Cases - Silven Properties v Royal Bank of Scotland plc

Record details

Name

Silven Properties v Royal Bank of Scotland plc

Date

[2003]; (2003)

Citation

EWCA Civ 1409; 50 EG 96

Keywords

Estate agency

Summary

The appellant's properties were mortgaged to the respondent bank. The bank appointed receivers who sold the properties in exercise of the power of sale. Although several of the properties were development sites, the receivers decided not to apply for planning permission for the sites. The appellant claimed that the receivers were under a duty to pursue planning applications in order to achieve the best price obtainable.

The Court of Appeal held that the mortgage creates no ordinary agency and that general agency principles are of limited assistance in identifying the duties owed by a receiver to a mortgagor. The agency is peculiar in a number of respects including the fact that the mortgagor has no say in the appointment or identity of the receiver, cannot give the receiver any instructions, and cannot dismiss him. Furthermore, there is no contractual relationship or duty owed in tort. The receiver's primary duty is to get the debt repaid, he is not managing the property for the benefit of the mortgagor. So the receivers in this case were entitled, in the same way as the mortgagee, to sell the property in the condition in which it is.