United Food & Commercial Workers International Union, Local 617P v. Crown Packers & Realties Ltd.
[1988] OLRB Rep. August 752
3136-87-U and 3137-87-R United Food & Commercial Workers International Union, Local 617P, Complainant/Applicant v. Crown Packers & Realties Ltd., Crown Meat Packers Limited, Crown Dressed Meats Inc., Respondents
BEFORE: Louisa M. Davie, Vice-Chair, and Board Members T. Meagher and D. Wozniak.
APPEARANCES: Michael Mitchell, Tanya Lee and Steve Szuba for the complainant/applicant; R. C. Filion and Lou Levine for the respondents.
DECISION OF THE BOARD; August 8, 1988
1By agreement of the parties Crown Meat Packers Limited and Crown Dressed Meats Inc. are added as respondents to this application.
2This is an application pursuant to section 63 of the Labour Relations Act ("the Act"). Local 617P of the United Food and Commercial Workers International Union alleges that the respondents are successor employers to Royal Dressed Meats Inc. The applicant has also filed a concurrent application pursuant to section 89 of the Act in which it alleges that the respondents have violated sections 64, 66, 70 and 50 of the Act (Board File No. 3136-87-U). The thrust of the section 89 complaint is that the respondents have failed to recognize the union, have failed to apply the terms and conditions of the collective agreement between the trade union and the predecessor employer Royal Dressed Meats Inc., and have bargained with and agreed to terms and conditions with individual employees which are different than the terms and conditions of that collective agreement. At the hearing into these matters, the parties agreed that in the event that we determine that a sale of a business within the meaning of section 63 of the Act has occurred, and the respondents are found to be the successor employer, this Board remain seized to deal with the section 89 complaint and the issue of remedy including compensation for the respondents' failure and refusal to recognize the applicant or adhere to the terms and conditions of the collective agreement. The corollary to that is if the Board finds that a sale of a business within the meaning of section 63 of the Act has not occurred, in the circumstances of this case, the Board cannot then find any violations of the Labour Relations Act and the section 89 complaint should be dismissed.
3The only witness to testify during the course of the hearing was Mr. Louis Levine. The parties were able to agree upon certain facts which obviated the need for viva voce evidence. The Board found Mr. Levine to be a credible witness who gave his evidence in an open and forthright manner. In making our findings of fact as set forth herein, we have considered the usual factors including the consistency of Mr. Levine's evidence, his demeanour while testifying, his responses in cross-examination, his ability to resist the influence of self-interest to modify his recollection and what appears to be reasonable probably when the circumstances, his testimony and the agreed upon facts are considered. Our findings of fact are as follows.
4Mr. Levine is the President, Chief Executive Officer and Chief Operating Officer of Crown Packers and Realities Ltd. ("CPR"), Crown Meat Packers Limited ("CMP") and Crown Dressed Meats Incorporated ("CDM"). He also owns all the shares of each of these companies. CPR was established in 1979. For purposes of this application it is sufficient to note that this company signed the offer to purchase the property and assets of Royal Dressed Meats Inc. ("RDM") from the trustee in bankruptcy. CMP was incorporated in 1978 and was Mr. Levine's operating company until January 1988. It was CMP which ultimately purchased the assets of RDM from the trustee. CMP owns the rolling stock, pays the bills for the operation of the plant and is, generally speaking, the company used by Mr. Levine to operate the plant and the property. CDM was incorporated in December 1987. From February 1988 to the present this company has continued the meat wholesale operations previously operated by CMP. When asked in cross-examination as to the purpose of setting up this third company, Mr. Levine indicated that it was designed to keep the physical assets separate from the operation of his meat wholesale business.
5Mr. Levine through his various companies has been in the wholesale meat packing business for the past ten years. As a wholesale meat packer, Mr. Levine purchases live stock, arranges for it to be killed and, after delivery of the slaughtered livestock cuts the meat, processes it into wholesale sizes and then sells it to retailers. Originally he operated from leased premises at Toronto Abattoirs. Toronto Abattoirs leased to Mr. Levine the space which he needed to hold product from the time of receipt, through the processing stage, until it was ultimately shipped to the retailer. In the wholesale meat packing business in which Mr. Levine engages when a company "leases" facilities, it generally leases "rails" in a cooler. The "rails" refer to the railing equipment in the cooler from which slaughtered livestock hangs. Federal regulations determine the positioning of the rails. Rails must meet government specifications as to height above floor level and the width of space between the rails. In addition to providing two "rails", Toronto Abattoirs also slaughtered the livestock. As the livestock was custom killed for Mr. Levine he required neither the space nor the equipment normally associated with a slaughter house or abattoir. Toronto Abattoirs charged a per head fee for each animal slaughtered. In addition to the "rails" in the cooler and the loading dock which accompanied the rental of such rails, the only equipment needed to operate a wholesale meat packing business are breaking saws to break the carcass of the slaughtered livestock, vacuum packing equipment, scales, rolling stock for deliveries, office equipment for the administrative duties associated with the operation of the business and supplies including paper, boxes and other packaging supplies. This equipment was owned by Mr. Levine.
