50. Extent of this Chapter51. Power to appoint receiverThis Chapter extends to Scotland only.
52. Circumstances justifying appointment(1) It is competent under the law of Scotland for the holder of a floating charge over all or any part of the property (including uncalled capital), which may from time to time be comprised in the property and undertaking of an incorporated company (whether a company within the meeting of the Companies Act or not) which the Court of Session has jurisdiction to wind up, to appoint a receiver of such part of the property of the company as is subject to the charge.
(2) It is competent under the law of Scotland for the court, on the application of the holder of such a floating charge, to appoint a receiver of such part of the property of the company as is subject to the charge.
(3) The following are disqualified from being appointed as receiver -
(a) a body corporate;
(b) an undischarged bankrupt; and
(c) a firm according to the law of Scotland.
(4) A body corporate or a firm according to the law of Scotland which acts as a receiver is liable to a fine.
(5) An undischarged bankrupt who so acts is liable to imprisonment or a fine, or both.
(6) In this section, "receiver" includes joint receivers.
53. Mode of appointment by holder of charge(1) A receiver may be appointed under section 51(1) by the holder of the floating charge on the occurrence of any event which by the provisions of the instrument creating the charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely -
(a) the expiry of a period of 21 days after the making of a demand for payment of the whole or any part of the principal sum secured by the charge, without payment having been made;
(b) the expiry of a period of 2 months during the whole of which interest due and payable under the charge has been in arrears;
the making of an order or the passing of a resolution to wind up the company;
(d) the appointment of a receiver by virtue of any other floating charges created by the company.
(2) A receiver may be appointed by the court under section 51(2) on the occurrence of any event which, by the provisions of the instrument creating the floating charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely -
(a) where the court, on the application of the holder of the charge, pronounces itself satisfied that the position of the holder of the charge is likely to be prejudiced if no such appointment is made;
(b) any of the events referred to in paragraphs (a) to of subsection (1).
54. Appointment by court(1) The appointment of a receiver by the holder of the floating charge under section 51(1) shall be by means of an instrument subscribed in accordance of the Requirements of Writing (Scotland) Act 1995 ("the instrument of appointment"), a copy (certified in the prescribed manner to be a correct copy) whereof shall be delivered by or on behalf of the person making the appointment to the registrar of companies for registration within 7 days of its execution and shall be accompanied by a notice in the prescribed form.
(2) If any person without reasonable excuse makes default in complying with the requirements of subsection (1), he is liable to a fine and, for continued contravention, to a daily default fine.
(Sub-s 5: words in italics repealed by the Companies Act 1989 , ss107, 212 Sch 16, para 3(1),(3),Sch 24, as from day to be appointed.)
(3) ...
(Sub-s (3): repealed by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, s74, Sch 8, Pt II, para 35, Sch 9, as from 1 December 1990.)
(4) If the receiver is to be appointed by the holders of a series of secured debentures, the instrument of appointment may be executed on behalf of the holders of the floating charge by any person authorised by resolution of the debenture-holders to execute the instrument.
(Sub-s (4): substituted by the Requirements of Writing (Scotland) Act 1995, s 14(1), Sch4, para 58(b), as from 1 August 1995.)
(a) by any person duly authorised in writing by the holder to execute the instrument, and
(b) in the case of an appointment of a receiver by the holders of a series of secured debentures, by any person authorised by resolution of the debenture holders to execute the instrument.
(5) On receipt of the certified copy of the instrument of appointment in accordance with subsection (1), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register of charges.
(6) The appointment of a person as a receiver by an instrument of appointment in accordance with subsection (1) -
(a) is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and
(b) subject to paragraph (a), is deemed to be made on the day on and at the time at which the instrument of appointment is so received, as evidenced by a written docquet by that person or on his behalf;
and this subsection applies to the appointment of joint receivers subject to such modifications as may be prescribed.
(7) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attache to the property then subject to the charge; and such attachment has effect as if the charge was a fixed security over the property to which it has attached.
55. Powers of receiver(1) Application for the appointment of a receiver by the court under section 51(2) shall be by petition to the court, which shall be served on the company.
