Phoenix Paper Products Ltd. (Bankrupt), Re, (1983) 1 O.A.C. 215 (CA)

• Judge: Howland, C.J.O., Brooke and Tarnopolsky, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: December 09, 1983
• Jurisdiction: Ontario
• Citations: (1983), 1 O.A.C. 215 (CA)

Phoenix Paper Products (Bankrupt), Re (1983), 1 O.A.C. 215 (CA)

MLB headnote and full text

Re Phoenix Paper Products Ltd. (a bankrupt)

Indexed As: Phoenix Paper Products Ltd. (Bankrupt), Re

Ontario Court of Appeal

Howland, C.J.O., Brooke and Tarnopolsky, JJ.A.

December 9, 1983.

Summary:

Phoenix Paper went bankrupt and its employees claimed vacation pay under a provincial statutory trust (Employment Standards Act). The trustee in bankruptcy alleged that the employees' claim was subject to the limiting provisions of s. 107(d) of the Bankruptcy Act.

The Ontario High Court held that the trust did not constitute property of the bankrupt and therefore s. 107(d) did not apply to the trust. The trustee appealed.

The Ontario Court of Appeal dismissed the appeal.

Bankruptcy - Topic 488

Property of bankrupt - Exemptions or exclusions - Section 47(a) of the Bankruptcy Act provided that property held in trust did not form part of the property of the bankrupt - Section 15 of the Ontario Employment Standards Act created a trust respecting vacation pay accruing due to an employee - The Ontario Court of Appeal held that s. 15 created a valid statutory trust which did not form part of the property of the bankrupt and was not subject to the limitations of s. 107(d) of the Bankruptcy Act - See paragraph 26.

Bankruptcy - Topic 3645

Creditors - Priorities - Statutory liens, effect of - The Ontario Court of Appeal held that a statutory trust (created by the Employment Standards Act) was a valid trust for purposes of the Bankruptcy Act - The court held that such a trust did not constitute property of the bankrupt for purposes of s. 47(a) of the Bankruptcy Act.

Cases Noticed:

Attorney General for Ontario v. Wentworth Insurance Co., [1969] S.C.R. 779; 12 C.B.R.(N.S.) 265, refd to. [para. 5].

Multiple Access Ltd. v. McCutcheon et al. (1982), 44 N.R. 181, refd to. [para. 6].

Ross v. Registrar of Motor Vehicles, [1975] 1 S.C.R. 5; 1 N.R. 9, refd to. [para. 6].

Bell v. Attorney General for Prince Edward Island, [1975] 1 S.C.R. 25; 1 N.R. 27, refd to. [para. 6].

Re Deslauriers Construction Products Ltd., [1970] 3 O.R. 599, refd to. [para. 7].

Re Radovini (1983), 45 C.B.R.(N.S.) 220, dist. [para. 8].

Deputy Minister of National Revenue v. Rainville sub nom. Re Bourgault, [1980] 1 S.C.R. 35; 30 N.R. 24; 105 D.L.R.(3d) 270, dist. [para. 9].

John M.M. Troup Ltd. et al. v. Royal Bank of Canada (1962), 34 D.L.R.(2d) 556, folld. [para. 11].

Re Black Forest Restaurant Limited (1981), 47 N.S.R.(2d) 454; 90 A.P.R. 454; 37 C.B.R.(N.S.) 176 (N.S.S.C.), affd. sub. nom. Director of Labour Standards of Nova Scotia and Workers' Compensation Board of Nova Scotia v. Trustee in Bankruptcy (1981), 47 N.S.R.(2d) 446; 90 A.P.R. 446; 38 C.B.R.(N.S.) 253 (N.S.C.A.), refd to. [para. 12].

Workers' Compensation Board v. Kinross Mortgage Corporation et al. (1981), 41 C.B.R.(N.S.) 1 (B.C.C.A.), refd to. [para. 12].

Re Racknagel (1982), 42 C.B.R.(N.S.) 135 (B.C.S.C.), refd to. [para. 12].

Coopers & Lybrand v. The Queen in Right of Canada et al. (1981), 39 C.B.R.(N.S.) 247 (B.C.S.C.), refd to. [paras. 12, 22].

Re Dairy Maid Chocolates Ltd. (1972), 17 C.B.R.(N.S.) 270 (Ont. S.C. Bktcy.), refd to. [para. 13].

Re Alduco Mechanical Contractors Ltd. (1982), 40 C.B.R.(N.S.) 239 (Ont. S.C. Bktcy.), refd to. [para. 13].

Re KRA Restaurants Ltd. and Toronto-Dominion Bank et al. (1975), 25 N.S.R.(2d) 605; 36 A.P.R. 605; 74 D.L.R.(3d) 272 (N.S.S.C. Bktcy.), refd to. [para. 13].

Dauphin Plains Credit Union Ltd. v. Xyloid Industries Ltd. et al. (1980), 31 N.R. 301; 33 C.B.R.(N.S.) 107 (S.C.C.), refd to. [para. 13].

Re Reimer (1980), 27 B.C.L.R. 149 (B.C.S.C.), refd to. [paras. 13, 24].

Re Kraemer (1982), 42 C.B.R.(N.S.) 259 (Ont. S.C. Master Bktcy.), refd to. [para. 13].

Re Reed; Franco v. Sous-Ministre du Revenu du Québec (1980), 35 C.B.R.(N.S.) 149, refd to. [para. 17].

I.R.B. v. Canadian Imperial Bank of Commerce (1980), 116 D.L.R.(3d) 71, refd to. [para. 17].

Moore v. The Queen (1957), 15 D.L.R.(2d) 681; 37 C.B.R. 113, refd to. [para. 21].

Statutes Noticed:

Employment Standards Act, R.S.O. 1980, c. 137, sect. 15 [para. 2].

Bankruptcy Act, R.S.C. 1970, c. B-3, sect. 47, sect. 107(1) [para. 2].

Constitution Act 1867, sect. 92(13) [para. 5].

Counsel:

C.H. Morawetz, Q.C., and A.B. Morawetz, for trustee in bankruptcy (appellant);

John G. Tait, Q.C., for Canadian Paper Workers Union, Local 908 (respondent);

Janet E. Minor, for Attorney General for Ontario and Director of Employment Standards (respondents);

John C. Medcof, for Attorney General for Canada (respondent).

This appeal was heard by Howland, C.J.O., Brooke and Tarnopolsky, JJ.A., of the Ontario Court of Appeal on October 4, 1983.

The judgment of the Court of Appeal was delivered by Tarnopolsky, J.A., and was released on December 9, 1983.