Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, (1998) 221 N.R. 241 (SCC)

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Supreme Court (Canada)
• Judge: Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.
• Citation: (1998), 221 N.R. 241 (SCC),[1998] 1 SCR 27,DTE 98T-154,76 ACWS (3d) 894,1998 CanLII 837 (SCC),36 OR (3d) 418,154 DLR (4th) 193,221 NR 241,50 CBR (3d) 163,[1998] CarswellOnt 1,AZ-98111014,EYB 1998-04271,JE 98-201,[1998] FCJ No 2 (QL),[1998] SCJ No 2 (QL),106 OAC 1,[1998] ACS no 2,33 CCEL (2d) 173
• Date: 22 January 1998

Rizzo & Rizzo Shoes (Bankrupt), Re (1998), 221 N.R. 241 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [1998] N.R. TBEd. JA.003

Philippe Adrien, Emilia Berardi, Paul Creador, Lorenzo Abel Vasquez and Lindy Wagner on their own behalf and on behalf of the other former employees of Rizzo & Rizzo Shoes Limited (appellants) v. Zittrer, Siblin & Associates Inc., Trustees in Bankruptcy of the Estate of Rizzo & Rizzo Shoes Limited (respondent) and The Ministry of Labour for the Province of Ontario, Employment Standards Branch (party)

(24711)

Indexed As: Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re

Supreme Court of Canada

Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.

January 22, 1998.

Summary:

Rizzo & Rizzo Shoes Ltd. (Rizzo) was petitioned into bankruptcy. A receiver liqui­dated Rizzo's property and assets and closed the stores. The receiver paid all wages, salaries, commissions and vacation pay earned by employees up to the date on which the receiving order was made. The Minister of Labour filed a claim under s. 126(2) of the Bankruptcy and Insolvency Act for termination, severance and vacation pay on behalf of former employees of Rizzo. The trustee in bankruptcy refused the claim. The Minister appealed. The trial judge allowed the Minister's claim. The trustee in bank­ruptcy appealed. The Minister cross-appealed against a costs order.

The Ontario Court of Appeal, in a decision reported 80 O.A.C. 201, allowed the trustee's appeal. The court dismissed the Minister's cross-appeal. The Minister ap­pealed. Subsequently, the Minister discon­tinued the appeal. Former employees of Rizzo applied to set aside the discontinuance and add themselves as parties and sought leave to appeal. Their application was granted.

The Supreme Court of Canada allowed the appeal.

Bankruptcy - Topic 4484

Preferred creditors - Claims by Crown - For wages - Termination, severance and vacation pay - An employer was petitioned into bankruptcy by a creditor - The em­ployees lost there jobs when a receiving order was made against the employer's property and assets - The Minister of Labour filed a claim under s. 126(2) of the Bankruptcy and Insolvency Act on behalf of former employees for termination, severance and vacation pay allegedly owed under the Employment Standards Act (ESA) - The trustee refused the claim on the ground that the bankruptcy of the employer did not constitute a dismissal and, therefore, no entitlement to severance, termination or vacation pay was created under the ESA - The Supreme Court of Canada held that termination under the ESA included termination resulting from the bankruptcy of the employer.

Master and Servant - Topic 1884

Remuneration - Severance pay - En­titlement to - [See Bankruptcy - Topic 4484 ].

Master and Servant - Topic 1982

Remuneration - Vacation pay - Entitlement to - [See Bankruptcy - Topic 4484 ].

Master and Servant - Topic 8306

Employment and labour standards - Gen­eral - Purpose of legislation - The Supreme Court of Canada stated that the object of the Employment Standards Act and par­ticularly of the termination and severance pay provisions (ss. 40 and 40a) were premised upon the need to protect em­ployees - Therefore, the Act was benefits-conferring legislation and had to be inter­preted in a broad and generous manner - Any doubt arising from difficulties of language had to be resolved in favour of the claimant - An overly restrictive ap­proach was inconsistent with the scheme of the Act - See paragraphs 24, 25, 36.

Master and Servant - Topic 8307

Employment and labour standards - Gen­eral - Interpretation of legislation - [See Master and Servant - Topic 8306 ].

Master and Servant - Topic 8402

Employment and labour standards - Layoff or dismissal - What constitutes - [See Bankruptcy - Topic 4484 ].

Master and Servant - Topic 8442

Employment and labour standards - Layoff or dismissal - Payments or compensation - Entitlement - [See Bankruptcy - Topic 4484 ].

Master and Servant - Topic 8448

Employment and labour standards - Layoff or dismissal - Payments or compensation - Severance or termination pay - [See Bank­ruptcy - Topic 4484 ].

Practice - Topic 7035.1

Costs - Party and party costs - Entitlement to - Against the Crown or governmental bodies - The Minister of Labour filed a claim under s. 126(2) of the Bankruptcy and Insolvency Act for termination, severance and vacation pay on behalf of former employees of a bankrupt - The trustee in bankruptcy refused the claim - The trial judge allowed the Minister's appeal - The trustee in bankruptcy ap­pealed - The Ontario Court of Appeal allowed the trustee's appeal - The Minister appealed but subsequently discontinued the appeal - Former employees of the bankrupt applied to set aside the discontinuance and add themselves as parties and sought leave to appeal - Their application was granted - The Supreme Court of Canada allowed the appeal - The court ordered the Minster to pay the employees' costs on appeal on a party and party basis - See paragraph 43.

