McGowan v Chadwick & Anor [2002] EWCA Civ 1758 (05 December 2002)

McGowan v Chadwick & Anor [2002] EWCA Civ 1758 (05 December 2002)

The only losses recoverable against a court-appointed receiver by a partner are those suffered in the capacity as partner, not as a disappointed purchaser. In this case, only the claim for pre-receivership liabilities and certain non-litigation legal costs were arguable; all other heads of loss were not recoverable as they were suffered in the capacity of a purchaser or had already been adjudicated upon.

Citation
[2002] EWCA Civ 1758
Parties
Claimant: John Patrick McGowan; Defendant/respondent: Michael Chadwick; Interested Party/appellant (receiver): Newton Grant
Jurisdiction
England and Wales
Judgment Date
05 December 2002
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal allowed in part; cross-appeal dismissed.
Legal Topics
Receivership Duties, Partnership Dissolution, Breach of Fiduciary Duty, Damages for Mismanagement, Permission to Sue Court Appointed Receiver
Equity Partnership Law Insolvency Receivership Duties Partnership Dissolution Breach of Fiduciary Duty Damages for Mismanagement Permission to Sue Court Appointed Receiver

Case Brief

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Parties

John Patrick McGowan

Claimant

Michael Chadwick

Defendant/respondent

Newton Grant

Interested Party/appellant (receiver)

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether a court-appointed receiver owes duties to a partner beyond their capacity as partner
  2. 2 Whether losses claimed by a partner as a disappointed purchaser are recoverable against the receiver
  3. 3 Whether permission should be granted to commence proceedings against the receiver for alleged breaches of duty

Ratio Decidendi

The only losses recoverable against a court-appointed receiver by a partner are those suffered in the capacity as partner, not as a disappointed purchaser. In this case, only the claim for pre-receivership liabilities and certain non-litigation legal costs were arguable; all other heads of loss were not recoverable as they were suffered in the capacity of a purchaser or had already been adjudicated upon.

Court Disposition

Appeal allowed in part; cross-appeal dismissed.

Orders

  • Permission to proceed with claims against the receiver is limited to (a) pre-receivership liabilities and (b) non-litigation legal costs not previously adjudicated; all other claims are struck out.