(2) On such an application, the court shall, of it thinks fit, issue an interlocutor making the appointment of the receiver.
(3) A copy (certified by the clerk of the court to be a correct copy) of the court's interlocutor making the appointment shall be delivered by or on behalf of the petitioner to the registrar of companies for registration, accompanied by a notice in the prescribed form, within 7 days of the date of the interlocutor or such longer period as the court may allow.
If any person without reasonable excuse makes default in complying with the requirements of this subsection, he is liable to a fine and, for continued contravention, to a daily default fine.
(4) On receipt of the certified copy interlocutor in accordance with subsection (3), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register of charges.
(5) The receiver is to be regarded as having been appointed on the date of his being appointed by the court.
(6) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attache to the property then subject to the charge; and such attachment has effect as if the charge were a fixed security over the property to which it has attached.
(7) In making rules of court for the purposes of this section, the Court of Session shall have regard to the need for special provision for cases which appear to the court to require to be dealt with as a matter of urgency.
56. Precedence among receivers(1) Subject to the next subsection, a receiver has in relation to such part of the property of the company as is attached by the floating charge by virtue of which he was appointed, the powers, if any, given to him by the instrument creating that charge.
(2) In addition, the receiver has under this Chapter the powers as respects that property (in so far as these are not inconsistent with any provision contained in that instrument) which are specified in Schedule 2 to this Act.
(3) Subsections (1) and (2) apply -
(a) subject to the rights of any person who has effectually executed diligence on all or part of the property of the company prior to the appointment of the receiver, and
(b) subject to the rights of any person who holds over all or any part of the property of the company a fixed security or floating charge having priority over, or ranking pari passu with, the floating charge by virtue of which the receiver was appointed.
(4) A person dealing with a receiver in good faith and for value is not concerned to enquire whether the receiver is acting within his powers.
57. Agency and liability of receiver for contracts(1) Where there are two or more floating charges subsisting over all or any part of the property of the company, a receiver may be appointed under this Chapter by virtue of each such charge; but a receiver appointed by, or on the application of, the holder of a floating charge having priority of ranking over any other floating charge by virtue of which a receiver has been appointed has the powers given to a receiver by section 55 and Schedule 2 to the exclusion of any other receiver.
(2) Where two or more floating charges rank with one another equally, and two or more receivers have been appointed by virtue of such charges, the receivers so appointed are deemed to have been appointed as joint receivers.
(3) Receivers appointed, or deemed to have been appointed, as joint receivers shall act jointly unless the instrument of appointment or respective instruments of appointment otherwise provide.
(4) Subject to subsection (5) below, the powers of a receiver appointed by, or on the application of, the holder of a floating charge are suspended by, and as from the date of, the appointment of a receiver by, or on the application of, the holder of a floating charge having priority of ranking over that charge to such extent as may be necessary enable the receiver second mentioned to exercise his powers under section 55 and Schedule 2; and any powers so suspended take effect again when the floating charge having priority of ranking ceases to attach to the property then subject to the charge, whether such cessation is by virtue of section 62(6) or otherwise.
(5) The suspension of the powers of a receiver under subsection (4) does not have the effect of requiring him to release any part of the property (including any letters or documents) of the company from his control until he receives from the receiver superseding him a valid indemnity (subject to the limit of the value of such part of the property of the company as is subject to the charge by virtue of which he was appointed) in respect of any expenses, charges, and liabilities he may have incurred in the performance of his functions as receiver.
(6) The suspension of the powers of a receiver under subsection (4) does not cause the floating charge by virtue of which he was appointed to cease to attach to the property to which it attached by virtue of section 53(7) or 54(6).
(7) Nothing in this section prevents the same receiver being appointed by virtue of two or more floating charges.
58. Remuneration of receiver(1) A receiver is deemed to be the agent of the company in relation to such property of the company as is attached by the floating charge by virtue of which he was appointed.
(1A) Without prejudice to subsection (1), a receiver is deemed to be the agent of the company in relation to any contract of employment adopted by him in the carrying out of his functions.
(2) A receiver (including a receiver whose powers are subsequently suspended under section 56) is personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and, to the extent of any qualifying liability on any contract of employment adopted by him in the carrying out of those functions.
