A. The Status of the Receiver

• Author: Roderick J. Wood
• Profession: Faculty of Law. University of Alberta
• Pages: 494-496

Contenidos

• 1) The Traditional View.
• 2) The Effect of the Personal Property Security Acts.

Page 494

1) The Traditional View

Historically, there was a significant difference in the status of a court-appointed receiver and the status of a privately appointed receiver. A court appointed receiver has an independent status, and he or she does not act as agent of either the secured creditor or the debtor.¹A privately appointed receiver acts as an agent of either the secured creditor or the debtor depending on the function undertaken by the receiver.²

In managing the business, the receiver acts as agent for the debtor; in realizing the security, the receiver acts as agent of the secured creditor. This difference was significant in its legal effect. A court-appointed receiver enters into new contracts with third parties as a principal. The court-appointed receiver therefore becomes personally liable on the contracts³but has a right of indemnity from the assets under receiver-ship.⁴A privately appointed receiver enters into new contracts as agent of the debtor and therefore does not become personally liable on them.

Page 495

As well, a court-appointed receiver is an officer of the court, whereas a privately appointed receiver does not have this status.

This status of a privately appointed receiver has not been directly changed by statute. However, it is possible that provincial personal property security legislation has modified the powers and duties owed by the privately appointed receiver to such an extent that it is better to view the privately appointed receiver as having the same independent status as a court-appointed receiver.

2) The Effect of the Personal Property Security Acts

Personal property security legislation has been adopted in every Canadian common law jurisdiction. These statutes contain provisions that govern receiverships. The legislative provisions in most of these jurisdictions regulate receiverships in the following manner.⁵First, they provide that the receiver may take possession and control of the assets and may manage the business if appointed as a receiver and manager. Second, they give a court the power to appoint, replace, and discharge receivers and give directions to them. These powers are not restricted to court-appointed receivers. It is thus possible for an interested party to seek a court order replacing a privately appointed receiver, or for a privately appointed receiver to apply to court for directions...