This is a chapter from the practical text from Bloomsbury Professional, The Law & Practice of Receivership in Scotland, 3rd Edition, which is written by leading practitioners in the field of insolvency, who combine academic research with great practical knowledge, giving the reader clear guidance on problems likely to arise in practice. The third edition of this highly regarded practitioner text was fully updated at the time of publication to take account of the Insolvency Act 2001 and developments in case law and practice. New material on the rescue culture ensures that the realities of modern day practice are covered.
Table of Contents
3.01 A receiver has, in relation to the property attached by the floating charge under which he is appointed, the powers (if any) contained in the instrument creating the charge in addition to the statutory powers referred to in paragraph 3.02. If a creditor taking a floating charge considers that these statutory powers are likely to be deficient to any extent, then such deficiencies can be remedied by incorporating further powers in the instrument creating the charge. However, since the enactment of the IA 1986 when many areas of doubt arising out of the 1972 Act were clarified, most floating charge creditors have been prepared to accept the powers (if any) contained in the instrument creating the charge together with the statutory powers.
3.02 As noted in paragraph 3.01, a receiver has certain statutory powers in relation to the property attached by the charge under which he is appointed provided that these statutory powers are not inconsistent with any provision contained in such instrument. These statutory powers are summarised in the succeeding paragraphs.
3.03 Power to take possession of, collect and get in the property from the company or liquidator of the company or any other person and to take such proceedings as may seem to him expedient for that purpose.
This power lies at the root of the receiver's functions, the primary purpose of which is to realise on behalf of his appointer the assets subject to the floating charge with a view to satisfying the claim of the holder. It enables a receiver to take control and possession of property of the company to which the charge has attached to enable him to satisfy the debt of the floating charge creditor after satisfaction of prior claims in accordance with the statutory scheme of distribution contained in section 60 of the IA 1986. It enables him, for example, to collect book debts due to the company by taking proceedings in the name of the company.
3.04 Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property etc to the receiver. It has been held that the court has jurisdiction under section 234(2) to order property to be handed over to the office holders designated in section 234(1) (which includes receivers) even though there is a dispute as to its ownership. Except in so far as negligent, a receiver is given statutory protection if he seizes or disposes of property not belonging to the company.Attention is also drawn to the discussion on liens at paragraph 4.48 et seq.
3.05 Various designated persons are required to co-operate with a receiver in supplying information to him in relation to the company and its business, property etc. In addition, on the application of a receiver, the court may summon any officer of the company and certain other persons to appear before it with a view to the recovery of company property or debts due to it or generally obtaining information on its business, property etc; these provisions being supported by enforcement powers. It has been held in a case where the receivers of a group of companies sought an order under section 236 of the IA 1986 for the production by a company's solicitors of documents relating to the company that the receivers were not acting on behalf of the company alone but were in the same position as a third party who was entitled to production of the documents as against the client. Accordingly, since the solicitors could not assert a lien as against a third party they could not refuse to produce the documents to the receivers on the ground that they had a lien over the documents for the companies' unpaid costs. It is suggested that, from a Scottish legal standpoint, the Aveling Barford case may be suspect in that an artificial distinction appears to have been drawn between the company and the receiver when, in fact, the receiver is the agent of the company. Certainly, from a practical Scottish perspective, Scottish solicitors holding documents of title and owed fees on the date of receivership are in a powerful position to reach a satisfactory settlement with a receiver without prejudicing their obligations under section 236. Attention is also drawn to the discussion in McBryde.
3.06 In the event of a liquidator having been appointed on the winding-up of the company whether before or after the receiver's appointment, the liquidator is required to deliver to the receiver the property covered by the charge by virtue of this statutory power conferred on the receiver. In Manley, Petitioner the company in question was ordered to be wound-up by the court (the date of commencement of the winding-up being 15 November 1982) and following his appointment as provisional liquidator Mr Manley was appointed liquidator on 6 December 1982. On the same date the Bank of Scotland, in whose favour the company had granted a floating charge over its whole property and undertaking, appointed a receiver. Following upon a demand by the receiver on the liquidator in terms of section 15(1)(a) of the 1972 Act to deliver up the property of the company to the receiver, the liquidator presented a petition for directions (1) as to whether the liquidator was obliged to comply with the demand and (2) as to whether the liquidator or the receiver was primarily liable for the payment of the secured and preferential creditors of the company. On the first question, Lord Grieve decided that whether the receiver is appointed before or after the commencement of the winding-up his rights take precedence over the rights of the liquidator and he is entitled to take control of the property of the company in order to satisfy the debt of the holder of the floating charge. The argument put forward by the liquidator was that as the receiver's power to take possession of the company's property was subject to the rights of any person who had effectually executed diligence, this power was subject to the rights of the liquidator being a person who had effectually executed diligence by virtue of the terms of section 327(1)(a) of the CA 1948 which rendered the winding-up equivalent to complete and effectual diligences of the forms mentioned in that section. Lord Grieve, however, having taken the view that the purpose of section 327 was to cut down and equalise diligences and that the liquidator was not a person who had effectually executed diligence on the property of the company, then went on to state – 'The whole scheme of the 1972 Act is to give him (the receiver) precedence over the liquidator in the administration of the whole property of the company, even if appointed after the commencement of the liquidation'. On the second matter on which directions were sought, namely whether the liquidator or the receiver was primarily liable for the payment of the secured and preferential creditors, Lord Grieve decided the receiver was so liable. The payment of such debts is considered later in this book. There has been considerable interest in England following the Leyland Daf decision which held that liquidation expenses are not payable out of the proceeds of floating charge assets in priority to the secured creditor's debt. The House of Lords has drawn a distinction between two distinct funds: namely, the assets subject to the floating charge available to the secured creditor and the company's free assets available to the general body of creditors. While the Leyland Daf decision is likely to be persuasive in Scotland, it should be noted that the development of Scottish jurisprudence in this area has taken place on a basis quite different to England. It has always been accepted practice in Scotland where there were concurrent appointments of a receiver and a liquidator that, after categories of persons identified in section 60 have been satisfied, only then were funds available to pay the liquidator's expenses.
This power gives a receiver a wide discretion as to the method of disposal of the property covered by the charge but in exercising this power the receiver has a duty to take reasonable care. It has been stated obiter that 'in exercising his powers [the receiver] must no doubt, for example, exercise care to see that he does not realise company assets for less than the value which might reasonably be expected to be obtained'. Subject to this duty, a receiver exercises his commercial judgment backed up by whatever professional or other advice he may consider it prudent to obtain in deciding what method to employ in disposing of the company's business and assets either as a going concern or otherwise.
