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A case study in receivership practice: Devon Commercial Property Limited v Robert Adrian Barnett, Robert John Blecher

  • United Kingdom
  • Banking and finance

13-06-2019

Key Points

• The self-dealing rule does not extend to a sale by a receiver to a party in which the mortgagee has an interest.

• Although the duties of a receiver and a mortgagee are similar as to the Property, a receiver, unlike a mortgagee, cannot remain passive if to do so would harm the interests of the mortgagor/mortgagee.

• By virtue of the office a receiver will often face a conflict between the interests of the mortgagor and the interests of the mortgagee, accordingly there is no duty on the receiver to avoid such conflict.

• While receivers need to remain independent, it is accepted that the receiver will maintain a close correspondence with the mortgagor and may justifiably instruct the mortgagee’s solicitor to act on his/her behalf.

• Careful consideration should be given as to whether expert evidence is required to reasonably resolve proceedings. If it is determined that expert evidence is required, the expert should be chosen carefully so as to give a relevant opinion which can assist the court and should be directed to address specific questions which arise out of differences in the parties’ pleadings.

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