Section 206: Liability of receiver

206. Liability of receiver (1) Subject to subsections (2) and (3), a receiver is personally liable— (a) on a contract entered into by the receiver in the exercise of any of his powers; and (b) for payment of wages or salary that, during the receivership, accrue under a contract of employment relating to the property in receivership and entered into before his appointment if notice of the termination of the contract is not lawfully given within 14 days after the date of appointment. (2) The terms of a contract referred to in subsection (1) (a) may exclude or limit the personal liability of the receiver other than a receiver appointed by the Court. (3) The Court may, on the application of a receiver, made before the end of the period of 14 days, extend the period within which notice of the I14 – 119 [Issue 3] Insolvency Act termination of a contract is required to be given under subsection (1) (b) and may extend that period on such terms and conditions as the Court thinks fit. (4) Subject to subsection (6), a receiver is personally liable, to the extent specified in subsection (5), for rent and any other payments becoming due under an agreement subsisting at the date of his appointment relating to the use, possession or occupation by the chargor of property in receivership. (5) The liability of a receiver under subsection (4) is limited to that portion of the rent or other payments which is attributed to the period commencing 14 days after the date of appointment of the receiver and ending on— (a) the date on which the receivership ends; or (b) the date on which the chargor ceases to use, possess or occupy the property, whichever occurs earlier. (6) The Court may, on the application of a receiver— (a) limit the liability of the receiver to a greater extent than that specified in subsection (5); or (b) excuse the receiver from the liability under subsection (4). (7) Nothing in subsection (4) or (5)— (a) shall be taken as giving rise to an adoption by the receiver of an agreement referred to in subsection (4); or (b) shall render a receiver liable to perform any other obligation under the agreement. (8) A receiver is entitled to an indemnity out of the property in receivership in respect of his personal liability under this section. (9) Nothing in this section— (a) limits any other right of indemnity to which a receiver may be entitled; (b) limits the liability of a receiver on a contract entered into without authority; or (c) confers on a receiver a right to an indemnity in respect of liability on a contract entered into without authority.