A receiver if he wishes to carry on the companyss:'s business almost invariably requires to obtain temporary facilities from a bank, normally the one appointing him and this power enables him to do so. As a receiver is personally liable on any contract entered into by him, except in so far as the contract otherwise provides, unless expressly agreed with the bank to the contrary, such borrowing becomes the personal liability of the receiver. A receiver cannot exclude such liability by relying on provisions in some other contract to which he is not a party such as the floating charge under which he was appointed. Should a receiver incur personal liability there is a right of indemnity out of the property attached by the charge. The power to borrow is accordingly one which requires to be exercised with caution as the property could prove to be insufficient to satisfy such right of indemnity. If a receiver wishes to arrange a bank facility in circumstances where he is unwilling to accept personal liability he should make the position clear to the bank and obtain, if the bank is agreeable, the express written confirmation of or an indemnity from the bank that he will be relieved of personal liability. In view of the provisions of section 57(2) of the IA 1986 only with such confirmation or such an indemnity will the receiver be relieved of personal liability should the proceeds of sale of the company's property prove insufficient to meet the indebtedness so incurred to the bank. While in practice it is unusual for a receiver to create a security over the property (save for the case where the receiver procures the creation by a subsidiary of a charge, usually a floating charge, over its property following the hive-down to such subsidiary of part or all of the business of the company in receivership), the existence of this power should not be overlooked when acquiring property from a receiver.
Most receivers in Scotland are accountants and so are concerned with the appointment of a solicitor to assist in the receivership. As legal problems can arise in the early days of a receivership, particularly in relation to retention of title claims by suppliers and to employee redundancies, it is always advisable and particularly so in major receiverships that in his own interests the receiver should appoint a solicitor as soon as possible after his own appointment. Experienced receivers often ascertain in advance of appointment that a solicitor or one of his partners will be available to assist. An early task for such a solicitor is checking the title of the company to its various properties and also considering the likely impact of relevant irritancy clauses in any leases. As well as being in a position to seek immediate legal advice when confronted by a problem, the receiver is then able to instruct the solicitor so appointed to confirm without delay the validity of his appointment. As in the case of voluntary liquidations, the accounts of solicitors do not normally require to be submitted for taxation.
3.10 In major receiverships, particularly where a group of companies is involved, the sale of the business or businesses is a major undertaking requiring skill and expertise on the receiver's part but which can often only be carried through with the help of adequate back-up staff with insolvency experience and various professional and other advisers. In these circumstances the gathering together at an early date of a team of such persons will hopefully result in a successful outcome to the receivership from the point of view of both the receiver's appointer and also other creditors and employees.
This could be a very useful power available to a receiver where in the course of carrying out his function he is uncertain as to the validity of any procedural or other step which he is proposing to take. As far as is known however the power has so far rarely been used by receivers. The court means the court having jurisdiction to wind up the company.
The power to seek directions is now covered by the provisions of section 63 of the IA 1986 which provides that the court, on the application of either the holder of a floating charge by virtue of which a receiver has been appointed or a receiver, may give directions to the receiver in respect of any matter arising in connection with the performance of his duties.
3.12 Power to bring or defend any action or other legal proceedings in the name and on behalf of the company.
A receiver in so doing is acting as agent for the company without incurring any personal liability, other than to agents whom he may instruct in this connection without excluding such liability, although, in that event he is entitled to be indemnified out of the property subject to the floating charge. A receiver is not infrequently faced with the problem as to whether or not to continue to defend an action raised against the company prior to his appointment. This is particularly so if, for example, the claim is for substantial damages against which the company may either not be insured at all or only partially insured and on the information then available to the receiver there may be surplus funds after satisfaction of the floating charge creditor's claim. In that event while the claimant in the damages action if successful would only be entitled to an ordinary ranking in the liquidation, the effect of such a claim succeeding might be to substantially reduce the dividend to other ordinary creditors. As, in these circumstances, it is the ordinary creditors who are likely to be affected and not the receiver's appointer, one course open to the receiver is to petition for the company's winding up and to leave the liquidator to take a decision on whether or not the action should continue to be defended. If there are no prospects of surplus funds after satisfaction of the floating charge creditor, the receiver has no interest to see any such action defended unless there are consigned funds that might be returned to the company. Should, however, the outcome of any such action against the company have a potentially adverse effect on any guarantee obligations of directors, the receiver should take no steps prejudicial to the interests of such persons without their authority and should afford them the opportunity of continuing the defence of the action. The same considerations apply in the case of proceedings raised against the company after the receiver's appointment.
This is presumably as an alternative to legal proceedings, subject to the agreement of the other party or parties. If the company is party to an agreement which specifically restricts the resolution of disputes to arbitration then in the event of such a dispute arising before or after the appointment of a receiver there is no alternative to arbitration in these circumstances.
It would of course only be prudent for the receiver to ensure that the property subject to the floating charge is adequately insured. In practice, most receivers have special arrangements with insurance companies for block cover immediately upon intimation to the insurance company concerned of the receiver's appointment. Prior to cancelling any form of insurance taken out for the benefit of employees, the duty of care owed to those employees should be considered.
In earlier days prior to the IA 1986, problems arose particularly in England over the use of the company's seal but the relevant power is now contained in the IA 1986. Execution requirements in Scotland are now contained in the Requirements of Writing (Scotland) Act 1995.
3.18 Power to appoint agents where appropriate and to employ and dismiss employees.
Whether or not to exercise this power is a decision with which a receiver of a trading company is faced immediately on his appointment and one which he takes after careful consideration of all relevant factors, bearing in mind his potential personal liability if he trades at a loss.
3.22 Power to grant or accept a surrender of a lease or tenancy of any property covered by the charge and also to take a lease or tenancy of any property required or convenient for the company's business.
In exercising any of these powers a receiver will of course require to consider carefully his own position in relation to personal liability. A receiver may also require to consider any statutory obligations imposed upon occupiers of premises. In one case a company and its receivers were held to be joint occupiers of the company's factory for the purposes of the Explosives Act 1875 and the court granted an interim interdict against the receivers in order to prevent explosive materials being left in an insecure position. While the scope of this book does not include other similar issues, serious consideration in relevant circumstances should certainly be given to environmental matters and matters arising under the Mines and Quarries legislation.
This power is now contained in the IA 1986along with the following powers: to call up uncalled capital, form subsidiaries and transfer to them the business of the company or any part of it and any of the property covered by the charge. The power to make an arrangement or compromise could be useful in that it confers on a receiver a degree of flexibility in dealing with creditors.
This power used to be of importance in the days when receivers often hived the business or businesses of a company into a subsidiary company or companies. However, as noted in Chapter 7, for tax reasons, hiving down of businesses is much less used today.
3.27 Power to change the situation of the company's registered office.
This is often necessary in that the receiver frequently sells or vacates the company's premises and this power enables him to alter the company's registered office without reference to its directors.
