F. Court Supervision of the Receivership

• Author: Roderick J. Wood
• Profession: Faculty of Law. University of Alberta
• Pages: 484-486

Page 484

Courts had very little ability at common law to supervise the conduct of a privately appointed receiver. There was no convenient mechanism

Page 485

by which interested parties could seek the intervention of the court.⁵⁶

Although other parties with an interest in the property under receiver-ship might seek to obtain an injunction to prevent anticipated harmful conduct, they usually were left in the dark concerning the activities of the receiver. The reality was that they had little opportunity to intervene. The courts therefore did not play an active role in the supervision of the receivership. Instead, they became involved after the fact when litigation was commenced alleging wrongful conduct on the part of the secured creditor or the receiver. The position was entirely different where a court-appointed receiver was involved. The receiver was an officer of the court, and the court had the power to control the conduct of the receivership. This provided interested parties with the means to obtain information concerning the receivership and to have issues brought before the court.

Provincial and federal legislation has significantly altered the common law position and given courts a general supervisory power over both court-appointed and privately appointed receivers. The personal property security statutes and the business corporations statutes give courts the power to make the following orders:⁵⁷· an order removing, replacing, or discharging a receiver;

· an order giving directions on any matter relating to the duties of the receiver;

· an order approving the accounts or fixing the remuneration of a receiver;

· an order requiring the receiver or the secured creditor to make good any default in connection with the receiver’s custody or management of the property and business;

· an order relieving a receiver or secured creditor from any default on such terms as the court thinks fit; and

· an order confirming any act of the receiver.

The personal property security statutes also provide that a court has the same power to make orders in respect of privately appointed receivers as it has in respect of court-appointed receivers.⁵⁸

Page 486

These statutory provisions have their greatest effect on privately appointed receivers, since courts were already able to exercise most of these powers in respect of court-appointed receivers. In some cases, the statutory powers given to the court are wider than those that were formerly available...