Richmac Interiors Ltd. (Bankrupt), Re, (1996) 180 A.R. 183 (QB)

• Judge: Fraser, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 08, 1996
• Citations: (1996), 180 A.R. 183 (QB)

Richmac Interiors Ltd. (Bankrupt), Re (1996), 180 A.R. 183 (QB)

MLB headnote and full text

In The Matter Of The Bankruptcy of Richmac Interiors Ltd.

(Action No. 037297)

Indexed As: Richmac Interiors Ltd. (Bankrupt), Re

Alberta Court of Queen's Bench

In Bankruptcy

Judicial District of Calgary

Fraser, J.

February 8, 1996.

Summary:

A bankrupt company owed the Workers' Compensation Board for unpaid assessments. The Board appealed a decision of the trustee in bankruptcy denying its claim as a secured creditor under s. 136 of the Bankruptcy and Insolvency Act. The constitutionality of s. 126 of the Workers' Compensation Act was challenged as changing the scheme of dis­tribution under s. 136. If s. 126 was intra vires the province, an issue arose as to whether the Board was a Crown agent so as to be deprived of its security under s. 86 of the Bankruptcy and Insolvency Act.

The Alberta Court of Queen's Bench, in Bankruptcy, in a judgment reported 147 A.R. 310, held that the Board was a secured creditor under s. 136; ss. 126(1) and 126(2) were intra vires, but s. 126(3) was ultra vires and to be severed from s. 126; and the Board was not a Crown agent. Pri­ority between the bank that petitioned the bank­rupt into bank­ruptcy and the Board was left to be resolved.

The Alberta Court of Queen's Bench, In Bankruptcy, subsequently held that s. 126(2) of the Act gave the Board, as secured credi­tor, prior­ity over the bank's secur­ity.

Banks and Banking - Topic 5236

Loans - Secured loans (s. 427 loans) - Priorities - [See Workers' Compensation - Topic 9025 ].

Civil Rights - Topic 70

Interpretation - Individual defined - Sec­tion 1(a) of the Alberta Bill of Rights guaranteed "the right of the individual to liberty, security of the person and enjoy­ment of property, and the right not to be deprived thereof except by due process of law" - The Alberta Court of Queen's Bench, In Bankruptcy, held that "individ­ual" (unlike "per­son") excluded corpor­ations - Accord­ingly, a bank could not claim a violation of rights under s. 1(a) - See paragraphs 55 to 62.

Workers' Compensation - Topic 9025

Assessments - Priority of - Claims rank­ing behind workers' compensation assess­ments - Section 126(1) of the Workers' Compen­sation Act gave the Workers' Compensa­tion Board a charge "on the property or proceeds of property ... of the employer in Alberta, and on any other property or proceeds of property ... that is used by the employer in or in connection with, or produced by him in, the industry with respect to which he is assessed" - Section 126(2) gave the charge "priority over all ... security interests as defined in the Personal Property Security Act ... and other claims or encumbrances of whatever kind of any person ..." - The debtor employer was bankrupt - A bank held security under s. 178 (now s. 427) of the Bank Act, general assignment of book debts, etc. - The bank claimed priority on the basis of, inter alia, the paramountcy of the Bank Act, that s. 428(1) of that Act gave it priority and giving the Board pri­ority would constitute the taking of the bank's property without compensation - The Alberta Court of Queen's Bench, In Bankruptcy, held that s. 126(2) of the Workers' Compensation Act clearly gave the Board priority over the bank's security.

Words and Phrases

Individual - The Alberta Court of Queen's Bench, In Bankruptcy, held that "individ­ual", as found in s. 1(a) of the Alberta Bill of Rights, R.S.A. 1980, c. A-16, excluded corporations - See paragraphs 55 to 62.

Cases Noticed:

Jacs Jackets and Crest Ltd., Re; Workers' Compensation Board (Alta.) v. Deloitte, Haskins and Sells Ltd., [1985] 1 S.C.R. 785; 60 N.R. 81; 63 A.R. 321; 19 D.L.R.(4th) 577, refd to. [para. 6].

Alberta (Treasury Branches) v. Invictus Financial Corp. et al. (1986), 68 A.R. 207; 42 Alta. L.R.(2d) 181 (Q.B.), refd to. [para. 16].

Royal Bank of Canada v. Canadian Aero-Marine Industries Inc. (1989), 98 A.R. 367; 67 Alta. L.R.(2d) 172 (Q.B.), refd to. [para. 16].