The most normal circumstances in which a receiver will wish to petition for the company's winding up are where there is a surplus remaining after satisfaction of the floating charge creditor's debt but which is clearly insufficient to meet in full the claims of ordinary creditors. In that event the receiver will present such a petition to the court on the grounds that the company is unable to pay its debts whereupon the court on being satisfied that such is the case will duly make a winding-up order and appoint a liquidator to whom the receiver may then deliver the surplus. The court will normally be satisfied as to the company's inability to pay its debts on the production with the winding-up petition of a statement of assets and liabilities prepared by the receiver revealing such position. If, due perhaps to lengthy litigation where the outcome remains uncertain, a receivership runs on for a lengthy period, the receiver should remember that liquidation stops prescription, but receivership does not. Accordingly, ordinary creditors who have not commenced litigation before the expiry of the relevant prescriptive period will be prejudiced by a lengthy receivership without a liquidation being commenced.
3.29 A receiver may also wish to petition for winding up, having obtained the prior approval of the floating charge creditor if there is unlikely to be sufficient to meet such creditor's debt in full, where it appears that the company has granted an unfair preference or gratuitous alienation. Such approval is not strictly necessary, but it may be prudent for the receiver to obtain it. In that event the statutory period or periods within which unfair preferences are rendered invalid should be kept in mind although a common law challenge is possible. The question of whether the assets recovered by such proceedings are attached by the floating charge or become available for the ordinary creditors is dealt with elsewhere.
3.30 There may also come to the notice of a receiver circumstances which justify the winding up of the company in order to bring into play those sections of the IA 1986 which provide remedies or create offences only in the event of the company's winding up.
3.31 In one case a receiver of a company's whole assets opposed the grant of the first order for intimation, advertisement and service of a petition presented by an ordinary creditor on the grounds that both this and any subsequent winding-up order would be detrimental to the interests of the secured creditors and sought the summary dismissal of the petition. It was held, however, that where a creditor seeks a winding-up order on the ground that a company is unable to pay its debts, the petition should not be summarily dismissed unless there are compelling reasons for so doing.
(a) any person who has effectually executed diligence on all or any part of the property of the company prior to the receiver's appointment; and
(b) any person holding a fixed security or floating charge over all or any part of the property of the company ranking prior to or pari passu with the floating charge under which the receiver was appointed.
3.34 The effect in relation to diligence of attachment or crystallisation of the floating charge on a receiver's appointment has already been discussed. The powers of a receiver are also subject to the rights of any person holding a charge over property of the company ranking prior to or pari passu with the floating charge under which the receiver was appointed. The rights of heritable creditors are unaffected by the appointment of a receiver and while another floating charge does not automatically attach or crystallise on the appointment of a receiver other than under it, the holder has then grounds for himself appointing a receiver to enable his charge to attach or crystallise.
3.35 Where a receiver sells or wishes to sell property covered by the floating charge under which he has been appointed and is unable to obtain the consent of either a creditor who has effectually executed diligence or who holds a prior or pari passu ranking security he may apply to the court for the appropriate authority.to: Such an application was made by joint receivers where an inhibiting creditor would not consent to the sale of heritable property.
3.36 Section 61 of the IA 1986 provides that where a receiver sells or disposes or wishes to sell or dispose of property of the company which is subject to the floating charge by virtue of which he was appointed and, which is subject to the security or interest of a prior, pari passu or postponed ranking creditor or is property affected by effectual diligence and the receiver cannot obtain the consent of such creditor or the person entitled to such effectual diligence, the receiver may apply to the court for authority to sell or dispose of the property. The court, on such an application may authorise such sale or disposal on such terms or conditions as it thinks fit.
3.37 Section 61(3) of the IA 1986 provides that in the case of an application where a fixed security over the property or interest in question which ranks prior to the floating charge has not been met or provided for in full, the court shall not authorise the sale or disposal of the property or interest in question unless it is satisfied that the sale or disposal would be likely to provide a more advantageous realisation of the company's assets than would otherwise be effected. Section 61(4) further provides that it is a condition of authorisation that (a) the net proceeds of the disposal, and (b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or interest in the open market by a willing seller, such sums as may be required to make good the deficiency, are applied towards discharging the sums secured by the fixed security. If there are two or more fixed securities, the above provisions apply in the order of priority of such fixed securities.
3.38 Section 61(8) of the IA 1986 empowers the receiver to grant to a purchaser an appropriate document of transfer and such document has the effect, or where recording, intimation or registration of such document is a legal requirement for completion of title to the property, then such recording, intimation or registration has the effect, of disencumbering the property of the security and freeing the property from the diligence executed upon it.
3.39 In terms of section 61(6) of the IA 1986, the receiver is required to send to the Registrar of Companies within 14 days of the granting thereof, a copy of the authorisation certified by the clerk of court obtained pursuant to section 61(2). If the receiver fails to do so without reasonable excuse, he is liable to a fine and, for continued contravention, to a daily default fine. Finally, it is expressly provided in section 61(9) that nothing in the section prejudices the right of any creditor of the company to rank for his debt in the winding up of the company.
3.40 A person who deals with a receiver in good faith and for value is not concerned to inquire whether the receiver is acting within his powers. This does not however relieve such a person from satisfying himself that a receiver has been validly appointed, whether it is a sole or joint appointment and in the latter case whether the joint receivers can act individually or must act jointly.
3.41 Section 7 of the Administration of Justice Act 1977 provided that a receiver and/or manager appointed under the law of any part of the United Kingdom under a floating charge may exercise his powers in any other part of the United Kingdom in so far as their exercise is not inconsistent with the law applicable there. The equivalent provisions in the 1985 Act (section 724) were consolidated in section 72 of the IA 1986. In the table of derivations to the 1985 Act, section 724 was stated to be derived from section 7 of the 1977 Act but the provisions are not reproduced precisely in that there are substituted for the references to the United Kingdom narrower references to Great Britain. Section 7 of the 1977 Act was however not repealed by the 1985 Act. Thus, for example, a receiver of a Scottish company may exercise his powers over property in England provided the exercise of any specific power is not inconsistent with the law of England, on which he would be well advised in the appropriate circumstances to take advice. The effect of section 72 of the IA 1986 has been considered by the courts in Scotland in the case of an English company with assets in Scotland.It should be noted that courts in most jurisdictions in Europe are reluctant or indeed will not recognise a UK receiver as he is not a court appointed official.
3.42 Prior to the repeal of section 15(4) of the 1972 Act the First Division of the Court of Session had occasion to consider the terms of that section which was restricted to extending the powers of a receiver or manager of an English company to property in Scotland in so far as not inconsistent with the law of Scotland. The facts, put simply, were that following the appointment of a receiver over the whole property of an English company a Scottish creditor having obtained decree in Scotland arrested funds in the hands of a Scottish based debtor of the company and followed this up with an action of furthcoming.
In dismissing the action the court held that the appointment of the receiver in England had the effect of attaching or crystallising the floating charge as a fixed security over the company's property both in England and Scotland and that as the creditor had not by the arrestment effectually executed diligence prior to the receiver's appointment, such arrestment was of no effect.
