The High Court dismissed Independent Trustee Company Limited’s challenge to the filing of a notice that receivers had been appointed over property it held as trustee for a pension fund.
In a judgment delivered on 16 January 2015, Mr Justice Tony Hunt held that the Companies Act 1963 required notification of the appointment. The receivers had been appointed over one property, not over the trustee company or its wider business. The court did not grant the injunctions or declaration the company sought.
The dispute concerned Gloucester House, 399 Silbury Boulevard, Milton Keynes, England. The property was held by Independent Trustee Company for Delta Fund 704530. West Bromwich Commercial Limited had advanced £4.088 million to the sub-fund to finance its purchase. The trustee granted the lender a charge over its legal interest in the property. After the lender asserted that a loan-to-value condition had been breached, it appointed two receivers over the property and its income in July 2011.
The lender filed a Form E8 with the Registrar of Companies, as required under section 107(1) of the 1963 Act. Registering the form would trigger a change in the company’s recorded status to “Receivership”. The registrar agreed to leave the status unchanged while the case was pending. The company argued that the receivership concerned trust property, not its own property, and that the status label risked giving the public a misleading impression about its financial position.
The judge accepted that a single “Receivership” label could fail to show the extent of an appointment over only part of a company’s property. He said the registrar’s explanatory note, which directs readers to the relevant Form E8 for details, addressed that concern. The judgment also said receivership does not necessarily mean a company is insolvent.
But the court rejected the company’s argument that the statutory term “property” excluded its legal interest because the asset was held on trust. The company had chosen to hold legal title in its own name and had charged that interest to secure the purchase loan. The judge concluded that the 1963 Act’s provisions covered that interest and the appointment of receivers over it. He found no ambiguity or absurdity that would justify the narrower interpretation urged by the company.
The judgment addressed the statutory interpretation dispute and dismissed the claim. It did not order that the company’s status be changed; the registrar had agreed to defer any change pending the trial.