A receiver is one who is appointed to a corporation with power to receive income and other property and to pay necessary outgoings, but with no power to carry on the corporation’s business or to sell or buy assets. If the appointee is given such powers, he or she is a receiver and manager. In practice, the term “receiver” includes a receiver and manager, and this is given statutory effect by s 416 of the Corporations Act 2001 (Cth) (CA), which also deems a person having power to manage the corporation’s affairs to be a receiver and manager however he or she is described.

There are two main types of appointment:

• by the court (“court receiver”); and

• pursuant to the powers contained in an instrument given by the company, usually to a secured party (“private receiver”).

See Appointment.

A court receiver is not the agent of any party to the litigation in which he or she is appointed, but is an officer of the court. Interference with, or obstruction of, the exercise of their functions will be a contempt of court. As regards third parties, the receiver is a principal and personally liable, but has a right of indemnity against, and a lien over, the assets to which he or she is appointed for those liabilities.

A private receiver is usually made the agent of the corporation, rather than the appointor, by virtue of the instrument under which he or she is appointed.

See Effect of Appointment.

A receiver is an “officer” of the corporation: see the definition of “officer” found in s 9 CA; and as such is subject to the general duties prescribed by the CA, namely:

• the duty to use reasonable care and diligence;

• the duty to act in good faith and for a proper purpose;

• the duty not to use their position improperly; and

• the duty not to make improper use of information.

The receiver also has a number of specific statutory duties.

See Duties.

A receiver of property of a corporation is given a broad power to act for the achievement of the objectives for which the receiver was appointed. A receiver also has the list of powers enumerated powers in s 420(2) . These powers are subject to the court order by which, or the instrument under which, the receiver was appointed.

See Powers.

The receiver is personally liable for torts committed in the course of the receivership, and for:

• a contract made prior to appointment if he or she adopts it. To ensure that it is not taken to have been adopted, the receiver should get leave of the court to repudiate it;

• certain continuing contracts made prior to appointment, unless the receiver gives notice of disavowal upon appointment;

• certain contracts made after appointment notwithstanding any stipulation to the contrary; and

• other contracts entered into after appointment, unless personal liability is excluded, which may be either express or implied.

See Liability and Indemnity.

The remuneration of a court receiver is fixed by the terms of the order appointing him or her. Alternatively, it may be fixed by a subsequent order. Without an order, the receiver generally has no right to remuneration, but may be allowed compensation if the work has conferred an incontrovertible benefit to the corporation. As with other liabilities, the receiver has no right to claim remuneration from the parties to the action, and must look to the assets under his or her control.

A private receiver’s remuneration is as agreed between him or her and the appointing creditor, but is subject to review by the court.

See Remuneration.

As an officer of the court, the court receiver is subject to its supervision and may seek directions at any time. The parties to the action in which the receiver was appointed, and especially the moving party, are obliged to report any delay or default to the court. The receiver is obliged to account to the court for his or her receipts and payments, and the rules of court of the Federal Court and the Supreme Courts of the states and territories all make provision for the filing and passing, if necessary, of accounts. These obligations are in addition to statutory controls, which apply to both court and private receivers.

See Reporting and Supervision.

Apart from the statutory provisions, a court receiver can only be removed by a court order, unless the order of appointment provides for automatic termination or for a time limited appointment. In the case of discharge on completion of functions, application is generally made by one (or both) of the parties to the proceedings in which the appointment was made. However, it may be made by the receiver.

A private receiver may be removed by the appointor at any time and will resign office once the purpose of the appointment has been fulfilled.

For both types of receiver, there are provisions for supervision and removal by the court.

See Cessation of Appointment.

A receiver is not an “external administrator” for the purposes of the Insolvency Practice Schedule (Corporations) (IPS), see Definitions. Accordingly, the provisions of the schedule do not apply directly, although the receiver will be subject to the requirements for registration and discipline by reason of being required to be a registered liquidator.

See Registering and disciplining practitioners.