6In December 1979 Mr. Levine transferred his operations from Toronto Abattoirs to The Beef Terminal which is also situated in Toronto. The Beef Terminal leases "rails" to a number of other operators in the wholesale meat packing industry and is a similar facility to the facility owned by Toronto Abattoirs. At the Beef Terminal Mr. Levine leased six rails. Mr. Levine's livestock was custom killed at the Beef Terminal and a per head, per kill fee was remitted to the Beef Terminal.
7As a result of a series of events which need not be detailed here, Mr. Levine determined to leave The Beef Terminal. He started to look for alternative sites from which to continue his operations. In October 1987 Mr. Levine saw an advertisement which had been placed in the Globe & Mail by Thome, Ernst & Whinney in its capacity as trustee in bankruptcy of RDM. The advertisement offered for sale the real estate, equipment and supplies of the federally inspected boxed beef processing plant; specified that "en block" offers would be given special consideration; and referred to these assets as comprising a "turn key operation". Interested persons were asked to contact one of two named individuals for further information and/or an appointment to view and to submit written proposals on or before Thursday, October 23, 1987.
8After he saw the advertisement, Mr. Levine contacted Mr. Dan Girardi one of the two named individuals. He subsequently attended at the property, inspected the property and the plant, received an information package which contained greater details of the property, the plant and its equipment, and eventually put in an offer to purchase. This offer was rejected when the trustee accepted a higher offer from a different bidder. Mr. Levine however maintained contact with Mr. Girardi. His persistence eventually enabled him to put in a subsequent offer to purchase, which was accepted. This situation arose when the initially successful bidder was unable to arrange suitable financing and the trustee reopened the matter for new bids. By agreement dated November 27, 1987, CPR agreed to purchase "all of the trustees interest and all property and assets of Royal Dressed Meats Inc."
9It is important to outline in some detail what was acquired by Mr. Levine as a result of this transaction. The property itself is a plant located on 6.97 acres of land. Its municipal address is 556 Speedvale Avenue West in the City of Guelph. As it developed some importance at the hearing, as discussed below, it is relevant to note that the property is subject to two types of zoning. One portion of the property is zoned Ml. The initial newspaper advertisement refers to the property in the following manner, "the plant is located on 6.97 acres of land, a substantial portion of which could be severed as prime industrial/commercial/residential land without impacting on the existing operation."
10In addition to the land, Mr. Levine also acquired the building situated on the land, and the machinery, equipment and vehicles of RDM. The building itself is a free standing building consisting of plant and office space of approximately 25,000 square feet. The list of equipment and supplies is extensive and need not be detailed here. It is sufficient to note that the equipment and supplies required are sufficient to enable a person to immediately commence a wholesale meat packing business. Some of the equipment purchased is of the same or similar nature to the equipment leased by Mr. Levine at The Beef Terminal. Some of the equipment is superfluous to the respondents' operation. For example, although the plant has a kill floor area, the respondents' operation does not require such an area. Another unrelated corporate entity continues to custom kill livestock for the respondents. Finally, some of the equipment is redundant as it is equipment of the same or similar type as equipment already owned by Mr. Levine i.e., the rolling stock.
11Mr. Levine candidly and readily admitted both in examination-in-chief and in cross-examination that the property, plant and equipment was much more than he required to operate his business. He testified however that he did hope to expand and increase his operations to double the size of his operations at The Beef Terminal in Toronto. He testified that he purchased the property as an investment and indicated that he could sever and sell that portion of the property which he does not need to operate the business. That portion of the property is zoned MI. Mr. Levine was of the opinion that its sale alone would net him a profit. In this regard, he testified that the next highest bid to his came from a real estate development company which had no connections to the meat packing business. That company's bid was not substantially lower than his own. An inference can be drawn that the land in and of itself, irrespective of the meat packing business situated upon it, is an extremely valuable commodity.
12Notwithstanding the fact that the plant and equipment which he acquired were sufficient to operate a meat packing company approximately seven or eight times the size of his, Mr. Levine has not sold or otherwise disposed of any of the equipment in the plant. In his view to sell isolated assets would not necessarily make good business sense. It is his opinion that the sale value of the assets are insufficient to warrant their immediate disposal and the assets are of greater value to him to retain as spares or as a source for replacement parts in the event the equipment he does use breaks down. Mr. Levine has considered leasing the office facilities attached to the plant as fully furnished offices, but to date has not acted upon this opportunity citing the fact that he has only owned the facility for less than six months and at present is primarily concerned with establishing the meat packing business.
