Receiver – Partnership Action – Consent Order appointing Receiver and Manager
– Payments by Receiver – Insufficiency of Assets – Indemnity – Claim
against Partners personally.
In an action for dissolution of partnership a receiver and manager was, by a consent order, appointed to carry on the partnership business with a view to its sale as a going concern. In carrying on the business the receiver and manager made payments which the assets were insufficient to satisfy in full and claimed to be indemnified by the partners personally in respect of the balance due to him.
Held: that the receiver was an officer of the Court and could only look to the assets under the control of the Court for his indemnity.
Held: therefore, that he was not entitled to be indemnified by the partners personally, and that the fact that the order appointing him was made by consent of the partners did not put him in any better position as against them
Warrington J said: ‘Such a receiver and manager [that is one appointed by the court] is not the agent of the parties, he is not a trustee for them, and they cannot control him. He may, as far as they are concerned, incur expenses or liabilities without their having a say in the matter. I think it is of the utmost importance that receivers and managers in this position should know that they must look for their indemnity to the assets which are under the control of the court. The court itself cannot indemnify receivers, but it can, and will, do so out of the assets, so far as they extend, for expenses properly incurred; but it cannot go further. It would be an extreme hardship in most cases to parties to an action if they were to be held personally liable for expenses incurred by receivers and managers over which they have no control. But the receiver here says that this is not the ordinary case, because the judgment appointing him was by consent and, by consenting, all the parties have impliedly requested him to incur these liabilities. In my opinion that fact makes no difference at all. If I were to accede to that argument, I should have to hold in every case that the person who puts the court in motion and gets a receiver appointed would have to indemnify the receiver. The fact that the order was made by consent does not, in my opinion, distinguish this case from the numerous cases in which orders have been made without consent.’
Warrington J
[1911] 1 Ch 155, [1910] UKLawRpCh 134
Commonlii
England and Wales
Cited by:
Cited – In Re Andrews CA 25-Feb-1999
The defendant and his son had been charged with offences relating to their joint business, and restraint orders were made. The son was convicted, but the defendant was acquitted and awarded his costs out of central funds. The taxing officer held . .
Cited – Evans v Clayhope Properties Ltd ChD 1987
Vinelott J doubted whether a receiver’s remuneration could be recovered as litigation costs . .
Cited – Evans v Clayhope Properties Ltd CA 1988
Nourse LJ doubted whether a receiver’s remuneration could be recovered as litigation costs. . .
Cited – Capewell v Revenue and Customs and Another HL 31-Jan-2007
The defendant appealed against an order regarding the remuneration of a receiver appointed to administer a restraint order placed on the assets of the defendant under the 1988 Act on the basis of an allegation that the defendant had been involved in . .
Lists of cited by and citing cases may be incomplete.
Updated: 20 August 2021; Ref: scu.231652
