Ontario Labour Relations Board

[1983] OLRB Rep. March 441

1675-82-R London & District Service Workers' Union, Local 220, AFL, CIO, CLC, Applicant, v. Price Waterhouse Limited and The Maritime Life Assurance Company, Respondents

BEFORE: R. A. Furness, Vice-Chairman, and Board Members B. L. Armstrong and E. J. Brady.

APPEARANCES: David Starkman, Paul Middleton and Bernie Hanson for the applicant; R. Budd and B. Grossman for Price Waterhouse Limited; Philip Spencer, Q.C. for The Maritime Life Assurance Company.

DECISION OF THE BOARD; March 4, 1983

1. The applicant has applied to the Board under section 63 of the Labour Relations Act with respect to its bargaining rights. The applicant has alleged that on or about February 16, 1982, there was a sale of a business by Chateau Gardens (Hanover) Inc. ("Chateau") to Price Waterhouse Limited ("Price") and The Maritime Life Assurance Company ("Maritime"). It was the position of the applicant that as a result of this alleged sale the respondents are bound by a collective agreement entered into by the applicant and Chateau.

2. In a letter dated December 23, 1982, the applicant informed the Board that it wished to make representations as to the application of section 1(4) of the Act.

3. Price adopted the position that the applicant is not entitled to bring this application before the Board because it did not apply for and obtain leave of the Supreme Court of Ontario upon notice to Price of its intention to make this application and has not applied to the Court pursuant to paragraph six of the order of The Honourable Mr. Justice Anderson made on February 16, 1982. Price also adopted the position that the Board is without jurisdiction to enforce the obligations of Chateau under the terms of the collective agreement. Price also denied that (i) it had entered into a sale within the meaning of section 63 in respect of 101 — 10th Street, Hanover; or that (ii) the business of Chateau was sold, transferred, leased or in any other manner disposed of by Chateau to Price.

4. Maritime denied that (i) it has entered into any sale with respect to any assets, business or undertaking of Chateau or that (ii) the business of Chateau was sold, transferred, leased or in any other manner disposed of by Chateau to Maritime. It was the position of Maritime that it has never been in possession or control of Chateau or any of its business, assets or undertaking. Maritime also adopted the position that it has never managed, directed, operated or otherwise had any relationship with Chateau or any of its business, assets or undertaking, other than as a secured creditor under a debenture dated May 24, 1979. Maritime further adopted the position that it has never been either an agent or a principal for Chateau and denied that it has ever had any other interest in Chateau or any of its business, assets or undertaking. In disputing the jurisdiction of the Board to enforce the obligation of Chateau or its successors, assigns, administrators or receivers, under the terms of the collective agreement, as against Maritime; Maritime stated that Price had never been its agent.

5. It was agreed by the parties that the Board should initially determine whether it has jurisdiction to entertain this application. In a decision dated February 2, 1983, the Board stated that, for reasons to be given in writing, it had jurisdiction to hear this application. The reasons for the decision dated February 2, 1983, are now set forth.

6. The facts which form the basis of this application are not in dispute. On May 24, 1979, Chateau was operating a nursing home in Hanover, and on that date it executed a debenture in favour of Maritime. On December 1, 1980, the applicant was certified by the Board to represent full-time employees of Chateau at Hanover. On December 8, 1980, the applicant gave notice to bargain to Chateau and bargaining between the applicant and Chateau continued during 1981. In August of 1981, the matter of a collective agreement was referred to arbitration under the Hospital Labour Disputes Arbitration Act. On February 12, 1982, Price was appointed receiver and manager of Chateau by Maritime pursuant to the debenture. On February 16, 1982, pursuant to an application by Maritime; the Supreme Court of Ontario, by the order of Anderson, J., appointed Price the receiver and manager of Chateau.

7. Shortly after its appointment, Price assumed total control of the operations of Chateau. Price informed the employees that operations would continue and that Price would be responsible for the payment of their wages. On April 20, and 21, 1982, the board of arbitration established pursuant to the Hospital Labour Disputes Arbitration Act rendered its decision on July 19, 1982. On October 8, 1982, the applicant was certified by the Board for part-time employees of Chateau. The collective agreement which was settled by arbitration expired on December 1, 1982, and the applicant gave notice to bargain on November 18, 1982, with respect of the full-time employees for a new collective agreement. On October 12, 1982, the applicant gave notice to bargain with respect to the part-time employees.

