Standard Chartered Bank Ltd v Walker [1982] 3 All ER 938
MORTGAGEES – SALE OF LAND – SALE BY MORTGAGEE – DUTY TO GUARANTOR – EXTENT OF LIABILITY
Facts
A company issued to P, a bank, a debenture giving P a charge over the company’s assets in respect of any sums then or in future owing to P. The debenture empowered P to appoint a receiver with a provision that any receiver so appointed was to be deemed the company’s agent and that the company alone would be responsible for his acts or defaults. In November 1980 P appointed a receiver who engaged auctioneers to hold a sale of the company’s stock. As the auction was held on a cold day in February the proceeds of sale was entirely absorbed by the expenses of realisation and preferential debts other than that of P. P claimed the sums guaranteed by D and D subsequently brought an action against P, alleging the sale was poorly organised and realised at a gross undervalue.
Issues
Whether a receiver realising assets under a debenture owed a duty to both the borrower and the guarantor of the debt to exercise reasonable care and judgement to obtain the best price available for those assets; Whether the holder of a debenture could be liable for the actions of a receiver if the process of receivership was interfered with.
Decision/Outcome
A receiver realising assets under a debenture owed a duty both to the borrower and to a guarantor of the debt to take reasonable care to obtain the best price that circumstances permitted, and that a duty was also owed to exercise reasonable care in choosing the time for the sale. Despite the receiver being deemed the company’s agent, P, as holder of the debenture, might have responsibility for the receiver’s actions if it were shown that it interfered with the conduct of the receivership. As these were triable issues D would be granted unconditional leave to defend.
Updated 21 March 2026
This case summary accurately reflects the decision in Standard Chartered Bank Ltd v Walker [1982] 3 All ER 938. The core legal principles remain good law. The duty of a mortgagee and a receiver to take reasonable care to obtain the best price reasonably obtainable on a sale has since been confirmed and developed in later authorities, most notably Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 (which predates this case and was applied in it) and Medforth v Blake [2000] Ch 86, which extended the duty of care owed by receivers to the conduct of a business, not merely sale of assets. The position in England and Wales is now also partly governed by statute: section 109 of the Law of Property Act 1925 and, importantly, the Law of Property Act 1925 as supplemented by the Financial Collateral Arrangements (No.2) Regulations 2003 in certain contexts. Students should note that for administrative receivers and administrators, the Insolvency Act 1986 and subsequent case law (including Re B Johnson & Co (Builders) Ltd [1955] Ch 634 and later decisions) are also relevant. The article does not address these later statutory and case law developments, so readers should treat it as a foundational case note and consult more recent sources for a complete picture of the current law on receivers’ duties.
