APPENDIX 10 A GUIDE FOR RECEIVERS IN THE CHANCERY DIVISION 1.   This guide sets out brief notes on the procedure to be followed after an order has been made appointing a receiver in the Chancery Division. The procedure is now governed by CPR Part 69 and its PD. 2.   Appendix C contains notes on the main powers and duties of a receiver and a copy should be passed to the receiver. ACTION ON THE APPOINTMENT OF A RECEIVER (Rule 69.6; PD 6&8) 3.   Where an order has been made appointing a receiver, it is generally necessary to apply for directions, by application notice under Part 23. Part 69 PD 6 lists the matters on which directions will usually be given. A draft order should normally be submitted with the Application Notice. 4.   The application for directions should normally be made immediately after the making of the order appointing the receiver, especially where security has to be given within a limited time (see below). Only if the order appointing the receiver appoints him or her by name and gives full directions as to accounts and security will an application for directions not be necessary. 5.   The receiver may of course apply to the Master at any time for other directions as necessary. Where the directions are unlikely to be contentious or important to the parties this may be done by letter (see Part 69 PD 8). Giving Security (Rule 69.5; PD 7). 6.   The order appointing a receiver will normally include directions in relation to security, and will specify the date by which security is to be given. It is therefore important to obtain an early date for the directions hearing. If security is not completed within the time specified the receivership may be terminated and it will then be necessary for an application to be made to renew it. To avoid this, if it seems likely that security will not be given in time an application should be made at the directions hearing for an extension of time to give security. 7.   When the amount of the security has been settled, a guarantee in Form PF 30 CH (Appendix A) must (unless the receiver is a licensed insolvency practitioner covered by bond, which has been extended to cover the appointment) be prepared and entered into with one of the four main clearing banks or the insurance company listed in Appendix B. 8.   The guarantee must then be engrossed and executed, i.e. signed by the receiver and signed and sealed by the bank or insurance company. It should then be lodged in Chancery Chambers, Room TM7.09, Royal Courts of Justice, Strand London WC2A 2LL. It will then be signed by the Master and endorsed with a certificate of completion of security and placed on the court file. Where security is given by bond, written evidence of the extended bond and the sufficiency of its cover must be filed in Room 7.09 in accordance with the requirements of Part 69 PD 7.3(1). 9.   If the amount of the security given is subsequently increased or decreased, an endorsement is made to the original guarantee. Receiver's Remuneration (Rule 69.7; PD9) 10.   A receiver may only charge for his services if the court permits it and specifies the basis on which the receiver is to be remunerated. Unless the court directs the remuneration to be fixed by reference to some fixed scale, or percentage of rents collected, it will determine the amount in accordance with the criteria set out in rule 69.7(4). Receiver's Accounts (Rule 69.8; PD 10). 11.   If directions as to the receiver's accounts have not been given in the order appointing the receiver, such directions must be obtained at the directions hearing. 12.   Normally accounts are prepared half-yearly and must be delivered within a month of the end of the accounting period. 13.   Generally accounts need only be presented to the court if any party receiving them serves notice on the receiver, under rule 69.8(3), that he objects to any item in the accounts. Discharge of Receiver and Cancellation of Security (Rule 69.10&11) 14.   When a receiver has completed his duties, the receiver or any party should apply for an order discharging the receiver and cancelling the security. 15.   When an order for cancellation of a receiver's security has been made, any guarantee and the duplicate order appointing the receiver are endorsed to that effect. 16.   The endorsed guarantee and duplicate order should then be taken to the bank or insurance company by the solicitors for cancellation and return of any outstanding premium. Appendix A to Guide for Receivers Guarantee for receiver's acts and defaults1 IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION [TITLE] I, ....(Name). of ......(address), the Receiver [and manager] appointed by Order dated......(date) (or proposed to be appointed) in this claim hereby undertake to the Court duly to account for all money and property received by me as such Receiver [and manager] at such times and in such manner in all respects as the Court directs. And we...... (name(s) of surety or sureties) hereby [jointly and severally2] undertake with the Court and guarantee to be answerable for any default by ......(name) as such Receiver [and manager] and upon such default to pay to any person or persons or otherwise as the Court directs any sum or sums not exceeding £......in total that may from time to time be certified by [a Master of the Supreme Court][a District Judge] to be due from.........(name) as Receiver [and manager] and we submit to the jurisdiction of the Court in this action to determine any claim made under this undertaking. DATED this ......... day of ......... 20... Signed sealed and delivered by the above named ......... in the presence of or The Common Seal of ......... was hereunto affixed in the presence of:- (Signature of receiver) (Seal of surety with appropriate signature or signatures) 1 Adapted from Form PF 30CH. 2 Omit these words in the case of a guarantee or other company. Appendix B to Guide for Receivers Guarantees for Personal Applicants The insurance company detailed below is willing to act as surety Name of company Address to be shown on and for correspondence Zurich GSG Limited Hawthorn Hall Hall Road Wilmslow Cheshire SK9 5BZ =========================== Appendix C to Guide for Receivers The Powers and Duties of a Receiver 1.   The main function of a receiver appointed by the court is to protect the assets received by him pending the court proceedings. The following notes set out some of the more important powers and duties a receiver should be aware of. 2.   A receiver must obtain the permission of the court (which may be contained in the order appointing him) before he can:    (a)   bring, defend or compromise legal proceedings (b) pay a debt (other than in a partnership claim) (c)   compromise a claim (d)   purchase or sell assets other than in the normal course of business (e)   grant obtain or surrender a lease or purchase or sell real property (even in the course of managing a business); since the appointment of a receiver is an equitable remedy it does not confer on him any title to land: unless the legal owner is prepared to join in the conveyance or lease the receiver would in any case have to obtain a vesting order under section 47 or section 50 of the Trustee Act 1925Acts. (f)   borrow money (h)   carry on or close down or sell a business (i)   employ additional staff in the course of managing a business (j)   carry out repairs to property costing more than £1000 in any one accounting year 3.   Receivers should ensure that they have insurance (if any) transferred into their own names and should consider the adequacy of the insurance cover. 4.   Receivers are not entitled to instruct their own solicitors without the express permission of the court. 5.   Receivers should seek the court's directions on any question of doubt which arises in the course of the receivership. 6.   Receivers should bear in mind that their function as receiver does not include the preparation of partnership accounts and they cannot include fees for such work in their remuneration as receiver. 7.   Unless expressly authorised by the court (whether in the Order appointing him or otherwise) the receiver must not part with assets in his hands, whether to the person appointing him or otherwise. If he has completed his functions as receiver before the disputes between the parties have been resolved in the proceedings, the receiver should normally apply to be discharged on lodging into court the money he is holding.     Previous     Next     Top