D. Duties of the Receiver

• Author: Roderick J. Wood
• Profession: Faculty of Law. University of Alberta
• Pages: 507-509

Contenidos

• 1) The Nature of the Duties.
• 2) Accounting and Reporting Obligations of the Receiver.

Page 507

1) The Nature of the Duties

A court-appointed receiver is an officer of the court and acts in a fiduciary capacity in relation to all parties who have an interest in the assets under receivership.⁵⁷He or she is not subject to the control or direction of the secured creditor and is under an obligation to make the same information available to all the parties.⁵⁸The standard of care expected of a court-appointed receiver at common law is that which a reasonable person would exercise in respect of his or her own property or business.⁵⁹Under the common law, a much less extensive duty was imposed on a privately appointed receiver. The privately appointed receiver’s duties were owed primarily to the secured creditor who appointed the receiver, although the receiver also owed a more limited duty to the debtor and to persons holding lower-ranking interests in the assets to act in good faith and to obtain the best price reasonably obtainable.⁶⁰A major difference between the duties owed by the court-appointed receiver and those exercised by the privately appointed receiver at common law was that a court-appointed receiver must consider the interests of all persons who have an interest in the assets, while the privately appointed receiver need consider only the interests of the secured creditor. Third parties had no right to complain about the timing of the sale despite the fact that a temporary delay might greatly benefit other interested parties without any detriment to the interests of the secured creditor.⁶¹

The common law position likely has been altered by statute. The BIA as well as provincial personal property security legislation and business corporations legislation impose an obligation on a receiver to act in good faith and in a commercially reasonable manner.⁶²This statutory duty of care is expected both of court-appointed and of pri-

Page 508

vately appointed receivers. Furthermore, a privately appointed receiver may seek directions from a court, and this procedure may be used if the receiver is uncertain about the appropriate course of conduct where the interests of the stakeholders are in conflict. It is therefore reasonable to think that courts will assimilate the duties owed by both types of receivers, and hold that the privately appointed receiver now owes the same duty to other interested parties as that owed by a...