Glatt, R (on the application of) v Sinclair

Permission to pursue a claim against a court-appointed receiver is discretionary. It should be granted only where the proposed claim is genuine and the allegations call for an answer, while protecting the receiver from vexatious or harassing litigation.

A receiver is not an insurer of the market price. The relevant question is whether reasonable steps were taken to obtain that price. Negligence requires conduct plainly outside the range of what a competent receiver, acting with ordinary care and on competent advice, might do. Unsupported hindsight criticisms of valuation, marketing or timing do not meet that threshold.

The claimant sought permission to continue a negligence or breach of duty claim against the defendant, a court-appointed receiver under the Criminal Justice Act 1988. The claim concerned the sale of property for £330,000, followed shortly afterwards by its resale at a substantially higher price.

The claimant alleged that the receiver had sold at an undervalue and that the estate agent involved in the sale may have had an improper connection with the purchaser. The court considered whether the proposed claim had a realistic prospect of success and whether permission should be granted.

1. Permission refused. The claim had no realistic prospect of success and was doomed to fail.

2. The court’s discretion to permit proceedings against a court-appointed receiver is governed by the approach stated in McGowan v Chadwick and Grant [2002] EWCA Civ 1758. Permission requires a genuine claim, meaning allegations that call for an answer. The discretion must balance protection of the receiver against the need to ensure that justice is done.

3. The receiver’s duties required honesty, a proper purpose and reasonable care in executing decisions. The receiver was not required to guarantee that the property would realise the highest possible price. The relevant question was whether reasonable steps had been taken to obtain the market price. A receiver is not negligent merely because a different course later appears preferable. Liability requires conduct plainly on the wrong side of the line: the receiver must act consistently with a respectable, responsible and reasonable practice having a logical basis.

4. The receiver obtained a competent valuation from experienced surveyors and obtained corroboration from another expert valuer. The court found no basis for treating either valuation as manifestly flawed. The property was marketed through an apparently competent and honest estate agent.

5. Complaints about timing, the number and location of agents, the terms of the agency arrangement and the absence of a separate investigation into the property’s condition were insufficient. They were matters within the receiver’s fair and reasonable discretion and were unsupported by evidence of wholly unreasonable conduct. Allegations of an improper connection between the purchaser and the estate agent remained tenuous and did not show that the receiver or valuers had notice of misconduct.

6. Costs were ordered subject to section 11 of the Access to Justice Act. Permission to appeal was refused because no point of law arose.

This was a first-instance application in the Administrative Court. No appellate history is stated in the judgment.