Good Faith Duties of Secured Parties and Receivers under the Personal Property Security Act
AbstractMirth presents a detailed discussion of the duties of secured parties and receivers to act in good faith under the Personal Property Security Act of Alberta. The focus is on ss. 16 and 66 of the Act which set out requirements similar to those codified in Part 8 of the Alberta Business Corporations Act. First, the duty of receivers to pursue the best possible price on the sale of assets is considered. Mirth then goes on to discuss how the duty of good faith was defined in pre-PPSA situations and determines that the duty will be of much more positive nature in the future: recent cases indicate that the test will be whether the actions undertaken were "commercially reasonable" in the situation. Mirth continues with an analysis of recent Alberta case law which is tending to offer a broad view of the duty of good faith. Ultimately. Mirth concludes that although the Alberta Court may have gone a little far in shifting the burden, the PPSA provisions have definitely resulted in stricter duties for receivers and secured parties than what existed under the old common law regime.
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