Ontario Labour Relations Board

[1982] OLRB Rep. December 1972

0109-82-R United Steelworkers of America, Applicant, v. U S L Industries Inc., Respondent

BEFORE: E. N. Davis, Vice-Chairman, and Board Members John Murray and W. F. Rutherford.

DECISION OF E. N. DAVIS, VICE-CHAIRMAN, AND BOARD MEMBER J. W. MURRAY; December 22, 1982

1. The Board, by a majority decision dated July 9th, 1982, dismissed the applicant's request for a declaration pursuant to section 63 of the Labour Relations Act. (See [1982] OLRB Rep. July 1080) Counsel for the applicant has filed an application for reconsideration of that decision, and in support thereof has made comprehensive submissions as to why the Board ought to, in the circumstances of this case, reconsider its original decision.

2. The majority of the Board found that there was not a sale of a business from the predecessor employer Universal to the alleged successor employer U S L Industries Inc. The Board in arriving at that decision, carefully reviewed the evidence that was tendered before it and the submissions of counsel made at the hearing of this matter.

3. In the request for reconsideration, counsel writes:

"It is respectfully submitted that the majority erred by reading into section 63 of the Act the requirement that, in order to find a "sale", the machinery, equipment, or other fixed assets of Universal had to be acquired and operated by Danbury Sales as a going concern. The fixed assets of Universal did not constitute its undertaking, nor did Danbury Sales use them for some purpose other than resale to U S L. Danbury merely held legal title to assets while Maurice Fagan took steps to acquire them, under a new corporate vehicle, for the express purpose of continuing the business of the Markham plant.”

[Emphasis added].

4. Counsel seeking reconsideration, (who was not counsel at the original hearing in this matter) asserts that U S L Industries Inc. engineered the transaction through the use of Danbury Sales Ltd. to acquire the business of Universal, without the union's bargaining rights or collective agreement. However, the evidence before the Board in this case simply did not disclose these facts, nor could the majority of the Board draw that inference from the facts established by the evidence. Furthermore, counsel for the applicant at the hearing, when given the opportunity by the Board to request further evidence from the respondent as to its role in the acquisition of the assets of Universal by Danbury chose not to do so. As the majority noted in paragraph 14 of its original decision:

"Danbury was not before the Board in this matter and we have no direct evidence as to the nature and scope of the transaction between Danbury and Richter and Partners Inc. as Receiver and Manager of Universal."

5. The evidence before the Board indicated that Richter and Partners Inc., the Receiver and Manager of the business of Universal, attempted to sell the business as a going concern but was unsuccessful. Thereupon it sold the assets of Universal by tender to Danbury Sales Ltd. There was no evidence before the Board upon which it could reasonably find that Danbury was acquiring those assets on behalf of U S L Industries Inc. or with the prior intention of selling them to U S L. Danbury Sales Ltd. did not purchase the business of Universal nor did it operate the business as a going concern. Furthermore, the only evidence before the Board of the relationship between U S L Industries Inc. and Danbury Sales Ltd. was given by Mr. Fagan who testified, as set out in paragraph 6 of the Board's decision:

"There was no connection of any kind between Danbury Sales and U S L."

That statement was not contradicted by any evidence received by the Board.

6. The balance of the submissions by counsel for the applicant argue that the Board erred by failing to attach sufficient weight to the role of Maurice Fagan, "the key man" in the Universal operation who is also "the key man" in U S L Industries Inc. and further that the Board failed to have regard to the entire series of transactions as a whole to find that there had been a transfer or sale of the business from Universal to U S L Industries Inc.

7. Counsel further submits that "Danbury acted as intermediary" and therefore in actuality, the business of Universal was transferred to or was acquired by U S L Industries Inc. The Board has considered the able submissions of counsel, but the majority cannot agree with them. While the role of Mr. Fagan in the transactions is significant, it is not determinative of the matter. Rather, the Board must have regard to what has actually taken place, based upon the evidence it received at the hearing. The evidence, in our view, does not support a finding that Mr. Fagan, although interested in acquiring the assets from Danbury, engineered a scheme through Danbury and Richter and Partners to acquire the business of Universal free of the union's bargaining rights. In our view, Danbury acted at arm's length in its purchase of assets from Universal, and further, acted at arm's length in the sale of those assets to U S L Industries Inc. There was not, in our opinion, a transfer of the business of Universal to either Danbury, or U S L Industries Inc.

8. While the Board has stated, as counsel for the applicant noted "that the interposition of a third party does not preclude a finding of a sale", a third party's acquisition of assets, and a subsequent sale of those assets does not necessarily give rise to a finding of a sale of a business. The majority of the Board was satisfied that, in this case, the evidence before the Board did not cause the Board to find nor to draw the inference that Danbury Sales was anything other than bona fide a purchaser of the assets of Universal who was seeking to sell those assets to any purchaser. The Board was satisfied on the evidence before that it could not sustain a finding that Danbury Sales acquired the assets of Universal for the purpose of reselling those assets to U S L Industries Inc. to permit it to continue Universal's business under a different corporate vehicle. Had that been the case, the Board's decision may well have been different.

9. It is our view that the request for reconsideration does not rely on additional evidence which could not have been reasonably available at the time of the hearing, nor does the applicant introduce arguments substantively different from those advanced at the hearing. For this reason the applicant's request for reconsideration is dismissed.

10. Board Member W. F. Rutherford, who dissented from the majority decision of July 9th, 1982, wishes to record his dissent from the instant decision.