PROPERTY SALE BY RECEIVERS BELL V LONG AND OTHERS [2008] EWHC 1273 (CH) (CHANCERY DIVISION, MANCHESTER DISTRICT REGISTRY) (PATTEN J) (16JUNE 2008) Whether administrative receivers had failed to fulfil their duty to obtain the best price reasonably obtainable for 9 portfolio of properties. BACKGROUND "riic claimant, Mt Bell, was a director and majority shareholder of Dimple Property Limited (the 'Company'). The Company owned four properties. Subsequently, Mr l-ong and Mr Thompson (the first and second defendants) of Pannell Kerr Fotsrcr {the third defendant) were appointed as the administrative receivers of the Company by HSBC Bank under a fixed and floating charge over the Company's assets. Wealheralls {the fourth defendant) were appointed as selling agents of the properties, Mr Bell alleged that the sale price achieved for the properties was significantly lower than their market value at the time of sale. CONCLUSION A receivet appointed by a mortgagee to sell mortgaged property in order to tecover a mortgage debt is effectively in the same position as the mortgagee and owes a duty in equity to all rhose interested in the equity of redemption to obtain a proper price for the property. A receiver is not a trustee of his power of sale for the mortgagor and accordingly a receiver tan chose the time of sale even if that turns out to be disadvantageous to the debtor who could have recovered more had the property been sold later. The authorities draw no distinction for these purposes between a Law of Property Act receiver and an administrative receiver. The mortgagee has an unfettered discretion to sell a property when July/August 2008 he likes to achieve the repayment of the debt which he is owed. Tlie mortgagee's decision is not constrained by whether the exercise or non-exerciseof^the power will occasion loss or damage to the mortgagor. It does nor matter that the time maybe unpropicious and that by waiting a liigher price could be obtained; a mortgagee is not bound to postpone in the hopeofobtaininga better price. There must be a degree of latitude given to mortgagees and receivers alike as to the timing of any sale and the method of sale to be employed. Weathcralls initially pursued individual sales of the four properties. The eventual buyer of the portfolio offered a sum which was attractive at a time when a number of factors had emerged which indicMed a lower than expected price could be achieved. Mr Bell could not demonstrate that no competent valuer standing in Weatheralls' shoes at the time with the information which it had could reasonably have given the advice they did. The strategy of a portfolio sale was acceptable in the circumstances as it pioduced a guaranteed disposal of the properties and a finite liability for costs and fiature interest. The receivers were not bound to wait for an indefinite period in the hope of obtaining a higher return when tliey had a competitive bid for all the properties in excess of jny individual oilers. Jonathan Lawrence K^L Gutes ionathan.laK'reiiie<^klgales.com WW w.klgates. com Butterworths Journal of International Banking and Financial Law