Gomba Holdings U.K. Ltd v Minories Finance Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE FOX,LORD JUSTICE STOCKER,LORD JUSTICE BUTLER-SLOSS
Judgment Date29 July 1988
Judgment citation (vLex)[1988] EWCA Civ J0729-1
Docket Number88/0644
Date29 July 1988

[1988] EWCA Civ J0729-1

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL. (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

MR JUSTICE HOFFMANN

Royal Courts of Justice

Before:

Lord Justice Fox

Lord Justice Stocker

and

Lord Justice Butler-Sloss

88/0644

CH. 1986 G. No. 1578

(1) Gomba Holdings UK Limited
(2) Gomba UK Group Limited
(3) The Duchess Theatre Company Limited
(4) The Garrlck Theatre Company Limited
(5) Gomba Exim Limited
(6) Routestone Limited
(7) Rathbone Hotel Limited
(8) Gomba Mansions Limited
(Plaintiffs/Appellants)
and
(1) Minories Finance Limited (Formerly Johnson Mathey Bankers Limited)
(2) Andrew Mark Homan
(3) Colin Graham Bird
(Defendants/Respondents)

MR TERENCE CULLEN, Q.C. and MR. A. TRACE (instructed by Messrs Holman Fenwick & Willan) appeared on behalf of the appellants.

MR ROBIN POTTS, Q.C. and MR R. ADKINS (instructed by Messrs Freshfields) appeared on behalf of the respondents.

LORD JUSTICE FOX
1

This is an appeal by the plaintiffs from a decision of Hoffmann J. upon a motion for the delivery up by the defendants of certain documents.

2

In 1985 the second and third defendants, Mr. Homan and Mr. Bird, who were accountants and partners in the firm of Price Waterhouse, were appointed by the first defendants, Minories Finance Ltd. ("MFL") as debenture holders to be receivers and managers of certain companies known as the Gomba Group ("the Companies") and which included the plaintiffs. The receiverships were discharged about the end of 1986 or early 1987.

3

By an order of 13th April 1987, the receivers were ordered by Hoffmann J. to deliver up to the plaintiffs or their solicitors within two months:

"all other documents of title books records accounts and other documentation of whatsoever description belonging to the plaintiffs and all other companies within the group of companies of which the plaintiffs form part in the possession of [the receivers]…"

4

In pursuance of that order the receivers delivered up some 268 files of documents belonging to the Companies. At the same time, Price Waterhouse on behalf of the receivers, by a letter of 12th June 1987 to the plaintiffs' solicitors, set forth various categories of documents relating to the affairs of the Companies which came into existence or were received by or on behalf of the receivers during the receivership but which the receivers declined to deliver up on the grounds that such documents were not the property of the Companies. By the present motion, the plaintiffs assert their ownership of these documents or some of them. Hoffmann J. dismissed the motion and the plaintiffs now appeal.

5

The plaintiffs' case is put forward on the basis of title; they claim ownership of the documents. Thus we are not concerned with any issue as to relevance (this is not a claim for discovery). And we are not concerned with the ownership of information.

6

The basis of the claim to ownership is that the receivers were, during the receivership, the agents of the Companies and were paid by the Companies. It is said that, as between principal and agent, all documents concerning the principal's affairs which have been prepared or received by the agent belong to the principal and have to be delivered up on the termination of the agency.

7

In general terms that is a correct statement of principle but it cannot be applied mechanically to the somewhat complex position of a receivership. The agency of a receiver is not an ordinary agency. It is primarily a device to protect the mortgagee or debenture holder. Thus, the receiver acts as agent for the mortgagor in that he has power to affect the mortgagor's position by acts which, though done for the benefit of the debenture holder, are treated as if they were the acts of the mortgagor. The relationship set up by the debenture, and the appointment of the receiver, however, is not simply between the mortgagor and the receiver. It is tripartite and involves the mortgagor, the receiver and the debenture holder. The receiver is appointed by the debenture holder, upon the happening of specified events, and becomes the mortgagor's agent whether the mortgagor likes it or not. And, as a matter of contract between the mortgagor and the debenture holder, the mortgagor will have to pay the receiver's fees. Further, the mortgagor cannot dismiss the receiver since that power is reserved to the debenture holder as another of the contractual terms of the loan. It is to be noted also that the mortgagor cannot instruct the receiver how to act in the conduct of the receivership.