3.43 A receiver appointed over the property of a Scottish company operates within the statutory framework of Chapter II (sections 50–71) of Part III of the IA 1986. His powers are defined and he is required to distribute moneys received by him in accordance with mandatory directions. However, nowhere in the IA 1986 are the duties of a receiver laid down. This is not to say, however, that in exercising his powers a receiver has no duties to any particular party.
3.44 In the first place a receiver is appointed by or at the instigation of the holder of a floating charge, which charge on the appointment of the receiver becomes equivalent to a fixed charge over the property subject to such charge. This is the only method by which the holder of a floating charge can realise his security for the debt owed to him by the company. The receiver then proceeds to exercise his powers on behalf of the holder of the floating charge whose security by then has become in effect a fixed charge. That being the position it must be assumed that a receiver has duties to the company similar to those which the holder of a fixed security exercising a right of sale has towards the debtor. He must exercise his powers without negligence and generally exercise care in disposing of assets for at least the value which they might reasonably be expected to realise. In England, a receiver has a similar duty of care. It is in addition well established under the law of Scotland that the holder of a heritable security is required to have regard for the interests of both the debtor and postponed heritable creditors and that contractual provisions entitling a creditor to sell security subjects at such price as he might think fit cannot relieve him of the obligation to exercise a power of sale bona fide and with regard to the interests of the debtor and to obtain a fair price.
This would not, however, require a receiver to make a planning application to try to enhance the value of the property. Such contractual provisions might also be open to challenge as being unreasonable in terms of the Unfair Contract Terms Act 1977. In addition, sections 25 and 35 of the Conveyancing and Feudal Reform (Scotland) Act 1970 impose a duty on certain heritable creditors exercising a power of sale.
3.45 It has been held in England that as a receiver's primary responsibility is to the debenture holder, any right which a company has to obtain information from the receiver is qualified by this primary responsibility and entitles the receiver to withhold information where he forms the opinion that disclosure would be contrary to the interests of the debenture holder in realising the security.
3.46 It has also been suggested, correctly it is thought, that a duty to take reasonable care would be imposed on a receiver in delict on the basis of a decision which established that a prima facie duty of care arises where there is sufficient relationship of proximity between parties such that, in the reasonable contemplation of the one, carelessness on his part may be likely to cause damage to the other. The House of Lords in Caparo Industries plc v Dickmanset out a tripartite test in an auditor's liability case involving pure economic loss to establish if a duty of care would exist in a novel situation which did not fit within the existing categories of negligence. It is respectfully suggested that a receiver owes a duty to take reasonable care but the extent of such duty is presently unsettled. For a more detailed consideration of this, reference is made to an article by Mark Godfrey 'The Categories of Negligence Revisited.'
3.47 A receiver in Scotland is, in addition, deemed to be the agent of the company in relation to the property covered by the floating charge under which he is appointed and may only be removed by the court on cause shown and not, where appointed by the holder of a floating charge, by his appointer. These statutory provisions must, it is thought, imply a fiduciary relationship with consequential duties to the company and other parties whose interests are liable to be affected in the exercise by the receiver of his powers.
3.48 On the basis of an English Court of Appeal decision it is possible that, in the event of a receiver being considered to be in breach of his duty towards the company, proceedings by the company instituted by the directors would be competent. A derivative action by the directors and majority shareholders would, however, not appear to be competent.
3.49 While there is no direct Scottish authority on the subject, the court in England has considered on more than one occasion the question of whether a receiver owes a duty of care towards a guarantor of the company's debt. In two earlier decisions the court held that a receiver did not owe a duty of care to a guarantor but these decisions were not followed in a subsequently reported decision. The Court of Appeal held in that later case that a receiver when realising assets owed a duty both to the company and to a guarantor of its debt to take reasonable care to obtain the best possible price which circumstances permit, a decision which has since been followed.
3.50 The Court of Appeal decision was referred to in a subsequent Scottish case on consideration by the court of whether a creditor realising a security owes a duty to a guarantor. In his judgment Lord Ross reserved at the procedure roll stage a plea to the relevancy of averments that a creditor had acted in breach of a duty of care owed to a guarantor. In considering this question Lord Ross reached the conclusion that the proposition on which the Standard Chartered decision was based was not inconsistent with Scottish authorities and that he could not at that stage hold that a creditor in Scotland owed no duty to act reasonably in a question with a guarantor. If a floating charge creditor in Scotland wishes his security realised, this, in the absence of winding up, can only be effected by the appointment of a receiver. Such receiver operates within a statutory framework and although the agent of the company (as was the receiver in the Standard Chartered case) exercises his powers on behalf of the holder of the floating charge which by then has become equivalent to a fixed security. It is, accordingly, reasonable to assume that the receiver owes similar duties to those of the creditor on whose behalf he exercises these powers and, if this assumption is correct, it is suggested that the court in Scotland would be likely to reach the same decision as that in the Standard Chartered case. In the Standard Chartered case it was also held that the debenture holder might also be attached with responsibility for the receiver's actions if it were shown that such holder had interfered with the conduct of the receivership, a view subsequently approved in another case. It is also suggested that a receiver in Scotland could be liable to a guarantor in delict on the basis that, in the reasonable contemplation of the receiver, negligence on his part in disposing of assets could damage the guarantor.
3.51 If it is accepted that a receiver has a duty to exercise his powers without negligence it is suggested that this duty must extend to any creditors of the company whose interests are liable to be affected by his actings. In the Standard Chartered case Lord Denning did say (at 1416) – 'The receiver owes a duty not only to the company, but also to the guarantor, to exercise reasonable care in the disposal of the assets. I say nothing about creditors. We are not concerned with them today'. If a receiver, however, disposes of the assets attached by the floating charge in a way which can clearly be demonstrated resulted in a value being realised which was less than could reasonably be expected, he has acted negligently and the relationship of the other creditors of the company, is, it is suggested, in such proximity to him that it must have been in his reasonable contemplation that lack of care on his part was likely to cause damage to them. R3 (formerly SPI) produced in January 2000 a Statement of Insolvency Practice 14 (for Scotland) on 'a receiver's responsibility to preferential creditors' and reference is made to this for a detailed analysis of this situation.
3.52 In Larsen's Executrix v Henderson where a receiver terminated a retirement benefits scheme which provided for a death benefit it was held that while a receiver owes a duty of care to the employees of the company and must act reasonably in the discharge of such duty, he was not in breach of duty to the deceased managing director by the way he terminated the scheme in question.
(i) He should notify the trustees of every scheme that he has been appointed. Once section 36 of the Pensions Act 2004 comes into force, there will be a statutory duty to give written notice to the trustees, the Pensions Regulator and the Board of the Pension Protection Fund as soon as reasonably practicable after he has begun to act as an insolvency practitioner in relation to certain schemes.
