Wednesday, 1 February 2012

Equitable Receivers and Discretionary Interests, Rights and Powers of a Judgment Debtor

Obtaining a judgment may be just the first step in actually getting justice for your client. Collection and enforcement proceedings are often archaic and sometimes more complex and time consuming than the trial itself.  In the context of such proceedings, an equitable receiver, appointed under s. 39 of the LEA, Rules 10-2 & 13-2(5), or the inherent jurisdiction of the court, is the multi-tool of last resort, to be used when no other legal or equitable enforcement procedures are available.  Unfortunately, as demonstrated by the decision in Quest Capital Corp. v. Longpre, 2012 BCCA 49, even this tool has limits and can be defeated by creative judgment creditors.  In particular, a receiver cannot step into the shoes of a judgment debtor who is both a trustee and a discretionary beneficiary of a trust in order to exercise the trustee's discretion and distribute the assets.