Medforth v Blake & Ors [1999] EWCA Civ 1482 (26 May 1999)

Medforth v Blake & Ors [1999] EWCA Civ 1482 (26 May 1999)

Receivers appointed by a mortgagee who choose to manage the mortgaged business owe the mortgagor an equitable duty of care to manage with due diligence and reasonable competence, in addition to a duty of good faith. Failure to take reasonable steps to obtain available commercial discounts may constitute a breach of this duty, even absent dishonesty or bad faith.

Citation
[1999] EWCA Civ 1482
Parties
Plaintiff/respondent: Douglas Medforth; Defendants/appellants: James Peter Blake & Others (Mr Blake, Mr Jones, Mr Hore)
Jurisdiction
England and Wales
Judgment Date
26 May 1999
Procedural Posture
Civil Appeal / Appeal From High Court (queen's Bench Division) on a Preliminary Issue
Outcome
Appeal dismissed
Legal Topics
Duties of Receivers, Mortgage Law, Equitable Duty of Care, Good Faith, Management of Mortgaged Property
Property Law Equity Banking and Finance Duties of Receivers Mortgage Law Equitable Duty of Care Good Faith Management of Mortgaged Property

Case Brief

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Parties

Douglas Medforth

Plaintiff/respondent

James Peter Blake & Others (Mr Blake, Mr Jones, Mr Hore)

Defendants/appellants

Procedural Posture

Civil Appeal / Appeal From High Court (queen's Bench Division) on a Preliminary Issue

Legal Issues

  1. 1 Whether receivers appointed by a mortgagee owe the mortgagor a duty of care in managing the mortgaged business, beyond a duty of good faith
  2. 2 Scope and standard of any such duty

Ratio Decidendi

Receivers appointed by a mortgagee who choose to manage the mortgaged business owe the mortgagor an equitable duty of care to manage with due diligence and reasonable competence, in addition to a duty of good faith. Failure to take reasonable steps to obtain available commercial discounts may constitute a breach of this duty, even absent dishonesty or bad faith.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed with costs
  • Legal Aid assessment of the Respondent's costs