(ii) Persons competent to act in respect of an occupational pension scheme can apply to the Secretary of State requiring the Secretary of State to pay certain unpaid employers' and employees' contributions to the scheme. The Secretary of State would then have a claim in the receivership.
(iii) As the law currently stands (see (iv) below), one of the most important duties relates to the appointment of independent trustees in accordance with sections 22-26 of the Pensions Act 1995 ('PA1995') as modified by the Occupational Pension Schemes (Independent Trustee) Regulations 1997 (SI 1997/252) (as amended by SI 1997/3038).
The obligations under PA 1995, sections 22-26 do not apply:
(a) if the scheme is not established under trust;
(b) where each member is a trustee;
(c) where all the benefits are money purchase ones or payable only on death so that no member has any accrued rights, or where the scheme would be a money purchase scheme but for the fact that it provides guaranteed minimum pensions;
(d) where all the benefits are secured by insurance policies specifically allocated to members;
(e) where the scheme is not Inland Revenue approved;
(f) where the scheme was established only for members outwith the UK; or
(g) to certain other schemes.
On the company going into receivership, the insolvency practitioner is under an obligation to satisfy himself that, in relation to certain types of scheme, at all times (during the appointment) at least one of the trustees is an independent person. If the insolvency practitioner is not so satisfied he must appoint, or secure the appointment of, an independent person as a trustee. Accordingly even once such a person is appointed, if that person ceases to be independent, resigns or dies, the obligation needs to be fulfilled again. The PA 1995 gives the power to appoint to the insolvency practitioner as an individual and not as receiver, liquidator, etc. The appointment is accordingly not by the receiver acting as agent of the company, as the writers have sometimes seen it, and in the view of the writers such an appointment would not be valid. The independent person should be appointed within three months of the date on which the insolvency practitioner forms the opinion that there was no independent trustee. This time limit was inserted with effect from 1 April 2002 by the Occupational Pension Schemes (Winding-Up Notices & Reports, etc) Regulations 2002. If two or more insolvency practitioners are acting in different capacities, the duty falls on the liquidator, provisional liquidator or administrator (Pensions Act 1995, s 23(4)).
If the insolvency practitioner neglects or refuses to discharge his duty, a member of the scheme may apply to the court for an order requiring him to do so (PA 1995, s 24(1)).
An obligation is placed on the insolvency practitioner to provide information to the scheme trustees (PA 1995, s 26(1)), the expenses so incurred being recoverable as being in discharge of his duties. The insolvency practitioner need do nothing where the expenses cannot be so recovered unless the trustees of the scheme undertake to meet them (PA 1995, s 26(3)).
(iv) The position will change once section 36 of the Pensions Act 2004 ('PA 2004') comes into force, at a date yet to be determined. PA 2004, section 36 provides for the amendment of PA 1995, sections 22-26. Under the new provisions, when a person begins to act (or when he ceases to act) as insolvency practitioner in relation to a company, he must, as soon as reasonably practicable, give written notice to the Pensions Regulator, the Board of the Pensions Protection Fund and the trustees of the scheme. Subsequent regulations will set out the information to be provided in the notice. The requirement for the practitioner to appoint, or secure the appointment of, an independent trustee will be repealed. Instead, the Pensions Regulator will have the power to appoint an independent trustee, who is an 'independent person', as defined in PA 1995, section 23 (as amended by PA 2004) and is on the register which will be maintained by the Pensions Regulator, in accordance with regulations.
The receiver may wish to consider if any sums paid into a scheme are recoverable as either ultra vires payments or gratuitous alienations. He may also have a duty to his appointed to find out if there is likely to be a surplus in the scheme.
Reference is made to the duty to employees who are members of a scheme in paragraph 3.52 above.
A receiver may be able to exercise beneficial powers of the company under a pension scheme but not fiduciary powers. Further discussion of this strays into trust law and outwith the scope of this book although it is worth pointing out that conflicts of interest are highly likely to arise.
3.54 A receiver is deemed to be the agent of the company in relation to the property of the company attached by the charge under which he is appointed. Accordingly, the receiver in exercising his powers in relation to such property, providing he makes clear that he does so as receiver of the company, is acting as an agent for a disclosed principal and both his liability and that of the company are, subject to the provisions of the IA 1986, governed by the principles and rules of the law of agency. However, a receiver (including one whose powers are suspended on the appointment of another receiver under a prior ranking floating charge) is personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides. Such liability cannot be excluded by reliance on a contract to which the receiver is not a party such as the floating charge under which he was appointed. In the event of personal liability not being excluded in terms of the contract, the receiver has a right of indemnity against the property covered by the charge. This right of indemnity is postponed to the rights of fixed charge creditors ranking in priority to or pari passu with the floating charge and creditors who have effectually executed diligence. The provisions of section 57(1) of the IA 19866 do not limit any right to indemnity which the receiver would have apart from them, nor limit his liability on contracts entered into or adopted without authority nor confer any right to indemnity in respect of that liability. A contract entered into without authority is presumably one outwith the receiver's powers, statutory or otherwise.
3.55 As a result of the provisions of the IA 1986, a receiver is also now personally liable (without the right to exclude such liability) on any contract of employment adopted by him in the carrying out of his functions while at the same time a receiver is not to be taken to have adopted such a contract by reason of any act or omission within 14 days of his appointment. During such period only a positive act of adoption will, it is assumed, make a receiver personally liable on such a contract but on the expiry of the period if a receiver continues any contract of employment there will, presumably, be an assumption that he has adopted such contract and thus accepted personal liability notwithstanding the provisions of section 57(4) to the effect that a receiver is not by virtue of his appointment alone personally liable on a pre-receivership contract to which the company is a party. This amendment effectively reversed an English Court of Appeal decision. However, it is very important to appreciate fully the developments in England in the last 10 years or so in employment matters. In view of all of the difficulties caused by the Specialised Mouldings caseand the decision in the subsequent Paramount cases the Government, following pressure from insolvency practitioners deeply concerned about the commercial consequences after the Court of Appeal decision in Paramount and prior to the hearing of the House of Lords Appeal, enacted the IA 1994 amending the IA 1986 which provides that the only liabilities secured are limited to amounts payable by way of wages or salary.
Such amounts would also include holiday pay, absence from work through sickness and contributions to an occupational pension scheme. For further discussion on the above matters, attention is drawn to Chapter 6 .
