ie one which gives effect to the policy identified), "execution" needs to be construed as widely as possible. If distress is to be excluded from the definition, then where as execution in the narrow sense would be prevented by section 183(1), entirely consistently with the pari passu principle, distress could nonetheless proceed. There is, she says, no logical basis for this distinction to be drawn. There is no reason why two methods of recovery which are similar in the way they operate should produce such different results. I would be able to see the force of that point if section 128 had included the word "other" in front of "execution", thus demonstrating that the draftsman considered distress to be a form of execution. The question is not, however, one of logic; rather it is one of consistency of approach. The draftsman has quite clearly provided different consequences in the case of a voluntary winding-up from those in a compulsory winding up (eg section 176 IA 1986) and those differences may be said to be at least as showing as inconsistent approach as that which Miss Shekerdemian urges on me. For my part, I do not see any real inconsistency of approach: it is simply that the draftsman, and Parliament, regard recovery of debts by judgment and execution in a different way from recovery by distress (whether at common law or under statute).
35. Miss Shekerdemian also says that section 434 shows that the Crown is intended to be fixed with the priorities laid out in section s 107 and 175 IA 1986, section 434 going beyond a general provision saying that the Act binds the Crown by identifying certain provisions. However, I observe that the section is expressed to be for the avoidance of doubt, the obvious understanding of the draftsman being that that those sections would have bound the Crown in any event. Perhaps the section is, in any event, principally directed at confirming that the prerogative is not available (as shown by Herbert Berry Associates Ltd). The point made is that section 175 (and I think the same point can be made in relation to section 107 now that Crown debts for tax are not preferential debts) tells us to adopt a pari passu distribution of preferential debts in preference to ordinary debts; but if distraint under section 61 TMA 1970 can be completed after the commencement of the winding-up where there are preferential claims, that will upset the statutory scheme of priorities in section 175.
36. In Herbert Berry Associates, Lord Simon was of the view that section 61 TMA 1970 and section 319 CA 1948 could quite easily sit together. Section 61 imposes on the collector a statutory duty to distrain [since 1989 this has been a discretion]. 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. In other words, he is saying that the distrained assets are not assets of the company available for distribution within sections 302 or 319(5) which is what Templeman J said expressly in the passage cited at [25] above.
37. I respectfully agree with what he says and for similar reason, I see no inconsistency between section 61 TMA 1970 and the provisions of IA 1986. Accordingly, I reject the argument based on section 434 IA 1986.
38. It follows from this analysis that, in answer to the question I posed in [31] above, I do not consider that there anything in the policy of IA 1986 which suggests that, in section 183, Parliament was intending to give the word "execution" a different meaning from that which it had for the purposes of section 325 CA 1948, or indeed, its ordinary meaning as set out in [21] above. Nor is there anything else in the context of IA 1986 as whole, which leads me to give it a different meaning.
39. I note that the Reports of the Review Committee on Insolvency Law and Practice ("the Cork Report") of June 1982 considered the result of Herbert Berry Associates Ltd to be anomalous. They said this at paragraph 1470:

"We can see no good reason why the Crown, like any other creditor, should not be bound for all purposes by insolvency proceedings, whether voluntary or compulsory. We accordingly recommend that express provision to this effect should be contained in any future insolvency code, and that any other relevant legislation, such as the Taxes Management Act, 1970, should be amended to remove all anomalies from this branch of the law."

40. That recommendation was not followed. Parliament had every opportunity to alter the position as it stood at the date of the Cork Report. That it did not do so, and that in IA 1986 it used wording materially identical to the pre-existing provisions, suggests that no change in the law was intended by IA 1986 in that respect.
41. There is one other point I would mention. It will be remembered that, in the House of Lords in Herbert Berry Associates, Lord Simon dealt (at p 168) with one aspect of the argument based on statutory incompatibility. The provisions before him were section 325 CA 1948 and section 61 TMA 1070. If there was anything in the repugnancy argument, he pointed out that it was the provisions of CA 1948 which would yield to those of TMA 1970, the latter being later in time.
42. So, in the present case, it is argued that the provisions of TMA 1970 should yield to those of IA 1986. One problem with that is that the wording of section 61 (1) has in turn been amended by Finance Act 1989. It would be question of some difficulty whether that amendment resulted in the right to distrain again taking precedence. In the light of my conclusion that there is in fact no inconsistency between IA 1986 and section 61 TMA 1970, I propose to say nothing more about this aspect.

Conclusion

43. There is no repugnancy between the provisions of section 61 TMA 1970 and the provisions of IA 1986 which I have considered, in particular sections 107 and 175. The word "execution" in section 183 IA 1986 does not include a distress under section 61 TMA 1970.