Duties of a Court Appointed Receiver
What is a Court Appointed Receiver obligated to do?
The duties of a Court Appointed Receiver are derived mainly from the Order under which the Receiver has been appointed.
Usually the duties of the Receiver will be to (1) take possession of; and (2) preserve the assets of the Partnership, until the dispute is resolved.
The Civil Procedure Rules provide some guidance for the Receiver of a Partnership. Part 69 (6) the Rules clarify what the Receiver should do if he is lacking direction in his role:
"(1) The Receiver may apply to the court at any time for directions to assist him in carrying out his function as a receiver.
(2) The court, when it gives directions, may also direct the receiver to serve on any person -
(a) the directions; and
(b) the application for directions"
With regards to the Receiver's remuneration the Civil Procedure Rules state, Under Part 69 (7), that:
" (1) A receiver may only charge for his service if the court -
(a) so directs; and
(b) specifies the basis on which the receiver is to be remunerated.
(2) The court may specify -
(a) who is to be responsible for paying the receiver; and
(b) the fund or property from which the receiver is to recover his remuneration.
(3) If the court directs that the amount of a receiver's remuneration is to be determined by the court -
(a) the receiver may not recover any remuneration for his services without a determination by the court; and
(b) the receiver or any party may apply at any time for such a determination to take place.
(4) Unless the court orders otherwise, in determining the remuneration of a receiver the court shall award such sum as is reasonable and proportionate in all circumstances and which takes into account -
(a) the time properly given by him and his staff to the receivership;
(b) the complexity of the receivership;
(c) any responsibility of an exceptional kind or degree which falls on the receiver in consequence of the receivership.
(d) the effectiveness with which the receiver appears to be carrying out, or to have carried out, his duties; and
(e) the value and nature of the subject matter of the receivership.
(5) The court may refer the determination of a receiver's remuneration to a costs judge.
Receivership Accounts and Reports
Part 69 (8) of the Civil Procedure Rules state:
(1) The court may order a Receiver to prepare and serve accounts.
(2) A party served with such accounts may apply for an order permitting him to inspect any document in the possession of the receiver relevant to those accounts.
(3) Any party may, within 14 days of being served with the accounts, serve notice on the receiver
(a) specifying any item in the accounts to which he objects;
(b) giving the reason for such objection; and
(c) requiring the receiver, within 14 days of receipt of the notice, either -
(i) to notify all the parties who were served with the accounts that he accepts the objection; or
(ii) if he does not accept the objection, to apply for an examination of the accounts in relation to the contested item.
(4) When the receiver applies for the examination of the accounts he must at the same time file -
(a) the accounts; and
(b) a copy of the notice served on him.
(5) If the receiver fails to comply with paragraph (3)(c) of this rule, any party may apply to the court for an examination of the accounts in relation to the contested item.
(6) At the conclusion of its examination of the accounts the court will certufy the result.
What if the Receiver Does not Comply?
Part 69 (9) of the Civil Procedure Rules state:
(1) If a Receiver fails to comply with any rule, practice direction or direction of the court the court may order him to attend a hearing to emplain his non compliance.
(2) At the hearing the court may make any order it considers appropriate, including -
(a) terminating the appointment of the receiver;
(b) reducing the receiver's remuneration or disallowing it altogether; and
(c) ordering the receiver to pay the costs of any party.
(3) Where -
(a) the court has ordered a receiver to pay a sum of money into court; and
(b) the receiver has failed to do so,
the court may order him to pay interest on that sum for the time he is in default at such rate as it considers appropriate.
It is clear from the above Civil Procedures Rules that although there are 'guidelines' for Court Appointed Receivers over Partnerships they allow a lot of scope under which a Receiver can operate.
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