(2A) For the purposes of subsection (2) a liability under a contract of employment is a qualifying liability if-
(a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme,
(b) it is incurred while the receiver is in office, and
(c) it is in respect of services rendered wholly or partly after the adoption of the contract.
(2B) Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (2) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under that subsection shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract.
(2C) For the purposes of subsections (2A) and (2B)-
(a) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and
(b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.
(2D) In subsection (2C)(a), the reference to wages or salary payable in respect of a period of holiday includes any sums which, if they had been paid, would have been treated for the purposes of the enactments relating to social security as earnings in respect of that period.
(3) A receiver who is personally liable by virtue of subsection (2) is entitled to be indemnified out of the property in respect of which he was appointed.
(4) Any contract entered into by or on behalf of the company prior to the appointment of a receiver continues in force (subject to its terms) notwithstanding that appointment, but the receiver does not by virtue only of his appointment incur any personal liability on any such contract.
(5) For the purposes of subsection (2), a receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.
(6) This section does not limit any right to indemnity which the receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any rights to indemnity in respect of that liability.
(7) Any contract entered into by a receiver in the performance of his functions continues in force (subject to its terms) although the powers of the receiver are subsequently suspended under section 56.
59. Priority of debts(1) The remuneration to be paid to a receiver is to be determined by agreement between the receiver and the holder of the floating charge by virtue of which he was appointed.
(2) Where the remuneration to be paid to the receiver has not been determined under subsection (1), or where it has been so determined but is disputed by any of the persons mentioned in paragraphs (a) to (d) below, it may be fixed instead by the Auditor of the Court of Session on application made to him by -
(a) the receiver;
(b) the holder of any floating charge or fixed security over all or any part of the property of the company;
(c) the company; or
(d) the liquidator of the company.
(3) Where the receiver has been paid retained for his remuneration for any period before the remuneration has been fixed by the Auditor of the Court of Session under subsection (2) any amount in excess of the remuneration so fixed for that period, the receiver or his personal representatives shall account for the excess.
60. Distribution of moneys(1) Where a receiver is appointed and the company is not at the time of the appointment in course of being wound up, the debts which fall under subsection (2) of this section shall be paid out of any assets coming to the hands of the receiver in priority to any claim for principal or interest by the holder of the floating charge by virtue of which the receiver was appointed.
(2) Debts falling under this section are preferential debts (within the meaning given by section 386 Part XII) which, by the end of a period of 6 months after advertisement by the receiver for claims in the Edinburgh Gazette and in a newspaper circulating in the district where the company carries on business either -
(i) have been intimated to him, or
(ii) have become known to him.
(3) Any persons made under this section shall be recouped as far as may be out of the assets of the company available for payment of ordinary creditors.
(1) Subject to the next subsection, and to the rights of any of the following categories of persons (which rights shall, except to the extent otherwise provided in any instrument, have the following order of priority), namely -
(a) the holder of any fixed security which is over property subject to the floating charge and which ranks prior to, or pari passu with, the floating charge;
(b) all persons who have effectually executed diligence on any part of the property of the company which is subject to the charge by virtue of which the receiver was appointed;
creditors in respect of all liabilities, charges and expenses incurred by him on behalf of the receiver;
(d) the receiver in respect of his liabilities, expenses and remuneration, and any indemnity to which he is entitled out of the property of the company; and
(e) the preferential creditors entitled to payment under section 59,
the receiver shall pay moneys received by him to the holder of the floating charge by virtue of which the receiver was appointed in or towards satisfaction of the debt secured by the floating charge.
(2) Any balance of moneys remaining after the provisions of sub- section (1) and section 61 below have been satisfied shall be paid in accordance with their respective rights and interests to the following persons, as the case may require -
(a) any other receiver;
(b) the holder of a fixed security which is over property subject to the floating charge;
(c) the company or its liquidator, as the case may be.
(3) Where any question arises as to the person entitled to a payment under this section, or where a receipt or a discharge of a security cannot be obtained in respect of any such payment, the receiver shall consign the amount of such payment in any joint stock bank of issue in Scotland in name of the Accountant of Court for behoof of the person or persons entitled thereto.