8. Paragraph 6 of the order of Anderson, J., dated February 16, 1982, states:

AND THIS COURT DOTH FURTHER ORDER that no person, firm or corporation shall levy or continue any distress, take or continue any action at law or other proceeding against Chateau Gardens (Hanover) Inc. and Chateau Gardens (Hanover II) Inc. in relation to the subject property, except this action, or the receiver and manager whether for the collection of a debt or the cancellation or termination of any agreement to which Chateau Gardens (Hanover) Inc. and Chateau Gardens (Hanover II) Inc. is a party without leave of this court first being obtained upon application made on seven clear days' notice to the receiver and manager and that no person, firm or corporation shall otherwise interfere with the carrying on of the business of Chateau Gardens (Hanover) Inc. and Chateau Gardens (Hanover II) Inc. in relation to the subject property by the receiver and manager.

10. This proceeding before the Board is an application under section 63 of the Act for a declaration that one or both of the respondents is or are successor employers and bound by the terms of the collective agreement entered into by Chateau. In our view, a proceeding under section 63 is not an "action at law or other proceeding ... in relation to the subject property ... whether for the collection of a debt or the cancellation or termination of any agreement". The present action is declaratory in nature and, if granted, will set forth the nature of the relationship between the parties to this proceeding. This proceeding in itself is neither an action in debt nor a cancellation or termination of any agreement. On this interpretation, paragraph 6 of the order of Anderson, J., dated February 16, 1982, has no application. However, the Board may be wrong in this interpretation. It may be argued that the issuance of a declaration under section 63 is merely the first step in a further proceeding for the recovery of a debt or monies under a collective agreement and that the instant and subsequent proceedings may be considered as essentially one proceeding. The Board therefore proposes to examine the arguments of the parties having regard to these additional considerations.

11. The respondent relied heavily on the case of International Woodworkers of America, Local 1324 v. Wescanna Inn Ltd. and The Clarkson Company Limited 1977 CanLII 2247 (MB CA), [1978] 1 W.W.R. 679 in the Manitoba Court of Appeal which reversed a decision of Wright J., in Court of Queen's Bench. In that case, The Clarkson Company Limited had been appointed receiver and manager of Wescanna Inn Ltd. The order appointing The Clarkson Company Limited stated that "And This Court Doth Further Order that no action at law or other proceeding shall be taken or continued against the Defendant or the said Receiver and Manager without leave of this Court first being obtained." The International Woodworkers of America, Local 1-324, applied to the Manitoba Labour Board to be certified as the bargaining agent for the employees working at the Wescanna Inn. The Manitoba Labour Board suggested that it would be appropriate to seek leave of the Court of Queen's Bench before proceeding with the merits.

12. It was held by Wright, J., that leave was not necessary since an application for certification was not an "action at law or other proceeding taken or continued against the defendant (Wescanna Inn Ltd.) or the receiver, Clarkson." At page 683, O'Sullivan, J.A., stated:

I agree that the word "proceeding" is one of those words of very wide import that must be interpreted according to the context in which it is used. I do not think that the ejusdem generis principle or, perhaps more correctly, the noscitur a socilis maxim is decisive. The order is designed to give protection to the receiver-manager appointed by the court in the conduct of his business as a receiver-manager, and I hold that the term "proceeding" in the receivership order embraces a proceeding before the Manitoba Labour Board to obtain certification as a certified bargaining agent.

Counsel for the union also submitted that, even if "proceeding" includes "certification applications," it cannot be said that an application for certification is one taken "against" an employer. He made an attractive argument for the view that the Manitoba Labour Relations Act contemplates that certification is a means of ensuring labour-management harmony and that collective bargaining cannot be considered an adversary procedure. However that may be, I am satisfied that what is contemplated by the receiving order is that leave is necessary for any proceeding which may affect the receiver-manager in the carrying on his business and, therefore, I conclude, contrary to the decision of the learned Queen's Bench Judge, that an application for certification is "a proceeding taken or continued against the Defendant or the Receiver and Manager."

