Silven Properties v Royal Bank of Scotland plc [2004] 1 WLR 997
Receiver appointed in relation to mortgaged property adopted fiduciary duty of care
Facts
The claimant was a property company which had several mortgaged properties with the defendant bank. The claimants defaulted and receivers were appointed as specified in the mortgage deed. All the properties were sold. The claimants alleged that they were sold by the receivers at an undervalued price.
Issue
The claims were dismissed at first instance. The claimant was granted permission to appeal against the receivers with respect to their role in the sale of six of the properties. The claimants argued that the receivers had, inter alia, failed to pursue planning applications in relation to the properties and had failed to find tenants for vacant properties.
Held
The appeal was dismissed. The appointed receiver had different duties than the defendant bank. Whilst the receiver was required to account to the claimant, the receiver’s primary duty was to ensure that the mortgage debt was repaid in full. The receivers had assumed a fiduciary duty of care which was owed to the bank, the claimants and others who may be interested in the equity of redemption. The nature of the fiduciary duty is not affected to the special character of agency between the parties, whereby the receivers were appointed as agents of the claimants. It was within the discretion of the receivers to sell the property without attempting to increase its value. Accordingly, the receivers were entitled to halt applications for planning permission and there could be no imposition on the receivers of the obligation to take certain pre-marketing steps as was contended by the claimants.
267 words
Updated 20 March 2026
This case summary accurately reflects the decision in Silven Properties Ltd v Royal Bank of Scotland plc [2004] EWCA Civ 1502, [2004] 1 WLR 997. The Court of Appeal’s core holdings — that a receiver’s primary duty is to repay the mortgage debt, that receivers owe an equitable duty of care to the mortgagor and others interested in the equity of redemption, and that receivers have a discretion to sell without first taking steps to increase value (such as pursuing planning applications or finding tenants) — remain good law.
One point of terminology in the article warrants attention for student readers: the courts and leading commentators generally describe the relevant duty owed by a mortgagee and receiver as an equitable duty of care (sometimes called a duty of good faith), not strictly a “fiduciary” duty in the technical sense. This distinction was noted in Silven itself and in earlier authorities such as Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949. The practical effect described in the summary is nonetheless correct.
The principles have been consistently applied in subsequent case law and no legislation has materially altered the position as it applies to receivers appointed under a mortgage deed. The Law of Property Act 1925, which underpins much of this area, remains in force without relevant amendment on these points. Students should be aware that the Mortgage Repossessions (Protection of Tenants etc) Act 2010 introduced additional protections for tenants of mortgaged properties, though this does not affect the core duties of receivers as described in the article.
