A significant portion of the Canadian economy is based on the extraction sector, whether it be metals and minerals or oil and gas. This is especially so in Western Canada, the primary beneficiary of the resource sector’s cyclical boom of the past many years. But all booms are inevitably followed by busts: the slow leak of the metals sector over the past few years and the spectacular fall of oil prices since November 2014.
In Akagi v. Synergy Group (2000) Inc. (“Akagi“), the Ontario Court of Appeal set aside a series of ex parte orders made by Toronto’s Commercial List Court granting broad investigative powers to a court-appointed receiver. The receiver had been empowered under section 101 of the Courts of Justice Act which gives the court powers to make such an order “where it appears to a judge of the court to be just or convenient to do so”. The Court of Appeal ruled in its decision released on May 22, 2015, that there are situations where it is appropriate to appoint a receiver to investigate the affairs of a debtor or to review certain transactions including even, in proper circumstances, the affairs of and transactions concerning related non-parties. However, the Court of Appeal ruled that the receivership in Akagi had morphed into an expansive investigation on behalf of non-parties which the Court found to be improper and misguided.