Carver v MacJohn and Others (Civil Case No. 13 of 1937) [1938] EACA 179 (1 January 1938)

#### ORIGINAL CIVIL

#### Before LUCIE-SMITH, J.

#### CECIL CHARLES CARVER,

#### As Receiver of the Debenture Holders of Martin Hart, Limited. Plaintiff

v.

## MACKIE MACJOHN, FREDERICK ARTHUR BEMISTER,

# W. E. CROSS AND GEORGE HARMAN,

## Defendants

### Civil Case No. 13 of 1937

Distress—Receiver for the Debenture Holders appointed after distress -Claim by Receiver for goods alleged to be distrained—Right of Receiver to sue in his own name.

A company created a floating charge over its property and assets by means of a debenture in favour of a creditor. The Grantor Company was in arrear with its rent and the landlord purported to distrain on the chattels found on the grantor's premises for the rent. The debenture holder then appointed a receiver under the debenture, who claimed those chattels from the landlord, and on restoration being refused sued in his own name the landlord and others for their return.

Held (25-11-39).—That the receiver had no right to sue in his own name.

#### Bryson for Plaintiff.

Atkinson for Defendants.

JUDGMENT.-The plaintiff herein sues as Receiver of the debenture holders of Martin Hart, Ltd.

On 8th June, 1936, Martin Hart, Ltd., a limited liability company gave a debenture deed to Cecil Charles Carver and Edmund Norman Moskow. By this deed the company charged with the payment of Sh. 61,208/25 and interest all its undertaking and all its property.

On 22nd January, 1937, all right, title and interest in this debenture was transferred to Edmund Norman Moskow.

On 25th January, 1937, the debenture holder appointed Cecil Charles Carver to be receiver and manager of the property charged by the said debenture. Among the powers specifically given to the Receiver was that of taking possession of collecting and getting in the property charged by the debenture and for that purpose taking any proceedings in the name of the company or otherwise.

Among the property charged was certain stock in trade and effects on the premises in Mombasa where Martin Hart, Ltd. (Mombasa) carried on business. These premises were leased by the first defendant to Martin Hart and one Wilmot for a period of four years ending the 31st July, 1938.

On 16th January, 1937, the tenants owed the landlord nearly $£100$ for rent.

At about 11.30 a.m. on 16th January, 1937, the landlord through his agent Mr. Bemister purported to distrain for rent.

Under such distress the landlord seized and disposed of certain shop fittings, implements of trade, etc., which were in the shop at the time of the distress.

The plaintiff as Receiver of the debenture holders of Martin Hart, Ltd., claims damages in respect of such distress.

On 12th April, 1939, Edmund Norman Moskow executed a Deed of Appointment and Ratification to Cecil Charles Carver.

This action was commenced on 6th May, 1937.

Mr. Atkinson for all the defendants pleaded in para. 1 of his defence that the plaintiff had no right to sue as laid in the plaint.

The defence is dated 15th June, 1937.

In this Court Mr. Atkinson has argued that the receiver of a debenture holder being an agent cannot sue in his own name.

It is stated in Kerr on Receivers (9th Edition) at p. 237, that: "A receiver acquires no right of action by virtue of his appointment: he cannot sue in his own name as receiver... nor can the Court authorize him to do so. In such cases he must maintain the action in the name of the person or persons who would be entitled to sue apart from his appointment". It is otherwise in cases where the receiver acquires a right of action in the course of his receivership but not in consequence of it alone. Ex parte Sacker 22 Q. B. D. 179, and Moss S. S. Co. v. Whinney (1912) A. C. 254.

In 24 Halsbury, p. 392, section 741 reads as follows: --

"Though a receiver cannot generally maintain an action in his own name, since no property is vested in him, yet if he has an independent cause of action, the fact that he is receiver does not disqualify him from suing."

In Rhodes v. Dawson, 16 Q. B. D. 548, at p. 554, Lindley L. J. says: "Notwithstanding a receiving order, the debtor (i.e. the person in whom the cause of action lies) is the only person who can sue for what belongs to him".

In Sartoris v. Sartoris (1892) 1 Ch. 11 at p. 14, Chitty J. says: "A receiver appointed in an action, is to take care of, and receive the property which is put under his charge. He is not at liberty, and is not entitled to bring an action in his own name, the reason being, that he has no property vested in him; and if a receiver is appointed for the purpose of getting in outstanding estate, and those in whose hands the outstanding estate is decline to pay him, it is generally necessary that an action should be brought, and where the action has to be brought, it is not brought in the name of the receiver, but in the name of the party to the action who has the legal or equitable title on which action is founded. I consider these points to be clear."

This case went to the Court of Appeal and Lindley L. J. in his judgment says at p. 22: "The fallacy of the appellant's argument is that as income to which the debtor is entitled does not vest in the receiver and so he cannot sue for it in his own name, therefore the debtor is still the party to receive it." The appeal was dismissed.

The question of trusteeship was not pleaded and need not be considered here.

Mr. Bryson for the plaintiff found himself unable to resist Mr. Atkinson's argument as regards a receiver's title to sue and asks the Court to exercise its discretion under Order I. Rule 10, and substitute "Martin Hart, Ltd." for the present plaintiff—he referred to Mulla's commentary.

I have no doubt that the suit was instituted through a bona fide mistake but the plaintiff as soon as he received the defence had notice of such mistake and in my opinion it was for him to take immediate steps to rectify such mistake. Instead of taking such proper steps he would appear to have attempted to remedy matters by obtaining the Deed of Appointment and Rectification to which I have already referred.

In all the circumstances of the case I do not consider that this is a case in which the Court should interfere at so late a time. For the above reasons the suit is dismissed with costs to the defendants.