Phone Receiver

Receivers, Shareholders, and Conflicts of Interest


By Ty Schmidt – Supervised by Professor Maharaj

In the recent decision of Concrete Equities Inc. (Re), 2022 ABQB 185, the Alberta Court of Queen’s Bench found that a court-ordered receiver of an RRSP holdings company owed a fiduciary duty to its RRSP holders, and that using the company’s shares to vote against the wishes of the bondholders constituted a breach of fiduciary duty due to a conflict of interest.


Castleridge LP is a limited partnership that holds commercial real estate investments.[1] In 2010, Castleridge LP Investment Corp. (the “GP Corp”) was made the new general partner of Castleridge LP.[2] Another company, Concrete RRSP Holdings Inc. (“Concrete RRSP”), was formed to allow individuals (“RRSP Holders”) to hold an indirect interest in Castleridge LP in their registered retirement savings plans.[3] RRSP Holders acquired said interest by acquiring non-voting shares and bonds in Concrete RRSP, which in turn acquired limited partnership units (“LP Units”) in Castleridge LP.[4]

Concrete RRSP was struck from the corporate registry in 2011 and was later revived by the Alberta Court of Queen’s Bench in 2013 for certain limited purposes, such as to satisfy obligations to bondholders.[5] As part of this same order, Steven Patrick Butt – who is the sole director and officer of GP Corp[6] – was appointed as receiver of Concrete RRSP.[7] Furthermore, the order also suspended the powers of the directors of Concrete RRSP until further orders of the Court.[8]

Due to increasing concern with GP Corp’s management of Castleridge LP, the holders of the limited partnership units held a general meeting where a vote was conducted to remove GP Corp as the general partner of Castleridge LP.[9] This vote was unsuccessful due to Mr. Butt causing Concrete RRSP to give him a proxy to vote its units against the removal of GP Corp.[10] This led the Applicant to seek an order declaring that Mr. Butt was not entitled to vote Concrete RRSP’s units on behalf of the RRSP holders.[11]


The Court agreed with the Applicant that Mr. Butt, as receiver of Concrete RRSP, did not have the authority to vote its limited partnership units because this was not a power that was contemplated for the purposes of reviving the company in 2013.[12] Voting these units would fall within the powers of the directors of the business, but these exact powers were suspended by the Court’s orders.[13] Additionally, since it was the business of Concrete RRSP to hold these units, and because Mr. Butt was merely the receiver and not the receiver-manager, he had no right to vote the units.[14]

A secondary issue in this case was whether Mr. Butt ignored a conflict of interest and breached a fiduciary duty by using this vote to ensure that GP Corp remained the general partner of Castleridge LP, acting directly against the wishes of the majority of the RRSP holders.[15] In support of the contention that Butt had breached such a duty, the Applicant referred to s.98 of the Alberta Business Corporations Act[16] whichstates that a receiver appointed under an instrument has a duty to act honestly and in good faith, and to deal with the company’s property in a commercially reasonable manner.[17]  In the circumstances Mr. Butt was appointed by a court order as opposed to an instrument, but nonetheless the Court agreed that there could be little doubt that Mr. Butt had such a duty to act honestly and in good faith.[18]  As such, and considering that Mr. Butt had knowledge of Concrete RRSP’s inability to give him a proxy to vote, the Court concluded that he could not have been acting in a reasonable manner and that he was thus in breach of his fiduciary obligations.[19]


This decision reaffirms that when a company is revived by a court order for a limited set of purposes, it is imperative that its receiver (or any other director) acts strictly within the confines of such purposes. It also further establishes that a receiver owes a fiduciary duty to the shareholders of the company regardless of whether the receiver is court-appointed or appointed under an instrument. This marks yet another case showing that Courts will have little sympathy for individuals who put their own interests ahead of the interests of the people they are acting for.

[1] Concrete Equities Inc. (Re), 2022 ABQB 185 at para. 3 [Concrete].

[2] Ibid at para. 4.

[3] Ibid at para. 6.

[4] Ibid.

[5] Ibid at paras. 7, 9.

[6] Ibid at para. 5.

[7] Ibid at para. 10.

[8] Ibid

[9] Ibid at para. 12.

[10] Ibid at paras. 19-20, 37.

[11] Ibid at paras. 24-25.

[12] Ibid at para. 38.

[13] Ibid.

[14] Ibid.

[15] Ibid at paras. 47, 54.

[16] The Manitoba equivalent is found in section 94 of The Corporations Act, CCSM, c 225.

[17] Concrete supra note 1 at para. 48.

[18] Ibid.

[19] Ibid at para. 54.

[sc name=”disclaimer”][/sc]