Saddique v Sadiq & Anor

A receiver appointed over another person’s assets does not thereby acquire title to them or authority to sue in the receiver’s own name, or in the owner’s name, to recover them. A receiver may sue where the receiver has an independent cause of action. The identity of the claimant is determined by the claim form and cannot be changed by statements of case. An admission of an erroneous legal assertion does not bind the court. The representative-proceedings rule for trust property does not confer a limited power of attorney enabling one person to enforce another’s rights. A possible exceptional jurisdiction to authorise a receiver to sue where no person can sue was left open, but would require a specific application.

Mrs Asma Saddique was appointed receiver over assets owned by her missing husband. She then issued proceedings in her own name against Ms Saliha Sadiq to recover money allegedly transferred without consideration, and against her husband’s business partner for an account of his partnership interest.

District Judge Lawton dismissed an application to strike out or obtain summary judgment and gave case-management directions. On appeal, HHJ Shaun Spencer QC permitted a new ground to be argued, held that the receivership appointment did not authorise Mrs Saddique to sue in her own name, and dismissed the claim. The Court of Appeal considered whether the claim was properly constituted, whether an admission in the defence was binding, whether the new point was properly admitted on appeal, and whether representative proceedings under Rule 19.7 could cure the defect.

The appeal was dismissed unanimously. Moore-Bick LJ gave the principal reasons. Buxton LJ agreed and added that any exceptional relief would require a specific application. Thorpe LJ also agreed.

1. The person who brings proceedings is the person named as claimant on the claim form. Describing that person as acting in a special capacity, or asserting in statements of case that another person’s rights are vested in them, does not change the identity of the claimant. Mrs Saddique was therefore suing in her own name and needed a legal right of action.

2. Section 37 of the Senior Courts Act 1981 gives the court jurisdiction to appoint a receiver where it is just and convenient. A receiver may preserve property pending proceedings or assist execution. The appointment alone does not vest the property in the receiver or confer general authority to sue in the receiver’s own name or in the owner’s name to recover it. A receiver may sue where the receiver has an independent cause of action. The principle that a receiver generally cannot sue in the receiver’s own name was supported by Re Sartoris’s Estate [1892] 1 Ch 11.

3. The court reserved the question whether, in special circumstances where no person could sue in the title-holder’s name, a receiver might be authorised to bring proceedings. The possible principle was drawn from McGuin v Fretts (1887) 13 O.R. 699 and a dictum referred to in Hills v Reeves 31 W.R. 209. The court had not been given a sufficient basis to decide the issue. No specific application had been made, and the present claim could not be treated as authorised on that basis. The different circumstances in ex parte Harris 2 Ch. D. 423 and the unconsidered reference to Acheson v Hodges 3 Ir. Eq. R. 522 did not alter the result.

4. The judge was entitled to permit the new point to be raised on appeal. Permission had been granted three months earlier and had not been challenged. The issue did not depend on evidence, and the appellant had suffered no procedural prejudice.

5. An admission in a defence may bind the parties as to admitted facts, but an incorrect assertion of law does not bind either the parties or the court.

6. Rule 19.7 did not provide a route to save the claim. Its representative procedure concerns claims about a deceased person’s estate, trust property, or the meaning of a document. It is intended to protect persons whose interests may be affected by proceedings concerning trust property. It does not confer a limited power of attorney to enforce another person’s rights.

7. The proceedings could not be saved at that stage except by joining the husband, which required his consent. The appeal was therefore dismissed.

1. Court of Appeal (Civil Division): dismissed the appeal against the order of HHJ Shaun Spencer QC.

2. Bradford County Court, HHJ Shaun Spencer QC: on 23 April 2009 allowed the appeal against District Judge Lawton’s order, held that the receiver could not sue in her own name, and dismissed the claim.

3. Bradford County Court, District Judge Lawton: on 7 October 2008 dismissed the first defendant’s strike-out or summary-judgment application, allocated the case to the multi-track, and gave directions.