High Court considers meaning of ‘acting by the Receivers’—TBAC Investments v Valmar Works

High Court considers meaning of ‘acting by the Receivers’—TBAC Investments v Valmar Works

In TBAC Investments Ltd v Valmar Works Ltd the High Court considered the validity of a notice to complete a property sale agreement, including who was the proper party to the sale agreement who could give such a notice, in circumstances where receivers were appointed over the property in question.

Original news

TBAC Investments Ltd v Valmar Works Ltd [2015] EWHC 1213 (Ch), [2015] All ER (D) 10 (May)

The claimant had defaulted on a loan from a bank and receivers had been appointed in respect of its properties, which were charged to the bank (the properties). The claimant, with the receivers acting as agents, had entered into a contract for the sale of the properties to the defendant. The completion of the sale did not take place by the specified date and the claimant’s solicitors served the defendant with a notice to complete, under the sale contract. The defendant failed to complete within the specified time and the claimant rescinded the sale contract and the premises were sold to another party at auction. The claimant sought declarations that, among other things, the contract had been terminated by rescission. The claimant applied for summary judgment. The issue was whether a valid notice to complete had been served in accordance with the sale contract.

The Chancery Division, in granting the application, held that the notice had been a valid notice to complete and that the claimant had been entitled to and had rescinded the sale contract. The proper ‘party’ to the sale contract who could give a notice to complete was the seller (the claimant) and not the claimant acting through the receivers.

What was the background to the case?

TBAC acquired certain commercial premises (together the Property) with the benefit of a bank loan which was secured by a legal charge over the Property. TBAC defaulted on the loan, following which the bank appointed receivers (the Receivers)

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