8

All this is far removed from the ordinary principal and agent situation so far as the mortgagor and the receiver are concerned. Whilst the receiver is the agent of the mortgagor he is the appointee of the debenture holder and, in practical terms, has a close association with him. Moreover he owes fiduciary duties to the debenture holder who has a right, as against the receiver, to be put in possession of all the information concerning the receivership available to the receiver (see Re Magardi Soda Company Ltd. [1925] 41 T.L.R. 297.)

9

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. It is, therefore, not satisfactory to approach the problem of the ownership of documents which come into existence in the course of the receivership on the basis that ownership depends upon whether the documents relate to the affairs of (in this case) the Companies.

10

I agree with Hoffmann J. that the ownership of the documents in the tripartite situation of a receivership depends on whether the documents were brought into being in discharge of the receiver's duties to the mortgagor or the debenture holder or neither. The fact that a document relates to the mortgagor's affairs cannot be determinative. All sorts of documents may relate to the mortgagor's affairs but to which the mortgagor cannot possibly have any proprietory claim.

11

It is said that the judge's approach is unworkable because the receivers owed a duty both to MFL and the Companies. No doubt they did owe duties to both, but they were quite separate duties. The existence of the two duties does not entitle the court to ignore the fact that the ownership of documents created pursuant to one cannot determine the ownership of documents created pursuant to the other. It is also said that the receivers have a duty to maintain the records of the Companies. But that does not help one to decide what are the records of the Companies, i.e. whether a document belongs to the Companies or someone else.

12

The receivers in the present case plainly had a duty to manage the affairs of the Companies. All documents which were created or received in pursuance of that duty must be the property of the Companies. That would include, for example, the ordinary correspondence sent and received by the Companies in the conduct of their affairs.

13

On the other hand (and this is the second group) the receivers had to advise...

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    ...v. Waterford Regional Hospital (Unreported, Supreme Court, 21st February, 2001). Gomba Holdings Ltd v. Minories Finance Ltd.WLRUNK [1988] 1 W.L.R. 1231; [1989] 1 All E.R. 261. Hibernian Bank v. YourellIR [1916] 1 I.R. 312. Hibernian Bank v. Yourell (No.2)IR [1919] 1 I.R. 310. Howard v. Comm......
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    ...the duties owed by the receiver to the mortgagor: see Gomba Holdings v. Homan [1986] 1 WLR 1301 at 1305 B-D (Hoffmann J); [1988] 1 WLR 1231 at 1233 D-H (Fox LJ). The core duty of the receiver to account to the mortgagor subsists, but (for example) the mortgagor has no unrestricted right of......
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1 firm's commentaries
  • Harneys Corporate Recovery Services Guides to The Insolvency Act 2003 - Part 2
    • British Virgin Islands
    • Mondaq Virgin Islands
    • 4 August 2004
    ...Section 126(2) & (3) 212 Airlines Airspares Ltd v Handley Page Ltd [1970] Ch 193 213 Gomba Holdings UK Ltd. V Minories Finance Ltd [1988] 1 WLR 1231 at 1233-1234 214 Section 144 & Schedule 1 215 Schedule 1 216 Section 145 217 Section 124(1) 218 Sections 146 & 275 219 Section 130......
1 books & journal articles
  • RECEIVERSHIP, LIQUIDATION AND TORRENS LAND: MAPPING THE BOUNDARIES
    • Singapore
    • Singapore Academy of Law Journal Nbr. 1997, December 1997
    • 1 December 1997
    ...1 KB 806. 10 See Hoffman J in Gomba Holdings v Homan[1986] 1 WLR 1301 at 1305C; Fox LJ in Gomba Holdings Ltd v Minories Finance Ltd[1988] 1 WLR 1231 at 1233E. 11 See Jenkins LJ in Re B Johnson (Builders) Ltd, supra, note 7, at 661. See also Lawson (Inspector of Taxes) v Hosemaster Co Ltd[19......

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