350914 Alberta Ltd. (Bankrupt), Re, (2000) 261 A.R. 96 (CA)

• Judge: McClung, Hunt and Wittmann, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: May 25, 2000
• Citations: (2000), 261 A.R. 96 (CA);2000 ABCA 146

350914 Alta. Ltd. (Bankrupt), Re (2000), 261 A.R. 96 (CA);

    225 W.A.C. 96

MLB headnote and full text

Temp. Cite: [2000] A.R. TBEd. JN.046

In The Matter Of the Bankruptcy of 350914 Alberta Ltd. (formerly Noralta Metal Fabricators Inc.) Estate No. 24-067681.

The Trustees of the Edmonton Pipe Industry Pension Plan Trust Fund, the Trustees of the Edmonton Pipe Industry Health and Welfare Trust Fund, the Trustees of the Edmonton Pipe Industry Educational Trust Fund, the Trustees of the Edmonton Supplementary Benefit Trust Fund, the Trustees of the Local 488 Market Enhancement Recovery Trust Fund, Local Union 488 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (appellants/respondents) v. 350914 Alberta Ltd. (formerly Noralta Metal Fabricators Inc.) (respondent) (Appeal No. 9903-0007-AC)

Board of Trustees of the Edmonton Pipe Industry Pension Plan (appellant/respondent) v. Coopers and Lybrand, Trustees In Bankruptcy of 350914 Alberta Ltd. (formerly Noralta Metal Fabricators Inc.) (respondent)

(Appeal No. 9903-0057-AC; 2000 ABCA 146)

Indexed As: 350914 Alberta Ltd. (Bankrupt), Re

Alberta Court of Appeal

McClung, Hunt and Wittmann, JJ.A.

May 25, 2000.

Summary:

Pursuant to a collective agreement, Noralta was to contribute to certain pension plans and trust funds. Noralta mixed these contri­butions with its general funds in its general bank account. Noralta was petitioned into bankruptcy. The trustees of the trusts applied for a declaration that any monies Noralta held at the date of its bankruptcy, but not remitted to the trusts, were trust monies and not part of the bankrupt's estate or, alterna­tively, for a declaration that the trustees had a claim as a secured creditor for the amounts not remitted by the employer.

The Alberta Court of Queen's Bench, in a decision reported at [1998] A.R. Uned. 749, dismissed the application. The trustees appealed.

The Alberta Court of Appeal allowed the appeal.

Bankruptcy - Topic 488

Property of bankrupt - Exemptions or exclusions - Trust property - An employer, Noralta, did not make contributions to certain pensions and trusts pursuant to a collective agreement and trust agreement - Noralta mixed these contributions with its general funds in its general bank account - Noralta was petitioned into bankruptcy - The trustees of the trusts unsuccessfully applied for the following declarations: that these unremitted contributions were trust monies; or, alternatively, a declaration that the trustees were secured creditors for Noralta's unremitted contributions - The trustees appealed - The Alberta Court of Appeal held that a common law trust was created and maintained, the contributions were ascertainable, earmarked and identifi­able and these contributions were trust property (Bankruptcy and Insolvency Act, s. 67(1)(a)).

Bankruptcy - Topic 488

Property of bankrupt - Exemptions or exclusions - Trust property - An employer, Noralta, did not make contributions to certain pensions plans and trusts pursuant to a collective agreement and trust agree­ment - Noralta mixed these contributions with its general funds in its general bank account - Noralta was petitioned into bank­ruptcy - The trustees of the trusts unsuc­cessfully applied for a declaration that the unremitted contributions were trust monies - The trustees appealed - At issue, inter alia, was whether the Employment Pension Plan Act created a statutory trust, making the pension plan monies exempt from distribution (Bankruptcy and Insolvency Act, s. 67(1)(a)) - The Alberta Court of Appeal held that a court could not consider any provincially created statutory trust valid for the purposes of s. 67(1)(a) unless the trust had all the requisite elements of a common law trust - Therefore, it did not matter that the pension trust was subject to a statutory definition incapable of confer­ring a priority in bankruptcy - See para­graphs 32 to 41.

Trusts - Topic 345

Creation of trust - Requirements of - Cer­tainty of subject matter of trust - An employer, Noralta, did not make contribu­tions to certain pensions and trusts pursu­ant to a collective agreement and trust agreement - Noralta mixed these contribu­tions with its general funds in its general bank account - Noralta was petitioned into bankruptcy - The trustees of the trusts unsuccessfully applied for the following declarations: that these unremitted contri­butions were trust monies; or, alternatively, a declaration that the trustees had a claim as a secured creditor for Noralta's unremitted contributions - The trustees appealed, asserting the unremitted contribu­tions, while commingled with Noralta's general account, were identifiable because they were earmarked as trust funds through remittance forms that were filed prior to the Noralta's bankruptcy - The Alberta Court of Appeal held that a common law trust was created and maintained, the contributions were ascertainable, earmarked and identifiable and were trust money under s. 67(1)(a) of the Bankruptcy and Insolvency Act - See paragraphs 16 to 31.

Cases Noticed:

Beardmore Trusts, Re, [1952] 1 D.L.R. 41 (Ont. H.C.), refd to. [para. 19].

British Columbia v. Henfrey Samson Be­lair Ltd., [1989] 2 S.C.R. 24; 97 N.R. 61, dist. [para. 22].

Bassano Growers Ltd. v. Diamond S Pro­duce Ltd. (Bankrupt) (1998), 216 A.R. 328; 175 W.A.C. 328 (C.A.), refd to. [para. 22].

R. v. Norfolk County Council (1891), 60 L.J.Q.B. 379, refd to. [para. 27].

Scarbin Realty Ltd. v. Toronto (City) (1978), 90 D.L.R.(3d) 747 (Ont. S.C.), refd to. [para. 28].

Robinson, Little & Co. (Bankrupt) v. Saskatchewan (Minister of Labour) (1989), 80 Sask.R. 9; 63 D.L.R.(4th) 392 (C.A.), refd to. [para. 35].

Points of Call Holidays Ltd., Re (1991), 54 B.C.L.R.(2d) 384 (S.C.), refd to. [para. 36].

British Columbia v. National Bank of Canada et al. (1994), 52 B.C.A.C. 180; 86 W.A.C. 180; 30 C.B.R.(3d) 215 (C.A.), refd to. [para. 39].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, C. B-2, sect. 67(1)(a) [para. 14].

Employment Pension Plans Act, S.A. 1986, c. E-10.05, sect. 40.1, sect. 40.2, sect. 40.3 [para. 14].

Authors and Works Noticed:

Bogert, Handbook of the Law of Trusts, p. 72 [para. 21].

Waters, D.W.M., Law of Trusts in Canada (2nd Ed. 1984), pp. 67 [para. 18]; 119 [para. 21].

Counsel:

R.R. Blakely, M.J. Field and B.G. Doher­ty, for the appellants;

E.R. Feehan, for the respondents;

J.W.A. Moore, for the Workers' Compen­sation Board.

This appeal was heard on January 25, 2000, by McClung, Hunt and Wittmann, JJ.A., of the Alberta Court of Appeal.

The following decision was delivered by the court on May 25, 2000.