Downsview Nominees Ltd v First City [1993] AC 295

Written By Nicolas Heyes

Privy Council

Basic Facts: The case dealt with the duties of a mortgagee in possession, particularly the duty to act in good faith and avoid causing unnecessary loss to the mortgagor.

Issue for the Court: What duties does a receiver owe to the mortgagee and mortgagor?

Held: The Privy Council held that mortgagees have a duty to act in good faith when appointing receivers but do not owe a general duty of care to the mortgagor.

Lord Templeman

  • A receiver, although an agent of the mortgagor, owes a duty to both the mortgagee and the mortgagor.

  • Must act in good faith to secure repayment for the mortgagee and avoid actions disadvantageous to the mortgagor.

Nicolas Heyes
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