Raja v Austin Gray (a firm) [2002] EWCA Civ 1965
ADMINISTRATIVE RECEIVERS – DUTY OF CARE – EQUITY OF REDEMPTION – MORTAGGEES’ POWERS AND DUTIES – POWER OF SALE – VALUATION
Facts
D had secured borrowings from a bank by a debenture, under the terms of which administrative receivers of D’s assets were appointed. D became entitled to exercise its power of sale over the properties, and the receivers instructed A to value them and assist in their sale. The proceeds did not discharge R’s debt to D, and R brought an action against the receivers and D alleging the sale had been at an undervalue. R’s debt to D was extinguished by settlement of the action, and R then began the claim against A.
Issues
The primary issue raised on appeal was whether, and in what circumstances, valuers appointed by administrative receivers of a company owe a duty of care to the owner of properties when those properties are charged to the company as a security for a loan and the valuers are appointed by the receivers for the purposes of valuing those properties
Decision/Outcome
In finding for [A] the Court of Appeal held that the receivers did in fact owe a duty in equity to R as the legal and beneficial owner of the properties and as somebody with an interest in the equity of redemption; Medforth v Blake [1999] EWCA Civ 1482 applied. Moreover, if V had been negligent in valuing the properties, R and D would have been in breach of their duty to [A] to take reasonable care to obtain the best possible price; A receiver or mortgagee could not escape such liability by asserting that he had retained a competent professional to assist in exercising the power of sale.
Updated 20 March 2026
This case note covers Raja v Austin Gray (a firm) [2002] EWCA Civ 1965, a Court of Appeal decision concerning the duties owed by valuers appointed by administrative receivers in the exercise of a power of sale. The core legal principles remain good law. The equitable duty on mortgagees and receivers to take reasonable care to obtain the best possible price when exercising a power of sale continues to be recognised, and Medforth v Blake [1999] EWCA Civ 1482, applied in this case, remains authoritative on the scope of that duty.
Readers should note, however, that the regime of administrative receivership has significantly contracted since 2002. The Enterprise Act 2002 (in force from 15 September 2003) abolished the right to appoint an administrative receiver in most cases, restricting it to certain capital market, project finance, and other specified transactions under sections 72A–72H of the Insolvency Act 1986. Administration under Schedule B1 to the Insolvency Act 1986 is now the primary collective insolvency procedure in the vast majority of cases. Administrators owe somewhat different duties, and the practical context in which the Raja v Austin Gray principles would arise is therefore considerably narrower today than when the case was decided. The underlying principles regarding valuers’ potential liability and the duty to obtain the best price remain relevant where administrative receivership or mortgagee sale still occurs, and may also inform analysis in analogous contexts.
The article also contains apparent drafting inconsistencies in the use of the parties’ labels (R, D, A, and V are not always applied consistently), which may cause some confusion when reading the case summary, though this does not alter the legal principles stated.