3.56 The statutory framework of section 57(1) and (2) of the IA 1986 appears to be that, in the first place, in relation to the property covered by the charge, the receiver is agent of the company. However, should he enter into any contract in the exercise of his powers, not directly in relation to such property, he is personally liable under such contract unless it provides otherwise and remains so even if his powers are suspended on the appointment of a receiver by the holder of a prior ranking floating charge. He is also personally liable in respect of qualifying liabilities as defined by section 57(2) of the IA 1986 as amended by the IA 1994 on any employment contract adopted by him. For practical reasons, this is the only way in which a receiver could effectively exercise his powers as third parties and employees would be reluctant to enter into or continue contracts with the receiver (eg for the supply of goods or services) unless there was a reasonable guarantee of payment in full by the receiver undertaking personal liability. Put another way, entering into or continuing a contract with the agent of a disclosed but apparently insolvent principal without such agent accepting personal liability does not make commercial sense. It is arguable that, by virtue of the provisions of section 57(1) of the IA 1986, the receiver's personal liability is excluded in respect of the exercise of his powers as receiver directly in relation to the property covered by the charge (eg in selling such property) but it is prudent of a receiver who wishes to exclude such personal liability to expressly so contract to the effect that he does so as receiver and without any personal liability.
The presumption of agency is rebuttable. A receiver incurring personal liability must bear in mind the limitations on his indemnity: namely his right of relief extends to the property covered by the charge alone and then only after satisfaction of the rights of certain other creditors. The maximum value of his indemnity is, therefore, the net value of such property after deducting the claims of such creditors. This point assumes greater importance where the receiver carries on the company's business after his appointment, particularly if this involves carrying on or entering into substantial contracts in, for example, the construction or engineering industries.
3.57 A receiver whose powers are suspended as a result of the subsequent appointment of another receiver by the holder of a prior ranking floating charge is entitled to retain property (including letters or documents) and not to release them to the other receiver until given by him a valid indemnity in respect of any expenses, charges and liabilities he may have incurred in the performance of his functions as receiver. This indemnity is similarly limited and the first receiver should in obtaining such an indemnity take into account the fact that the property in question will cease to be under his control and that its value may decrease under the control of the other receiver.
3.58 Whereas the office of receiver was only introduced into the law of Scotland in 1972, it has existed in England for over a century with the appointment being capable of being made both by the court and also out of court, the framework of the law being a mixture of common law and statute law. A receiver appointed by the court in England being an officer of the court is neither an agent for the company nor the debenture holder whereas a receiver appointed out of court is usually, in terms of the debenture by virtue of which he is appointed, agent for the company. This agency, in the case of an administrative receiver appointed out of court, is now given statutory authority and is a general agency not restricted to the assets covered by the charge although of course an administrative receiver is defined as a receiver or manager of the whole or substantially the whole of a company's property.
3.59 In England, it has been judicially established that the liquidation of the company, voluntary or compulsory, terminates the agency of a receiver appointed out of court but not the receivership powers which the receiver remains entitled to exercise in the name of the company, albeit subject to personal liability in that he is then acting as a principal. Statutory authority for the termination of such agency has also now been introduced but at the same time provisions governing a receiver's liability on contracts similar to the equivalent Scottish provisions have also been introduced as have statutory powers which include power to carry on the business of the company. It has also been held in England that on the termination of such agency a receiver who continues to act may in certain circumstances become the agent of his appointer, for example, if his appointer treats him as such. As a result, it was held, in the absence of an express exclusion in the agency contract, that the appointer was entitled to an indemnity from the receiver in respect of negligence on his part.
3.60 The Cork Committee noted that there had been much criticism of the rule that the receiver's agency came to an end on liquidation which they stated caused particular difficulty in the case of a compulsory liquidation since its effect was in general to terminate all contracts of employment with the result that if the receiver decided to retain employees, he became personally liable for their wages and for any redundancy pay if they were later made redundant. As a result some receivers, rather than face the prospect of such personal liability, considered it prudent to close down the business. While an administrative receiver's agency will in England still terminate on winding-up the receiver will be entitled to an indemnity out of the assets of the company in respect of any personal liability incurred on any contract entered into by him in performance of his functions prior to the effective date of the winding up.
3.61 Receivership was introduced in Scotland by the 1972 Act (which was consolidated in the 1985 Act and again in the IA 1986) and from the outset all receivers in Scotland, whether appointed by the holder of a floating charge or by the court, have operated within a statutory framework. A receiver in Scotland is agent of the company in relation to the property attached by the charge under which he is appointed and, subject thereto, is, except where otherwise provided, personally liable on contracts which he enters into and is also personally liable without exception (but subject to the qualifying liabilities as defined in section 57(2) of IA 1986 as amended by IA 1994) on contracts of employment adopted by him. One of the receiver's powers is to carry on the company's business or any part of it. The exercise of this power remains unaffected by the liquidation of the company, his rights whether appointed before or after liquidation taking precedence over the rights of the liquidator.
3.62 The IA 1986 does not in Chapter II of Part III (which deals with Receivers in Scotland) include a provision equivalent to that contained in section 44(1)(a) terminating the agency of an administrative receiver in England on the liquidation of the company. That being the case and in the absence of any judicial authority it is not clear whether the statutory agency of a receiver in Scotland is terminated by liquidation. What is clear, however, is that notwithstanding the liquidation of the company he is still entitled to exercise all the powers conferred on him which includes the power to carry on all or part of the company's business and dispose of property subject to the charge. In this connection the provisions of section 127 of the IA 1986, which avoid any disposition of the company's property after the commencement of the winding-up, do not apply as the 'disposition' is the charge under which the receiver was appointed. In exercising such powers, however, a receiver must accept personal liability on all contracts entered into by him after liquidation whether or not they relate to the property covered by the charge, unless of course the contract expressly provides otherwise. Against that background he should bear in mind the extent of his indemnity against the property subject to the charge and that his actings will be liable to scrutiny by the liquidator.
3.63 Any contract entered into by the company prior to the appointment of a receiver continues in force in spite of such appointment, unless the contract specifically provides for termination on receivership . Such provision may render a contract voidable only, entitling the other party to terminate should he so wish. In the event of a contract so continuing, the receiver does not automatically by his appointment alone incur personal liability although it will be a question of fact in each case whether the receiver has by his actings adopted any particular contract so as to incur personal liability unless specifically excluded. As a result of an amendment introduced by the IA 1986 it is now provided that a receiver is personally liable (in respect of qualifying liabilities as defined in section 57(2) of IA 1986 as amended by IA 1994) on any contract of employment adopted by him in the carrying out of his functions.
3.64 This provision that a pre-receivership contract remains in force does not mean that a receiver must implement the contract as agent of the company and the court will not necessarily force him to do so. In Macleod v Alexander Sutherland Ltd the pursuer had sold ground to a company under and in terms of missives, one of the terms of which was that the purchasing company should perform certain specified building and construction work on the ground. The purchasing company had a receiver appointed over its whole assets before any of this work was carried out and ceased trading. The pursuer raised an action of specific implement against the company and, failing implement, damages. As a matter of fact, implement of the contract was impossible in that having ceased trading the company had no materials or employees. The court refused to grant decree of specific implement, stating that it would be inequitable to grant such a decree against a company which could act only through the agency of a receiver and which, if the receiver should decline to act, would inevitably be in contempt of court in respect of an omission which it would be powerless to remedy.