Practice - Topic 7043

Costs - Party and party costs - Entitlement to - On discontinuance or abandonment - [See Practice - Topic 7035.1 ].

Statutes - Topic 523.1

Interpretation - General principles - Bene­fits-conferring legislation - [See Master and Servant - Topic 8306 ].

Statutes - Topic 1641

Interpretation - Extrinsic aids - Legislative history - The Supreme Court of Canada stated that "the use of legislative history as a tool for determining the intention of the legislature is an entirely appropriate exer­cise" - See paragraph 31.

Cases Noticed:

United Food & Commercial Workers, Local 617P v. Royal Dressed Meats Inc. (Trustee of) (1989), 76 C.B.R.(N.S.) 86 (Ont. S.C. Bktcy.), refd to. [para. 7].

Malone Lynch Securities Ltd., Re, [1972] 3 O.R. 725 (S.C. Bktcy.), dist. [para. 14].

Kemp Products Ltd., Re (1978), 27 C.B.R.(N.S.) 1 (Ont. S.C. Bktcy.), dist. [para. 14].

R. v. Hydro-Québec, [1997] 1 S.C.R. 213; 217 N.R. 241, refd to. [para. 21].

Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411; 208 N.R. 161; 193 A.R. 321; 135 W.A.C. 321, refd to. [para. 21].

Verdun v. Toronto-Dominion Bank, [1996] 3 S.C.R. 550; 203 N.R. 60; 94 O.A.C. 211, refd to. [para. 21].

Friesen v. Minister of National Revenue, [1995] 3 S.C.R. 103; 186 N.R. 243, refd to. [para. 21].

Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; 136 N.R. 40; 53 O.A.C. 200, refd to. [para. 24].

Machtinger v. HOJ Industries Ltd. - see Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd.

Wallace v. United Grain Growers Ltd. (1997), 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1 (S.C.C.), refd to. [para. 24].

R. v. TNT Canada Inc. (1996), 87 O.A.C. 326; 27 O.R.(3d) 546 (C.A.), refd to. [para. 26].

Telegram Publishing Co. v. Zwelling (1972), 1 L.A.C.(2d) 1 (Ont. E.S.D. Bd.), refd to. [para. 26].

R. v. Vasil, [1981] 1 S.C.R. 469; 35 N.R. 451, refd to. [para. 31].

R. v. Paul, [1982] 1 S.C.R. 621; 42 N.R. 1, refd to. [para. 31].

R. v. Morgentaler, [1993] 3 S.C.R. 463; 157 N.R. 97; 125 N.S.R.(2d) 81; 349 A.P.R. 81, refd to. [para. 35].

Abrahams v. Canada (Attorney General), [1983] 1 S.C.R. 2; 46 N.R. 185, refd to. [para. 36].

Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513; 84 N.R. 86, refd to. [para. 36].

Director of Employment Standards (B.C.) v. Eland Distributors Ltd. (Trustee of) (1996), 40 C.B.R.(3d) 25 (B.C.S.C.), refd to. [para. 38].

Mills-Hughes et al. v. Raynor et al. (1988), 25 O.A.C. 248; 63 O.R.(2d) 343 (C.A.), not folld. [para. 39].

R. v. D.A.Z., [1992] 2 S.C.R. 1025; 140 N.R. 327; 131 A.R. 1; 25 W.A.C. 1, refd to. [para. 40].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 121(1) [para. 6].

Employment Standards Act, R.S.O. 1980, c. 137, ss. 7(5), 40(1), 40(7)(a), 40a(1) [para. 6].

Employment Standards Amendment Act, 1981, S.O. 1981, c. 22, s. 2(3) [para. 6].

Interpretation Act, R.S.O. 1990, c. I-11, ss. 10, 17 [para. 6].

Authors and Works Noticed:

Christie, Innis, England, Geoffrey and Cotter, Brent, Employment Law in Cana­da (2nd Ed. 1993), pp. 572 to 581 [para. 25].

Côté, Pierre-André, Interpretation of Legis­lation in Canada (2nd Ed. 1991), generally [para. 21].

Driedger, Elmer A., Construction of Stat­utes (2nd Ed. 1983), p. 87 [para. 21].

Driedger, Elmer A., Construction of Stat­utes (3rd Ed. 1994), p. 88 [para. 27].

Ontario, Hansard, Legislative Assembly, Debates, No. 36, 1st Sess., 32nd Parl. (June 4, 1981), pp. 1236, 1237 [para. 34].

Ontario, Hansard, Legislative Assembly, Debates, No. 48, 1st Sess., 32nd. Parl. (June 16, 1981), p. 1699 [para. 34].

Sullivan, Ruth, Statutory Interpretation (1997), generally [para. 21].

Counsel:

Steven M. Barrett and Kathleen Martin, for the appellants;

Raymond M. Slattery, for the respondent;

David Vickers, for the Ministry of Labour for the Province of Ontario, Employment Standards Branch.

Solicitors of Record:

Sack, Goldblatt, Mitchell, Toronto, On­tario, for the appellants;

Minden, Gross, Grafstein & Greenstein, Toronto, Ontario, for the respondent;

Attorney General for Ontario, Toronto, Ontario, for the Ministry of Labour for the Province of Ontario, Employment and Standards Branch.

This appeal was heard on October 16, 1997, before Gonthier, Cory, McLachlin, Iacobucci and Major, JJ., of the Supreme Court of Canada.

The decision of the Court was delivered in both official languages by Iacobucci, J., on January 22, 1998.