COMMONS AMENDMENT (Hansard, 11 September 1972)

§ LORD DRUMALBYN

My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 2. With permission, I ask leave to discuss Amendments Nos. 2 to 13 inclusive together.

Clause 13 deals with the manner in which a receiver is to be appointed by the holder of a floating charge, the registration of the instrument of appointment and the date when the appointment becomes effective. As the clause now stands, the first step in the appointment of a receiver is for the holder of the floating charge to execute an instrument of appointment. The second step is for the holder, or someone acting on his behalf, within 14 days of the execution of the instrument to send a certified copy of it to the Registrar of Companies; and the third step is for the Registrar to enter the particulars of the appointment in his register of charges and to issue a certificate of the appointment of the receiver.

Subsection (5) provides that the receiver shall be held to be appointed only when the Registrar issues his certificate. Under the clause as drafted there could therefore be an interval, perhaps of several days, between the time when the holder of the floating charge decides to appoint a receiver and executes the instrument, and the time when the receiver is held to be appointed and able to act. There are sound practical reasons for this based on experience of receiverships in England. It is often important that a receiver should act as soon as effect is given, by executing the instrument, to a firm decision to appoint him. It is not easy to keep matters of this kind secret. Employees, managers and the company's suppliers and customers will all want to 26 know how they stand. They are most likely to have their anxieties allayed if the receiver can immediately go to the company and take charge.

My Lords, I will deal with the Amendments in their logical rather than their statistical order. Amendment No. 6 deletes the existing subsection (5), which makes the receiver's appointment date from the issue of the Registrar's certificate, and replaces it by a new subsection which makes the appointment date from the execution by the holder of the charge of the instrument appointing the receiver. This Amendment brings the procedure into line with that in England and Wales, and the other Amendments ore really consequential.

Amendment No. 2 reduces the period within which the instrument of appointment is to be delivered to the Registrar from 14 to 7 days as in England and Wales and provides for it to be accompanied by a notice in a form to be prescribed identifying the instrument and setting out the particulars which the Registrar is required to enter on his register of charges. Seven days is the longest it is thought right to allow for the appointment to remain unpublished.

Amendment No. 3 imposes liability to a fine of £5 for every day over and beyond seven days that the instrument of appointment is not delivered to the Registrar—the same penalty as in Section 102 of the Companies Act, 1948. As the validity of the Receiver's appointment is no longer to depend on the issue of a certificate of registration, the words which Amendments 4, 5 and 7 seek to leave out are no longer needed, and in Amendment 7 the words "on the appointment of a receiver under (this section)"are substituted.

Amendments Nos. 8 and 13 make parallel changes to Clause 14 to cover cases where a receiver is appointed by the court. I beg to move.