378. Precedence among receivers

Where there are two or more floating charges subsisting over all or any part of the property of the company, a receiver may be appointed under this Part by virtue of each such charge.

A receiver appointed by or on the application of the grantee of a floating charge, where that charge has priority over any other floating charge by virtue of which a receiver has been appointed in terms of the powers conferred on a receiver, that receiver shall have priority to the exclusion of any other receiver notwithstanding anything to the contrary prior.

Where two or more floating charges rank equally with one another, and two or more receivers have been appointed by virtue of such charges, the receivers so appointed are deemed to have been appointed as joint receivers.

Receivers deemed to have been appointed as joint receivers shall act jointly unless any of the instruments of appointment provides otherwise.

Subject to subsection (6), the powers of a receiver appointed by or on the application of the grantee of a floating charge are suspended by, and as from the time of the appointment of a receiver by or on the application of the grantee of a floating charge having priority over that charge, so far as necessary to enable the receiver second mentioned to exercise the powers of that receiver conferred by this Act, and any powers so suspended shall take effect again when the floating charge having priority ceases to attach to the property then subject to the charge, or when the appointment of a receiver under the floating charge having priority ceases in respect of that property, whichever occurs first.

The suspension of the powers of a receiver under subsection (5) does not have the effect of requiring the receiver to release any part of the property of the company from the receiver’s possession, custody or control, unless and until the receiver receives from the superseding receiver a valid indemnity (subject to the limit of the value of such part of the property as is subject to the charge by virtue of which the receiver was appointed) in respect of any liability of the receiver that may properly have been incurred in the performance, exercise and discharge of the receiver’s functions, powers and duties.

The suspension of the powers of a receiver under subsection (5) shall not cause the floating charge by virtue of which the receiver was appointed to cease to attach to the property in respect of which that receiver was appointed.

Nothing in this section shall prevent the same receiver being appointed by virtue of two or more floating charges.