Robinson, Little & Co. (Bankrupt) v. Saskatchewan (Minister of Labour), (1989) 80 Sask.R. 9 (CA)

• Judge: Bayda, C.J.S., Tallis, Cameron, Vancise, Wakeling, Gerwing and Sherstobitoff, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: May 10, 1988
• Jurisdiction: Saskatchewan
• Citations: (1989), 80 Sask.R. 9 (CA)

Robinson, Little & Co. v. Sask. (1989), 80 Sask.R. 9 (CA)

MLB headnote and full text

Clarkson, Gordon Inc. (formerly known as The Clarkson Company Limited), Trustee of the Estate of Robinson, Little & Company Limited, a bankrupt (applicant/appellant) v. Her Majesty the Queen, in right of the Province of Saskatchewan, as represented by the Minister of Labour (respondent/respondent)

(No. 9635)

Indexed As: Robinson, Little & Co. (Bankrupt) v. Saskatchewan (Minister of Labour)

Saskatchewan Court of Appeal

Bayda, C.J.S., Tallis, Cameron, Vancise, Wakeling, Gerwing and Sherstobitoff, JJ.A.

October 19, 1989.

Summary:

A trustee in bankruptcy applied for a declaration respecting the priority between claims by secured creditors and claims for wages by employees pursuant to the trust provisions of the Saskatchewan Labour Standards Act.

The Saskatchewan Court of Queen's Bench, in a decision reported in 64 Sask.R. 51, held that the statutory trust for wages did not form part of the property of the bankrupt for purposes of the Bankruptcy Act. The trustee in bankruptcy appealed.

The Saskatchewan Court of Appeal allowed the appeal.

Bankruptcy - Topic 488

Property of bankrupt - Exclusions - Trust property - Section 56(1.1) of the Labour Standards Act provided that an employer was deemed to hold the amount of wages due or accruing due to his employees in trust - The Saskatchewan Court of Appeal held that where the wages were mingled with other moneys in the hands of the trustee and converted to other property so that they could not be traced, those trust moneys did not constitute a "trust" within the meaning of s. 47(a) of the Bankruptcy Act - Accordingly, the court held that the amount held in trust constituted the property of the bankrupt divisible among his creditors.

Bankruptcy - Topic 3642

Creditors - Priorities - Precedence of Bankruptcy Act over provincial legislation - Labour Standards Act (Sask.) - Employees were owed holiday pay and wages by their bankrupt employer - Section 56(1.2) of the Labour Standards Act provided that wages due or accruing due to employees were deemed to be secured by a security interest upon the employer's assets and estate, which further took priority over all other claims - The Saskatchewan Court of Appeal held that s. 56(1.2) did not confer upon employees the status of secured creditors within the meaning of s. 107(1) of the Bankruptcy Act - Once the employer went bankrupt, s. 107(1)(d), not s. 56(1.2), applied to determine the employees' priorities - See paragraphs 10 to 11.

Bankruptcy - Topic 3648

Creditors - Priorities - Wages - General - [See Bankruptcy - Topic 3642 above].

Bankruptcy - Topic 3930

Secured creditors - What constitute - Claim for wages - [See Bankruptcy - Topic 3642 above].

Master and Servant - Topic 1821

Wages - Statutory trust for wages - Priorities - [See Bankruptcy - Topic 3642 above].

Cases Noticed:

Todoshichuk v. Marchenski etc., [1985] 5 W.W.R. 72; 40 Sask.R. 198, not folld. [para. 4].

Phoenix Paper Products Ltd. (Bankrupt), Re (1984), 1 O.A.C. 215, 44 O.R.(2d) 225; 48 C.B.R.(N.S.) 113; 3 D.L.R.(4th) 617, not folld. [para. 4].

British Columbia v. Henfry Samson Belair Ltd. (1989), 97 N.R. 61 (S.C.C.), folld. [para. 4].

Deloitte, Haskins and Sells Ltd. v. Workers' Compensation Board, [1985] 1 S.C.R. 785; 60 N.R. 81, folld. [para. 10].

Statutes Noticed:

Bankruptcy Act, R.S.C. 1970, c. B-3, sect. 47(a) [paras. 1-2, 4]; sect. 107(1) [paras. 1, 10-11]; sect. 107(1)(d) [paras. 1-2, 10-11].

Labour Standards Act, R.S.S. 1978, c. L-1, sect. 56(1.1) [paras. 1-2, 7]; sect. 56(1.2) [paras. 2, 10].

Counsel:

Gary G.W. Semenchuck, Q.C., for the appellant;

Wayne D. Mulholland, for the respondent.

This appeal was heard before Bayda, C.J.S., Tallis, Cameron, Vancise, Wakeling, Gerwing and Sherstobitoff, JJ.A., of the Saskatchewan Court of Appeal on May 10, 1988. The decision of the Court of Appeal was delivered on October 19, 1989 by Bayda, C.J.S.