3.65 Similarly in England the court has refused to grant decree of specific implement. In Airline Airspares Ltd v Handley Page Ltd it was held that a receiver appointed out of court was in a better position than the company in relation to current contracts and, having decided not to implement a pre-receivership contract, could not be prevented from following a course of action which would effectively repudiate or frustrate a pre-receivership contract provided this would not adversely affect the company's goodwill or the realisation of its assets.
3.66 The contract in Airline Airspares Ltd v Handley Page Ltd obliged the company to pay commission on the sale of a certain aircraft which it manufactured, the action being raised by the plaintiff on learning of the proposed sale by the receiver of such aircraft manufacturing business. These decisions should be contrasted with two subsequent English decisions where the court did make orders for specific performance. However, in the earlier of these cases the contract in question was for the sale of land, the vendor company having been placed in receivership before completion had taken place and in the later the contract involved options over land. These decisions can be distinguished in that the contracts were ones which could have been subject to an order for specific implement whether or not receivership had intervened and in addition there was no question of the receiver having to incur any personal liability as the only alternative to being in contempt of court. The decision in another case in England should be noted. In that case where a third party holding a pre-emption right from a company in receivership over certain of its machinery obtained an order from the court restraining the company from selling the machinery without allowing the third party to exercise such pre-emption right, the court on an application to discharge the order refused to do so. The court held that since the party holding the right of pre-emption had a good arguable case and damages would not be an adequate remedy, the court had to consider the balance of convenience in deciding whether or not to discharge its order. Since the administrative receiver would not suffer any harm from the continuation of the order, it was appropriate that it should be continued but should be varied to provide that (a) the third party would not reveal the right of pre-emption to alternative possible purchasers and (b) the third party must accept or refuse promptly any offer of sale at the price matching any other offer and must offer terms which match those of any other offer.
3.67 A receiver in Scotland is empowered to carry on the company's business or any part of it and is given wide powers of sale and power to 'do all other things incidental to the exercise' of his powers. It, accordingly, is thought that only in limited circumstances (such as in the Freevale case) would the court prevent a receiver in Scotland from taking action which would effectively frustrate a pre-receivership contract.
3.68 Failure by a receiver to implement a contract entered into by a company prior to his appointment renders the company liable to damages for breach of contract but any such claim is entitled to an ordinary ranking only. In these circumstances the receiver in the exercise of his powers, in declining as agent for the company to implement a pre-receivership contract, should not have any liability to the other party to the contract for inducing its breach. In considering whether or not to implement a pre-receivership contract a receiver must, nevertheless, exercise reasonable care in reaching his decision to avoid a possible claim on the grounds of breach of duty in that his action had a detrimental effect on the realisation of the company's assets which could have been avoided had he exercised such care. Having decided to implement a pre-receivership contract the receiver in adopting it and carrying it through becomes effectively personally liable although with a right of relief against the assets covered by the charge.
3.69 One of the commonest pre-receivership contracts encountered is a lease of the company's premises. A receiver of a company occupying premises under a lease is under no obligation to implement the lease and, unless specifically agreeing to do so, he incurs no personal liability for the tenant's obligations. Should the receiver wish to continue the company's occupation for a limited period, for example, until he removes the company's property, he should endeavour to reach agreement with the landlord that he is responsible for rent alone for that limited period from the date of his appointment on the clear understanding that he accepts no personal liability whatsoever for any other of the company's obligations as tenant. More detailed reference to this subject is contained in paragraphs 4.15 and 4.27.
3.70 As has been seen a receiver who accepts personal liability under a contract entered into by him remains so liable even though his powers are suspended. In addition, any contract entered into by a receiver (whether or not he accepted personal liability), subject always to its terms, continues in force notwithstanding the suspension of the receiver's powers.
3.71 If a person appointed by the holder of a floating charge to act as a receiver takes possession of and deals with assets of a company and subsequently his appointment is discovered to be invalid, he will incur personal liability. This could arise if the floating charge by virtue of which he was appointed turned out for one reason or another to be invalid because in these circumstances it would not attach to the assets, thereby depriving the person appointed of any right to exercise the powers of a receiver. Some essential step in the appointment might be invalid thus rendering the appointment itself invalid or the instrument of appointment might have been invalidly executed. Of critical importance in any receivership appointment is to check the registration number of the company. It is a truism in the experiences of receivers that changing the names of all the companies in a group can be a precursor to the appointment of a receiver some six months or so later.
3.72 Should however the appointment of a person as receiver by the holder of a floating charge be discovered to be invalid whether as a result of the invalidity of the instrument of appointment or otherwise, the court may order such holder to indemnify the person so appointed against any liability arising solely by reason of the invalidity of the appointment. These provisions only apply in the case of a receiver appointed by the holder of a floating charge and not in the case of a receiver appointed by the court.
3.73 Notwithstanding such a provision for indemnity, it is in the interests of every person appointed as a receiver to satisfy himself that the appointment is valid. It is also in the interests of the appointer to ensure the appointment is valid. One basis for challenging the validity of a floating charge is under section 245 of the IA 1986.
The provisions of section 245 render invalid in certain circumstances floating charges created within specified periods prior to the making of an administration order, an administrator being appointed following the filing with the court of a copy of notice of intention to appoint or the company going into liquidation. Should a person appointed receiver be in any doubt as to the validity of his appointment, whether by reference to these provisions or otherwise, he should consider his position carefully before dealing with the company's assets and whether it might be appropriate to seek an indemnity from his appointer before acting.
 IA 1986, Sch 2.
 IA 1986, Sch 2.
 McPhail v Lothian Regional Council 1981 SLT 173: Taylor, Petitioner, 1982 SLT 172; Forth & Clyde Construction Co Ltd v Trinity Timber & Plywood Co Ltd 1984 SLT 94; Ritchie v EFT Industrial Ltd 1998 SLT 11; and see 'The Receiver and Book Debts 1982 SLT (News) 129, and paras 2.12 to 2.14.
 IA 1986, s 234(2).
 Re London Iron and Steel Co Ltd  BCLC 372.
 IA 1986, s 234(3) and (4).
 IA 1986, s 235(3).
 Ibid, s 235(2).
 Ibid, s 236(2).
 Ibid, s 237.
 Re Aveling Barford Ltd  3 All ER 1019.
 Re Aveling Barford Ltd  3 All ER 1019.
 IA 1986.
 McBryde Bankruptcy (2nd edn) 10-46 to 54.
 Manley, Petitioner 1985 SLT 42.
 See now the IA 1986, Sch 2, para 1.
 Ibid, s 185(1)(a).
 Ibid, s 185(1)(a).
 See para 9.14 et seq.
  UKHL 9,  2 AC 298.
  UKHL 9,  2 AC 298.
 IA 1986.
 See para 3.44 and sequentia.
 Forth & Clyde Construction Co Ltd v Trinity Timber & Plywood Co Ltd 1984 SLT 94, per the Lord President at 97.
