40. Application to assignee or transferee

(1) This Schedule 1 applies as follows where an interest of the debtor's in goods is assigned or transferred while the property in the goods is bound for the purposes of an enforcement power, and the enforcement agent —
(a) knows that the assignee or transferee has an interest in the particular goods; or
(b) would know, if he made reasonable enquiries.
(2) These apply as if the assignee or transferee were a co-owner of the goods with the debtor —
(a) paragraph 21 (inventory);
(b) paragraph 23 (valuation);
(c) paragraph 26 (sale: supplementary);
(d) paragraph 38(6) (remedies after payment of amount outstanding).
(3) If the interest of the assignee or transferee was acquired in good faith, for valuable consideration and without notice, paragraph 31(6) applies as if "co-owner" included the assignee or transferee.
(4) If the interest of the assignee or transferee was not acquired in good faith, for valuable consideration and without notice, the enforcement agent must pay any surplus under paragraph 31(5) to the assignee or transferee and to the debtor (if he retains an interest).
(5) If the surplus is payable to two or more persons it must be paid in shares proportionate to their interests.
(6) Paragraph 5(3) and (4) ("good faith" and "notice") apply for the purposes of this paragraph.