Post-Maymask, Cecily Crampin & Tricia Hemans consider the effect of mortgage receivership on company directors’ powers to deal with property
- Ghai v Maymask (228) Ltd [2020] UKUT 293 (LC): does the appointment of a receiver act to suspend the director of a company borrower’s authority to effect a valid sale of the property so that only the receiver can sell or so that the borrower can only sell with the receiver’s consent?
In a typical sale of mortgaged property, the owner of the property sells it to a buyer in his own name and then uses the purchase money provided by the buyer to pay off the mortgage so that the property acquired by the buyer is free of the mortgage. But what about the situation where a receiver has been appointed before the sale? Does the borrower retain the ability to execute a valid transfer to the buyer?
It is clear that the borrower has a power of sale by reason of his ownership of and registration
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