 IA 1986, s 57(2).
 Hill Samuel & Co Ltd v Laing 1989 SLT 760.
 Ibid, ss 57(3) and 60(1)(d).
 CA 1985, s 744 and also the IA 1986, s 120.
 Eg to collect a debt due to the company (Taylor, Petitioner 1982 SLT 172) and to recall an arrestment (Forth & Clyde Construction Co Ltd v Trinity Timber & Plywood Co Ltd 1984 SLT 94).
 Larsen's Executrix v Henderson 1990 SLT 498.
 See IA 1986, s 42 and Sch 21, para 8.
 For employees generally see Chap 6.
 Lord Advocate v Aero Technologies Ltd (in receivership) 1991 SLT 134.
 Sch 2, para 16.
 Paras 7.37 and 7.38.
 IA 1986, Sch 2, para 22.
 IA 1986, s 122(1)(f).
 Ibid, s 123(1)(e).
 Ibid, s 60(2)(c).
 IA 1986, s 243.
 See Chap 2 para 2.37.
 eg wrongful trading, fraudulent trading or misfeasance: see also the Company Directors Disqualification Act 1986. But note that the EA 2002 provides that the liquidator will need the sanction of the court or the liquidation committee to commence a wrongful trading action.
 Foxhall & Gyle (Nurseries) Ltd, Petitioners 1978 SLT (Notes) 29; see also paras 4.64 to 4.70.
 IA 1986, s 55(3).
 Paragraphs 2.16 to 2.20.
 IA 1986, s 61; see also paras 7.34 to 7.36.
 Armour and Mycroft, Petitioners 1983 SLT 453.
 IA 1986, s 61(1).
 Ibid, s 61(2).
 IA 1986, s 61(5).
 IA 1986, s 61(7).
 IA 1986, s 55(4).
 Norfolk House plc (in receivership) v Repsol Petroleum Ltd 1992 SLT 235n.
 Art 2 (definition of 'liquidator') and Annex C of Council Regulation 1346/2000/EC.
 Gordon Anderson (Plant) Ltd v Campsie Construction and Anglo Scottish Plant Ltd 1977 SLT 7.
 IA 1986, Sch 2.
 Ibid, s 60.
 IA 1986, s 70.
 IA 1986, s 70.
 Forth and Clyde Construction Co Ltd v Trinity Timber and Plywood Co Ltd 1984 SLT 94, Lord President Emslie at 97.
 Re B Johnson & Co (Builders) Ltd  Ch 634; Cuckmere Brick Co Ltd v Mutual Finance Ltd  Ch 949; American Express International Banking Corpn v Hurley  3 All ER 564; Watts v Midland Bank plc  BCLC 15; Knight v Lawrence  BCC 411.
 Beveridge v Wilson (1829) 7 S 279 and Kerr v McArthur's Trs (1848) 11 D 301.
 Rimmer v Thomas Usher & Sons Ltd 1967 SLT 7.
 Silven Properties Ltd v Royal Bank of Scotland plc  BCC 1002.
 Gomba Holdings UK Ltd v Homan  3 All ER 94.
 R J Reed 'Aspects of the Law of Receivers in Scotland – The Receiver's Duty of Care' 1983 SLT 261, p 262.
 Junior Books Ltd v Veitchi Co Ltd 1982 SLT 492.
  1 All ER 568.
 2005 SLT 9.
 IA 1986, s 57.
 Ibid, s 62(3).
 Newhart Developments Ltd v Co-operative Commercial Bank Ltd  QB 814.
 Watts v Midland Bank plc  BCLC 15.
 Barclays Bank Ltd v Thienel and Thienel (1978) 247 Estates Gazette 385; Latchford v Beirne  3 All ER 705.
 Standard Chartered Bank Ltd v Walker  1 WLR 1410.
 American Express International Banking Corpn v Hurley  3 All ER 564.
 Lord Advocate v Maritime Fruit Carriers Co Ltd 1983 SLT 357.
 American Express International Banking Corpn v Hurley  3 All ER 564.
 Caparo Industries plc v Dickman  1 All ER 568 (but see discussion in para 3.46).
 Forth & Clyde Construction Co Ltd v Trinity Timber & Plywood Co Ltd 1984 SLT 94.
 Standard Chartered Bank Ltd v Walker  1 WLR 1410.
 Appendix 15.
 1990 SLT 498.
 IA 1986, s 57(1).
 Ibid, s 57(2).
 Hill Samuel & Co Ltd v Laing 1989 SLT 760.
 Ibid, s 57(3).
 Ibid, s 60(1)(a) and (b) – see also the Leyland Daf decision  1 All ER 1289.
 IA 1986, s 57(2).
 Ibid, s 57(5).
 Nicoll v Cutts (1985) BCLC 322.
 Re Specialised Mouldings Ltd (13 February 1987, unreported), per Harman J.
  2 AC 394 per Lord Browne-Wilkinson at 448G et seq.
 Para 6.09.
 Inverness District Council v Highland Universal Fabrications Ltd  SLT 556n.
 IA 1986, s 56(5).
 IA 1986, s 44(1)(a).
 Ibid, s 29.
 Gosling v Gaskell  AC 575; Thomas v Todd  2 KB 511.
 Barrows v Chief Land Registrar (1977) Times, 20 October.
 IA 1986, s 44.
 Ibid, s 44(1)(b) and (c).
 Ibid, s 42(1) and Sch 1.
 American Express International Banking Corpn v Hurley  3 All ER 564 (but see discussion in para 3.46).
 Report of the Review Committee on Insolvency Law and Practice (Cmnd 8558) para 453 et seq.
 IA 1986, s 44.
 Manley, Petitioner 1985 SLT 42. See also para 3.06 above and Ch 6.
 Re Park Ward & Co Ltd  Ch 828.
 Eg. irritancy provisions in a lease.
 IA 1986, s 57(4).
 IA 1986, s 57(2).
 Macleod v Alexander Sutherland Ltd 1977 SLT (Notes) 44.
  Ch 193.
  Ch 193.
 Freevale Ltd v Metrostore (Holdings) Ltd  1 All ER 495 and Telemetrix plc v Modern Engineers of Bristol (Holdings) Ltd  LS Gaz R 1561.
 Ash & Newman Ltd v Creative Devices Research Ltd  BCLC 403.
 IA 1986, Sch 2, para 14.
 Ibid, para 23.
 Freevale Ltd v Metrostore (Holdings) Ltd  1 All ER 495.
 Inverness District Council v Highland Universal Fabrications Ltd 1986 SLT (Notes) 556.
 Paragraph 3.8.
 IA 1986, s 57(2).
 Ibid, s 57(7).
 Elwick Bay Shipping Co Ltd v Royal Bank of Scotland Ltd 1982 SLT 62.
 IA 1986, s 63(2).
 See para 8.45 et seq.