Royal Bank of Canada v. Workmen's Compensation Board (N.S.), [1936] 4 D.L.R. 9 (S.C.C.), refd to. [para. 16].

Pigott Project Management Ltd. v. Alberta et al. (1993), 139 A.R. 295; 9 Alta. L.R.(3d) 349 (Q.B.), refd to. [para. 18].

Royal Bank v. R. (1984), 52 C.B.R.(N.S.) 198 (F.T.D.), affd. (1986), 60 C.B.R.(N.S.) 125 (F.C.A.), refd to. [para. 20].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120; [1990] 2 W.W.R. 193, refd to. [para. 23].

Canadian Imperial Bank of Commerce v. Surkan (1978), 11 A.R. 556; 5 Alta. L.R.(2d) 323 (Dist. Ct.), refd to. [para. 24].

Roynat Inc. v. Ja-Sha Trucking & Leasing Ltd. (Receivership)(No. 1) (1992), 76 Man.R.(2d) 211; 10 W.A.C. 211; 10 C.B.R.(3d) 41 (C.A.), refd to. [para. 24].

British Columbia v. Federal Business Development Bank, [1988] 1 W.W.R. 1 (B.C.C.A.), refd to. [para. 25].

Lloyds Bank of Canada v. International Warranty Co. (1989), 97 A.R. 113; 68 Alta. L.R.(2d) 356 (C.A.), refd to. [para. 26].

Minister of National Revenue v. Alberta (Treasury Branches) et al. (1994), 149 A.R. 34; 63 W.A.C. 34 (C.A.), refd to. [para. 28].

Canadian Imperial Bank of Commerce v. Klymchuk and Canadian Wheat Board, [1990] 5 W.W.R. 214; 106 A.R. 179 (C.A.), refd to. [para. 33].

Canadian Aero-Marine Industries Inc. (1989), 98 A.R. 367; 67 Alta. L.R.(2d) 172 (Q.B.), refd to. [para. 44].

LeBlanc Estate v. Bank of Montreal (1988), 69 Sask.R. 81; 54 D.L.R.(4th) 89 (C.A.), refd to. [para. 47].

Royal Bank of Canada v. Manitoba, [1978] 1 W.W.R. 712 (Q.B.), refd to. [para. 48].

Marr v. Marr Estate and Vallejos (1989), 101 A.R. 47; 63 D.L.R.(4th) 500 (Q.B.), refd to. [para. 57].

Holmes v. Minister of National Revenue et al. (1992), 12 B.C.A.C. 191; 23 W.A.C. 191; 90 D.L.R.(4th) 680 (C.A.), refd to. [para. 58].

Imperial Chemical Industries Plc et al. v. Apotex Inc. (1990), 36 F.T.R. 315; 31 C.P.R.(3d) 517 (T.D.), refd to. [para. 58].

R. v. Drybones, [1970] S.C.R. 282, refd to. [para. 61].

MacBain v. Lederman - see MacBain v. Canadian Human Rights Commission et al.

MacBain v. Canadian Human Rights Commission et al., [1985] 1 F.C. 856; 62 N.R. 117 (F.C.A.), refd to. [para. 61].

R. v. Lefthand (1985), 66 A.R. 331; 19 D.L.R.(4th) 720 (C.A.), refd to. [para. 61].

Curr v. R., [1972] S.C.R. 889, refd to. [para. 61].

N.C.C. v. Lapointe, [1972] F.C.R. 568, refd to. [para. 61].

Statutes Noticed:

Alberta Bill of Rights, R.S.A. 1980, c. A-16, sect. 1(a), sect. 2 [para. 55].

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 136 [para. 1].

Workers' Compensation Act, S.A. 1981, c. W-16, sect. 126(1)(e) [para. 36]; sect. 126.1(2) [para. 37].

Authors and Works Noticed:

Black's Law Dictionary (6th Ed. 1990), p. 773 [para. 57].

Driedger, Elmer A., Construction on Stat­utes (2nd Ed. 1983), pp. 183, 184 [para. 26].

Counsel:

David C. Whelan (Howard, Mackie), for the Royal Bank of Canada;

Michael J. Lema, for the Department of Justice (Edmonton) and the Attorney General as intervenor;

J.D. Carr and M. Gupta, for the Workers' Compensation Board (Edmonton).

This case was heard before Fraser, J., of the Alberta Court of Queen's Bench, In Bankruptcy, Judicial District of Calgary, who delivered the following judgment on Febru­ary 8, 1996.