O'Sullivan J.A., was joined by Freedman, C.J.M. in allowing the appeal to the extent of varying the order appealed from to delete the declaration set out and to substitute provision for leave to the International Woodworkers of America, Local 1-324, to continue its application for certification. In granting leave, the majority was mindful of the fact that the appointment of the receiver and manager was not for a limited period. Monnin, J.A., concluded that the receiving order contemplated that leave from the court was necessary for any proceeding or type of proceedings of any nature whatsoever which might affect the receiver and manager in the carrying on of his business. He disagreed with the majority, however, in holding that leave should not be given to the International Woodworkers of America, Local 1-324.

13. For at least the past thirty-five years, the Board has entertained applications for certification and declarations in situations where a receiver and a manager have been involved. See, for example, Guaranty Trust Co. of Canada 47 CLLC ¶16,500; Gravelle Brick Company Limited, [1965] OLRB Rep. April 50; Mount Citadel Limited, [1976] OLRB Rep. July 367; and The Toronto-Dominion Bank and Price-Waterhouse Limited, [1979] OLRB Rep. Jan. 50. In Guaranty Trust Co. of Canada, supra, the order appointing a receiver and manager contained the following provision:

AND THIS COURT DOTH FURTHER ORDER that no action at law or other proceeding shall be taken or continued against the Defendants or either of them or the said Receiver and Manager with respect to the said property and assets without leave of this Court first being obtained.

A trade union had applied for certification as a bargaining representative. The Board, over the objection of the receiver and manager, held that leave of the court was not necessary and stated:

The respondent, it would appear, bases its second objection upon the ground that the ultimate effect of the present petition may be to diminish the assets which it administers, a result to which it feels it cannot contribute without prior approval of the Court. We would point out that the Board's certificate does not direct the employer to do anything; the Board merely makes findings of fact and certifies bargaining representatives. Should certification be followed by the request of the bargaining representatives that the respondent enter into negotiations with a view to the completion of a collective agreement the respondent must, it is clear, meet and negotiate in good faith with them. However, it cannot seriously be urged that the Board should indulge in conjecture as to the possible outcome of any negotiations which may take place. Considerations of such a hypothetical nature cannot enter into the Board's determination of the issue now before it. It is therefore our conclusion that the objections raised by the respondent are not well founded.

14. The instant proceeding is apparently the first occasion in more than thirty-five years where the jurisdiction of the Board has been challenged when a receiver and manager has been appointed by the Supreme Court of Ontario with a provision in the order of the type referred to in paragraph 9 of this decision.

15. The Manitoba Court of Appeal in International Woodworkers of America, Local 1-324 v. Wescanna Inn Ltd. and The Clarkson Company Limited, supra, clearly gave a broad meaning of the word "proceeding." However, the provisions in the order therein are quite general and terse. In the instant case, the provision in the order of Anderson, J., is less general and in its length is more specific, as stated earlier on the issue of when the leave of the court is to be obtained. Even allowing for a broad interpretation of the provision in the order under consideration, there are statutory provisions in Ontario which were not before the Manitoba Court of Appeal. Sections 106(1) and 108 of the Labour Relations Act, R.S.O. 1980, c.228, provide:

106.-(l) The Board has exclusive jurisdiction to exercise the powers conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it, and the action or decision of the Board thereon is final and conclusive for all purposes, but nevertheless the Board may at any time, if it considers it advisable to do so, reconsider any decision, order, direction, declaration or ruling made by it and vary or revoke any such decision, order, direction, declaration or ruling.

108. No decision, order, direction, declaration or ruling of the Board shall be questioned or reviewed in any court, and no order shall be made or process entered, or proceedings taken in any court, whether by way of injunction, declaratory judgment, certiorari, mandamus, prohibition, quo warranto, or otherwise, to question, review, prohibit or restrain the Board or any of its proceedings.

16. Section 106(1) confers exclusive jurisdiction on the Board to exercise the powers conferred upon it by or under the Act and to determine all questions of fact or law that arise in any matter before it, and section 108 provides that no decision, order, direction, declaration or ruling of the Board shall be questioned or reviewed in any court, and no order shall be made or process entered, or proceedings taken in any court to question, review, prohibit or restrain the Board or any of its proceedings. The making of an application for the leave of the court could or would constitute a questioning, reviewing, prohibiting or restraining the Board or its proceedings within the meaning of section 108. The exclusive jurisdiction of the Board has been protected by the Legislature and, in our view, the protection afforded by section 108 is sufficiently stated so that the leave of the court is not required by the applicant before it may file and present this application before the Board.

17. The Registrar is directed to list this matter for continuation of hearing on the merits.