Section 316 (a) is designed to give statutory backing to what up to now has been "best practice" based among other things on a series of court judgments over the years as to the duties of a receiver.
Subsection (2) qualifies the provisions of subsection (1) and rules out the availability of certain defences which would ordinarily be available to a receiver, either arising from the instrument on the basis of which he was appointed, or under statute law.
When the Bill was originally published, the introductory sentence to subsection (2) was identical to that now proposed by Deputies Bruton and Barrett in amendment No. 209. We introduced an amendment at Committee Stage in the Seanad to replace that wording with the present wording for two reasons.
First, we considered it unwise that a receiver's duty to obtain "best price" under this section should be regarded as a duty owed to the company. If we left it as it was, then the company would be the only party which could take an action against the receiver for breach of his duty under the section.
In fact, we consider that those likely to be aggrieved at the receiver selling assets at an under-value are more likely to be other parties, for example the debentureholder, or other creditors who may find their position worsened as a result of such a sale, or indeed even members or contributories of the company.
This was the first reason why we changed the duty from being one owed to the company to a general one. This would leave the way open for any aggrieved party who could show he was owed a duty of care by the receiver to take an action against him.
Second, the phrase "any other enactment or rule of law" was deleted. When the Bill was originally prepared, this phrase was put in as a kind of "safety net", just in case there were any other provisions of law that might conflict with this subsection. Following examination of the matter, we did not find any other such enactments or rule of law which might be relevant here and accordingly it was considered appropriate to delete the phrase.
From the foregoing, the Deputies will understand that I cannot accept their amendment. However, in looking at the section following the amendments made in the Seanad I am concerned that section 147 (2) (a) could have an unintended effect and I am satisfied that it should have been amended by the deletion of the words. . . "by the company" in line 8, page 119. The retention of these words means that, while a claim by a receiver that he was merely the agent of the company will not succeed when the court proceedings were brought by the company, it would succeed where the proceedings were brought by anyone else. I would not want section 147 (2) (a) to have such a limiting effect and the amendment I have tabled would, accordingly, remove the words "by the company" from the subsection.
