Canadian Commercial Bank v. Bird Oil Equipment Ltd., (1985) 59 A.R. 342 (QB)

• Judge: Shannon, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 05, 1985
• Citations: (1985), 59 A.R. 342 (QB)

Cdn. Com. Bk. v. Bird Oil Equipment (1985), 59 A.R. 342 (QB)

MLB headnote and full text

Canadian Commercial Bank v. Bird Oil Equipment Ltd.

(Action No. 8301-18855)

Indexed As: Canadian Commercial Bank v. Bird Oil Equipment Ltd.

Alberta Court of Queen's Bench

Shannon, J.

February 5, 1985.

Summary:

The receiver of the defendant company applied for advice and directions as to who had priority, a debentureholder or employees for accrued vacation pay. A Master of the Alberta Court of Queen's Bench held that the employees had priority for vacation pay that accrued up until the date the defendant company continued under the Business Corporation Act. The debentureholder appealed.

The Alberta Court of Queen's Bench allowed the appeal. The court held that the debentureholder's claim took priority over the employees' entire claim for vacation pay.

Company Law - Topic 5428

Borrowing - Debentures - Crystallization of a floating charge - The Alberta Court of Queen's Bench held that when a floating charge debenture crystallized the debentureholder became a secured creditor - See paragraphs 15 and 16.

Master and Servant - Topic 1995

Remuneration - Vacation pay - Statutory priority for - An employer was placed in receivership by a debentureholder - Employees who were owed vacation pay claimed priority over the debentureholder under s. 100 of the Employment Standards Act - The Alberta Court of Queen's Bench held that the debentureholder had priority, because it was a secured creditor and s. 100 did not give employees priority over secured creditors - See paragraphs 10 to 16.

Master and Servant - Topic 1995

Remuneration - Vacation pay - Statutory priority - Employees who were owed vacation pay had priority over a debentureholder pursuant to ss. 105 (1) and 266 of the Companies Act and s. 48 of the Labour Act - There was no priority as of right until certain events occurred, none of which occurred before the employer continued under the Business Corporations Act - The Alberta Court of Queen's Bench held that the debentureholder had priority, because after the employer continued under the new Act the above sections no longer applied - See paragraphs 17 to 26.

Cases Noticed:

Alberta Opportunity Co. v. Planidin (1977), 24 C.B.R.(N.S.) 30; 4 A.R. 528, ref'd to. [para. 13].

Alberta Paper Corp. Ltd. v. Metropolitan Graphics Ltd. (1983), 47 A.R. 279, ref'd to. [para. 15].

Industrial Development Bank v. Valley Dairy Ltd. and MacDonald, [1953] O.R. 71, ref'd to. [para. 16].

Bank of Montreal v. Woodtown Developments Ltd. (1979), 99 D.L.R.(3d) 739 (Ont. H.C.), ref'd to. [para. 16].

Re Campeau Corp. and Prov. Bank of Canada et al. (1975), 54 D.L.R.(3d) 329 (Ont. Div. Ct.), ref'd to. [para. 22].

Re Athlumney, [1898] 2 Q.B. 547, ref'd to. [para. 25].

Statutes Noticed:

Business Corporations Act, S.A. 1981, c. B-15, generally [para. 4].

Companies Act, R.S.A. 1970, c. 60, sect. 105(1), sect. 266 [para. 18].

Employment Standards Act, R.S.A. 1980, c. E-10.1, sect. 1(f) [para. 11]; sect. 100 [para. 10]; sect. 101(8) [para. 12].

Employment Standards Act, R.S.O. 1970, c. 147, sect. 8(1) [para. 22].

Labour Act, S.A. 1973, c. 33, sect. 48 [para. 19].

Authors and Works Noticed:

Halsbury's Laws of England (4th Ed.), vol. 7, p. 494, para. 830 [para. 15].

Counsel:

K.J. Martens, for the Receiver;

J.S. Glazer, for the Director of Employment Standards;

B.P. O'Leary, for the plaintiff;

K.M. Sullivan, for the defendant.

This appeal was heard before Shannon, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on February 5, 1985.