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Receiverships Act 1993

32: Liabilities of receiver

You could also call this:

"What a receiver is responsible for paying when in charge"

Illustration for Receiverships Act 1993

If you are a receiver, you are personally liable for some things. You are liable for contracts you enter into when you are doing your job as a receiver. You are also liable for wages or salary that people earn while you are in charge, if their contract was already in place before you started and you do not give them notice to leave within 14 days.

You are liable for paying some people, like directors, if you have agreed to their contract. The court can help you with some of these liabilities, like extending the time you have to give notice to employees.

You are also liable for some payments, like rent, that are due after you have been in charge for 14 days. The court can limit how much you have to pay or excuse you from paying altogether. You have the right to be reimbursed from the property you are in charge of for any liabilities you have under this law.

The law does not limit your other rights to be reimbursed, and it does not limit your liability if you enter into a contract without permission.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM327758.

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32Liabilities of receiver

  1. Subject to subsections (2) and (3), a receiver is personally liable—

  2. on a contract entered into by the receiver in the exercise of any of the receiver's powers; and
    1. for payment of wages or salary that, during the receivership, accrue under a contract of employment relating to the property in receivership and entered into before the appointment of the receiver if notice of the termination of the contract is not lawfully given within 14 days after the date of appointment; and
      1. for payment of remuneration under any contract with—if the receiver has expressly confirmed the contract.
        1. a director of a grantor that is a body corporate; or
          1. a person who, in relation to a grantor that is not a body corporate, occupies a position equivalent to that of a director of a body corporate—

          2. The terms of a contract referred to in paragraph (a) of subsection (1) may exclude or limit the personal liability of a receiver other than a receiver appointed by the court.

          3. The court may, on the application of a receiver, extend the period within which notice of the termination of a contract is required to be given under paragraph (b) of subsection (1) and may extend that period on such terms and conditions as the court thinks fit.

          4. Every application under subsection (3) must be made before the expiry of the period referred to.

          5. Subject to subsection (7), a receiver is personally liable, to the extent specified in subsection (6), for rent and any other payments becoming due under an agreement subsisting at the date of the appointment of the receiver relating to the use, possession, or occupation by the grantor of property in receivership.

          6. The liability of a receiver under subsection (5) is limited to that portion of the rent or other payments which accrue in the period commencing 14 days after the date of the appointment of the receiver and ending on—

          7. the date on which the receivership ends; or
            1. the date on which the grantor ceases to use, possess, or occupy the property,—
                1. whichever is the earlier.

              1. The court may, on the application of a receiver,—

              2. limit the liability of the receiver to a greater extent than that specified in subsection (6):
                1. excuse the receiver from liability under subsection (5).

                  1. Nothing in subsection (5) or subsection (6)—

                  2. is to be taken as giving rise to an adoption by a receiver of an agreement referred to in subsection (5); or
                    1. renders a receiver liable to perform any other obligation under the agreement.

                      1. A receiver is entitled to an indemnity out of the property in receivership in respect of personal liability under this section.

                      2. Nothing in this section—

                      3. limits any other right of indemnity to which a receiver may be entitled; or
                        1. limits the liability of a receiver on a contract entered into without authority; or
                          1. confers on a receiver a right to an indemnity in respect of liability on a contract entered into without authority.