Stanton et al. v. Reliable Printing Ltd. et al., (1994) 152 A.R. 372 (QB)

• Judge: Veit, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 18, 1994
• Citations: (1994), 152 A.R. 372 (QB)

Stanton v. Reliable Printing Ltd. (1994), 152 A.R. 372 (QB)

MLB headnote and full text

In The Matter Of The Business Corporations Act, being Chapter B-15 of the Statutes of Alberta, 1981 and amendments thereto;

And In The Matter Of Reliable Printing Ltd.

Reginald James Stanton and Aspen Holdings Ltd. (applicants) v. Reliable Printing Ltd., Lace Properties Ltd. and James Wallace (respondents)

(Action No. 9303 09315)

Indexed As: Stanton et al. v. Reliable Printing Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Veit, J.

February 28, 1994.

Summary:

Reliable Printing Ltd. was wound up and a receiver was appointed. Reliable's assets were sold. Reliable's unionized employees claimed priority to the funds available for distribution, arguing that their employer had a fiduciary duty to protect their severance entitlements. The unsecured trade creditors claimed that the employees and the trade creditors should share pro rata. The receiver applied for advice and directions about how to distribute the funds.

The Alberta Court of Queen's Bench held that the unionized employees were entitled to priority.

Company Law - Topic 8642

Winding-up legislation - Creditors - Priorities - [See Equity - Topic 3606 ].

Equity - Topic 3606

Fiduciary or confidential relationships - What constitutes a fiduciary relationship - Reliable Printing Ltd. was wound up and its assets were sold - Reliable's unionized employees claimed priority to the funds available for distribution over unsecured trade creditors, arguing that their employer had a fiduciary duty to protect the sever­ance entitlements built up by the employees - Several employees had long careers at Reliable (upwards of 35 years) - The Alberta Court of Queen's Bench de­termined that the unionized employees had priority over the funds - The court held that a fiduciary relationship was created between the employer and its unionized employees and that in the cir­cumstances, the fiduciary obligation was limited to requiring that the employer safeguard the severance entitlements of its unionized employees.

Equity - Topic 3727

Fiduciary or confidential relationships - The employer-employee relationship - Duty of employer regarding employees' severance entitlements - [See Equity - Topic 3606].

Master and Servant - Topic 301

Nature of relationship - General - [See Equity - Topic 3606 ].

Master and Servant - Topic 1884

Remuneration - Severance pay - Entitle­ment to - [See Equity - Topic 3606 ].

Master and Servant - Topic 2602

Duties of master - General - Fiduciary duty - [See Equity - Topic 3606 ].

Cases Noticed:

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re (1991), 119 A.R. 330 (Q.B.), refd to. [para. 8].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; [1984] 6 W.W.R. 481, refd to. [para. 8].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14, appld. [para. 8].

Electro Auto-Lite, Re (1957), 7 L.A.C. 331, refd to. [para. 8].

Journeymen Stone Cutters' Association, Toronto, Local 1 v. Ritchie Cut Stone Co. (1966), 17 L.A.C. 202, refd to. [para. 8].

Metro Toronto (Municipality) v. Toronto Civic Employees' Union, Local 43 (1975), 10 O.R.(2d) 37 (Div. Ct.), refd to. [para. 8].

United Food and Commercial Workers' International Union v. National Bank (1983), 48 C.B.R.(N.S.) 38 (Ont. L.R.B.), refd to. [para. 8].

Uncle Ben's Industries Ltd. and Prince George Breweries Ltd., Re, [1979] 2 Can. L.R.B.R. 126 (B.C.L.R.B.), refd to. [para. 8].

Jirna Ltd. v. Mister Donut of Canada Ltd. (1973), 40 D.L.R.(3d) 303 (S.C.C.), refd to. [para. 8].

International Woodworkers of America, Local 1-324 v. Wescana Inn Ltd. (1977), 82 D.L.R.(3d) 368 (Man. C.A.), refd to. [para. 8].

Lewis's Department Stores Ltd., Re (1972), 17 C.B.R.(N.S.) 113 (Ont. S.C.), refd to. [para. 8].

Hamilton Harvey Ltd., Re, [1975] W.W.D. 174; 21 C.B.R.(N.S.) 234 (B.C.S.C.), refd to. [para. 8].

Rizzo and Rizzo Shoes Ltd., Re (1991), 6 O.R.(3d) 441; 92 C.L.L.C. 14,013 (Gen. Div.), refd to. [para. 8].

Wilcox and Marshall v. G.W.G. Ltd., [1984] 4 W.W.R. 70; 53 A.R. 161 (Q.B.), refd to. [para. 8].

Luscar Ltd. and Norcen Energy Resources Ltd. v. Pembina Resources Ltd. (1991), 122 A.R. 83; 85 Alta. L.R.(2d) 46 (Q.B.), refd to. [para. 8].

Statutes Noticed:

Business Corporations Act, S.A. 1981, c. B-15, sect. 95(e) [para. 9].

Employment Standards Code, S.A. 1988, c. E-10.2, preamble [para. 32], sect. 58 [para. 16].

Labour Relations Code, S.A. 1988, c. L-1.2, preamble [para. 32].

Authors and Works Noticed:

Holden and Morowitz, Annotated Bank­ruptcy and Insolvency Act (1994), p. 297 [para. 8].

Counsel:

M.D. Roberts, for the Receiver Near, Hor­bay & Associates Ltd.;

G.B. Gawne, for the applicant union;

K.G. Heintz, for the applicant trade credi­tor.

This case was heard on February 18, 1994, before Veit, J., of the Alberta Court of Queen's Bench, Judicial District of Edmon­ton, who delivered the following decision on February 28, 1994.