In this case, the Court of Appeal of New Brunswick refused to appoint or confirm a receiver in the context of a dispute over the ownership of the assets of a “chartered local” union that had severed contractual ties with the parent union. The parent union had appointed a receiver to gather information relating to the identification and ownership of assets held by the local union. The parent union then applied to the court for confirmation of the appointment. Justice Robertson dismissed the appeal, holding that a court would not appoint or confirm a receiver for the sole purpose of identifying ownership of the assets. Further, it is a prerequisite to seizure that ownership be established. Accordingly, the parent union must initiate an originating process to first resolve the issue of ownership before a receiver can be appointed.
The parent union's constitution and by-laws provided that local unions were "subordinate" and that the property of any local union would become that of the parent union upon dissolution; however, ownership over assets was disputed by the members of the local union. Following the local union's break-away, the parent union appointed one of its employees as a receiver, and applied for an order to grant the receiver authority to compel production of documents pertaining to the assets of the local union. The court noted a lack of jurisprudence in relation to a court's power to appoint and confirm receivers under Rule 41 of New Brunswick's Rules of Court. The requirements for confirmation of a receiver under Rule 41 state that the applicant must have an "interest in the property". Finding that the ownership of the assets was in dispute, the court held that the parent union lacked an "interest in the property." Accordingly, the application judge’s denial of confirmation was upheld.
May 5, 2011
Link to Decision
Grant Bishop & Steve Holinski
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