Receivership in UK Law

I have set out the decision in Hughes at some length because it does in my opinion state clearly and correctly the somewhat opaque relationship between the general law of receivership and the detailed provisions of CJA 1988. The real issue in this appeal is not whether Hughes was rightly decided, but whether it is no longer good law as a result of the coming into force of CPR 69.7.

In my opinion CPR 69.7 has not had that far-reaching and surprising result. The function of CPR 69 is to set out a procedural code applicable to the generality of receiverships of all types. Its text gives no indication that its draftsman had particularly in mind the new species of receiverships in support of restraint orders and confiscation orders.

A receiver takes on heavy responsibilities when he accepts appointment, and he is entitled to the security of knowing that the terms of his appointment will not be changed retrospectively—even if an appellate court later decides that the receivership should have been terminated at an earlier date.

It is now settled that such a receiver, like a receiver at common law, is entitled to recover his remuneration, costs and expenses from the assets which he has been appointed to receive (“the receivership assets”). That is so whether or not he ought to have been appointed in the first place or the order appointing him has been discharged, see Mellor v Mellor [1992] 1 WLR 517.

In my judgment as Mr. Sumption submitted adoption in sections 19 and 44 can only connote some conduct by the administrator or receiver which amounts to an election to treat the continued contract of employment with the company as giving rise to a separate liability in the administration or receivership. In my judgment as Mr. Sumption submitted adoption in sections 19 and 44 can only connote some conduct by the administrator or receiver which amounts to an election to treat the continued contract of employment with the company as giving rise to a separate liability in the administration or receivership.

The result is that the receiver, in the course of the receivership, performs duties on behalf of the debenture holder as well as the mortgagor. And these duties may relate closely to the affairs of the entity which is the subject of the receivership.

[1900] 1 Ch 602. Moreover where a foreign court of the country where the assets are situate refuses to recognise the receiver appointed by the English court, the English court will, in an appropriate case, do what it can to render the appointment effective by orders in personam against persons who are subject to the jurisdiction of the English court; see the helpful decision of Neville J. in Re Huinac Copper Mines Ltd.