Together Commercial Finance v Slack: receivers free to sell despite mental health crisis moratorium

Receivers appointed over a third party's property may proceed to sell it notwithstanding a mental health crisis moratorium in favour of the owner, the Circuit Commercial Court in Leeds has held, in the first reported consideration of how the Debt Respite Scheme regulations engage with a chargor who is not the borrower.

In Together Commercial Finance Ltd v Slack [2026] EWHC 1732 (Comm), handed down on 17 July 2026, HH Judge Klein, sitting as a High Court judge, granted summary judgment and declared that a sale by Law of Property Act receivers of Farley Meadow View, Matlock, would not be prevented by the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, nor rendered null and void under regulation 7(12).

Together lent Ameycroft Leisure Ltd £2.4 million in August 2023, secured by a debenture, a charge over Bent Farm, a personal guarantee from the borrower's director, and a charge over Farley Meadow View, owned by the director's son, Matthew Slack. The company defaulted, demand was made in June 2024, and receivers were appointed. The company entered compulsory liquidation. Mr Slack entered a mental health crisis moratorium in April 2026 through Toynbee Hall as his debt advice provider, and contended that a sale would amount to prohibited enforcement action.

The outcome turned on the construction of the charge. Judge Klein held that clause 2.1(a) contained an absolute covenant to pay, which gave rise to a debtor and creditor relationship between Mr Slack and Together, following Evans v Jones (1839). The limited recourse wording in clause 2.1(b) did not alter the nature of that relationship. Critically, however, the charge secured only the "Secured Liabilities", defined as the company's obligations. Mr Slack had therefore charged the property to secure the company's indebtedness alone, and not his own. Clause 9 pointed the same way, directing proceeds to the company's liabilities, and the definition of "Security Asset" suggested a document drafted for use where chargor and borrower coincide.

That construction proved decisive under the regulations. Mr Slack's own liability under the covenant was a qualifying debt, since it was not a secured debt: Together provided him no credit under the charge and the charge secured nothing of his. It followed, information having been supplied to the Secretary of State, that his personal liability was a moratorium debt. The company's liability, by contrast, could not be a moratorium debt, not having been incurred by a debtor in relation to whom a moratorium is in place. As regulation 7 operates only in relation to moratorium debts, and the charge is not held in respect of one, a sale would not be enforcement action.

The judge declined to resolve two further questions, describing the regulations' drafting as containing obvious problems and citing Sir Anthony Mann's observation in Seculink Ltd v Forbes that it "is impossible to admire". Whether regulation 7(2) extends to a creditor's agents despite naming only creditors was, he said, well arguable, as was the proposition that receivers appointed to collect a moratorium debt fall within the extended definition in regulation 12(6), notwithstanding their status as the mortgagor's agents under section 109(2) of the Law of Property Act 1925. Those points were not suitable for summary determination.

Together's alternative applications failed. A regulation 7 order was unavailable, and the judge rejected the submission that absence of detriment necessarily means the protections of a moratorium are not significantly undermined, which would leave regulation 7(5)(b)(ii) without purpose. The regulation 19 cancellation application also failed, no material irregularity having occurred, and the judge doubted the High Court's jurisdiction to cancel at all.

Costs and consequential matters will be determined on paper.