An injunction stops things happening. A receiver makes things happen — collecting income, running a business, managing an asset. Order 14 Division 3 of the National Court Rules 1983 regulates the office.
Where a receiver is the right order
| Situation | Why a receiver |
|---|---|
| A partnership dissolving in dispute | The business must keep trading while accounts are taken |
| A company deadlocked between shareholders | Nobody can lawfully manage it |
| Income-producing property in dispute — rents, royalties | Someone must collect and hold the income |
| A mortgagee enforcing security | Often provided for by the security instrument itself |
| An estate with no personal representative | Compare Order 5 Rule 16 |
| Assets at risk of dissipation by the person controlling them | Where a freezing order would not be enough |
In an urgent case, the Court may, on the application of a person who intends to commence proceedings, appoint a receiver — to the same extent as if the applicant had commenced the proceedings.
Appointment of a receiver is one of only four orders Rule 9 expressly allows before commencement, alongside an injunction, orders in the nature of habeas corpus, and orders for the custody of minors.
Rules 17 and 18
Rule 17 — a receiver shall, within seven days after his appointment, file a notice specifying an address for service.
Rule 18(1) — the Court may give directions for the filing by the receiver of security.
18(2) — where the Court directs the appointment, then unless the Court otherwise orders, a person shall not be appointed receiver until he has filed a security.
18(4) — the security, in Form 63, shall be a security approved by the Court that the receiver will account for what he receives as receiver and will deal with what he receives as the Court may direct.
18(5) — the Court may later make orders for the vacation of the security.
Sub-rule (2) makes the security a precondition of appointment where the Court directs one. A person purporting to act as receiver before filing it has not been validly appointed.
The address for service under Rule 17 matters because the receiver becomes a participant in the proceeding — accounts must be served, appointments taken, and applications made to and against them.
Sub-rule (3) preserves any provision made by or under any Act — so where a receiver is appointed under the Companies Act 1997 or a security instrument, that regime governs.
Rules 19 and 20
19 — a receiver shall be allowed such remuneration (if any) as may be fixed by the Court.
20(1) — a receiver shall file accounts at such intervals or on such dates as the Court may direct.
20(2) — on the day of filing an account, the receiver shall obtain an appointment to pass the account and serve the account, with a note of the appointment, on each party interested who has an address for service.
20(3) — the receiver shall, unless the Court otherwise orders, attend on the appointment to pass the account.
Note the words in Rule 19: “such remuneration (if any) as may be fixed by the Court”. A receiver cannot set their own fees, and there is no entitlement to remuneration unless the Court allows it. Address remuneration in the appointing order.
“Passing” an account is a formal process: the account is filed, an appointment obtained, the interested parties served, and the receiver attends to have it examined. This is the mechanism by which the parties can test what the receiver has done with the property.
The account rules in Order 14 Division 1 supply the detail — items numbered consecutively on each side, verification by affidavit, and notice of any charge or alleged error.
Rule 22
(1) The Court may authorize a receiver to do — either in his own name or in the name of the parties or any of them, and either generally or in any particular instance — any act or thing which the parties or any of them might do if of full age and capacity.
(2) This has effect notwithstanding that the parties or any of them are not of full age and capacity.
(3) It does not limit the powers of the Court apart from this Rule to authorise the receiver.
Rule 22 is an enabling provision: the Court may authorize. It does not confer powers automatically. So the appointing order must spell out what the receiver may do — operate accounts, collect rents, employ staff, sell stock, grant leases, commence or defend proceedings.
A receiver who is uncertain should apply for directions rather than act. Sub-rule (2) is a useful extension where a party is a disabled person: the receiver may be authorised to do what that party could do if of full capacity.
Rules 21 and 23
Where a receiver fails to file an account or affidavit, to attend on an appointment to pass his account, or to do any other thing required, the Court may make such orders as it thinks fit, including the discharge of the receiver, the appointment of another receiver, and the payment of costs.
(2) Where a receiver fails to pay into Court a sum shown by his account as due from him, the Court may charge him with interest at the rate of 5% yearly on that sum while in his possession as receiver.
(3) This does not limit the powers of the Court as to enforcement of orders or as to the punishment of contempt.
The Court may, on motion in the proceedings, order the filing and passing of accounts by the representative of the deceased receiver and the payment into Court of any amount shown to be due.
No such order may be made unless notice of the motion has been served on the representative — and that notice may be served in any manner in which a writ of summons may be served. See service of a writ.
Sources
- National Court Rules 1983 — O 5 r 16; O 14 rr 1–8, 9–16, 17–23, Div 6; Form 63
- Companies Act 1997
- Constitution — s 155(4)
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.