13Mr. Levine commenced operations at the Speedvale Avenue location towards the end of January 1988. We have purposely used the neutral term "commenced operations". Counsel for the respondents argued that Mr. Levine did not commence operations but rather than he transferred his pre-existing business from one facility in Toronto to a different facility in Guelph. On the other hand, counsel for the union argued that the business which Mr. Levine commenced to operate in Guelph in January 1988 was the business that he had acquired from RDM through the trustee in bankruptcy. Those divergent arguments necessitate us to review in some detail the business which was carried out in Guelph by RDM, the business of the respondents as it existed at The Beef Terminal in Toronto, and the operations carried out by the respondents since acquisition of the plant and equipment in January 1988.
14While operating from The Beef Terminal location in Toronto, Mr. Levine employed three full-time employees and one employee who worked only half days. In Toronto the company processed approximately 100 to 150 livestock per week. When he operated his business in Toronto, Mr. Levine arranged for his livestock to be custom killed at The Beef Terminal. Operating from Toronto Mr. Levine's customer base consisted of the small independent butchers who owned/operated their own shops. Mr. Levine developed his business through continuous, personal contact with customers and the development of one-to-one relationships typical of the independent entrepreneur.
15Now that the company is operating from the Guelph location, Mr. Levine arranges for the livestock to be custom killed by a company called M.G.I. Packers in Kitchener. There is no relationship, corporate or otherwise between M.G.I. and the predecessor employer RDM. Similarly, save for the contractual relationship which governs the slaughtering of livestock, there is no relationship between M.G.I. and the respondents. For running the Guelph operation, in addition to himself and his wife, Mr. Levine also employs a London, Ontario based salesman, a driver/manager, a plant manager, a plant engineer and some manual labour. There has been turnover in the manual labour as two labourers who had been employed by Mr. Levine in Toronto and who continued to work for the company in Guelph terminated their employment prior to the hearing. Similarly, one person who had been employed by the predecessor employer RDM was temporarily employed by Mr. Levine but quit after one week. At present, two former RDM employees are employed as manual labourers by the respondents.
16The London based salesman has been employed by the respondents for approximately three years. Similarly the driver/manager has been an employee for the past eight years. Both the plant manager and the plant engineer however joined the respondents' work force upon the commencement of operations in Guelph. Both individuals had previously been employees of RDM.
17The Guelph operation processes approximately 50 to 70 livestock per week. The respondents' customer base continues to be the small, independent butcher although the exact composition of that customer base has undergone some fluctuation. Mr. Levine testified that he lost some business when he ceased to operate in Toronto and acknowledged that he has picked up some new customers when he commenced operations in Guelph. On balance however, it would appear that, at least up to time of this hearing, the business of the respondents had suffered a down turn as a result of the move to Guelph. Mr. Levine however stated that it is still too early to tell, he expects business to improve and that growth will take time.
18The predecessor employer RDM was a much larger employer than the respondents. RDM employed approximately 50 to 60 employees and processed approximately 800 livestock per week. The typical RDM customers were the major chain supermarkets such as Oshawa Foods, including IGA, Loblaws and A & P. Mr. Levine estimated that over 95% of the volume processed by RDM was destined for these major customers. It was Mr. Levine's opinion that the meat packing "business" of RDM was substantially different than the meat packing "business" in which he engaged. As a result the skills and expertise of the employees employed by RDM was different than the skills and expertise of the respondents' employees. RDM concentrated on high volume sales, and as a result that company's approach to its customers, the transportation of its goods, and the type of cuts it specialized in were different from the methods used by the respondents in preparing, cutting and packaging its product. Mr. Levine estimated that because of the difference in the size and type of the business of RDM, he is only using approximately one half of the plant previously operated by RDM.
19The principals of RDM were Dee Ferraro, Angie Ferraro, John Ferraro and Milo Shantz. These persons also owned Consolidated Beef in Kitchener, Ontario. The factors which led to the eventual demise of RDM and Consolidated Beef included the revocation of the company's license to slaughter livestock as a result of allegations that the company had increased "kill" charges by falsifying actual weights of the cattle killed, the eventual restoration of that license after strict controls were established, the laying of criminal fraud charges against certain principals of the company as a result of ongoing investigations, and the bad publicity generated both by the criminal charges and allegations that the company had sold tainted meat. The exact reasons for, or details of, the demise of the company need not be explored in depth. It is relevant and important to note however that the news of the troubles and adverse publicity that plagued RDM were generally known in the meat packing industry before Mr. Levine first offered to purchase the plant in October 1987.
20By January 1988, any goodwill associated with either the name Royal Dressed Meats, the plant location in Guelph, or the name Ferraro had gradually dissipated. Mr. Levine testified that when he commenced operations in January 1988 the plant had been vacant for approximately six months RDM having vacated the premises in the first or second week in July. Not only was there an absence of goodwill in either the name Royal Dressed Meats, the plant location or the name Ferraro, it was Mr. Levine's testimony that there was "bad" 'will associated with those aspects of the predecessor business. As a result Mr. Levine poured both time and energy into the task of disassociating himself from RDM and its principals. To do this he carried out an active solicitation campaign of new customers in which he attempted to sell both himself and his company and its history. Mr. Levine also took such outwardly visible signs of disassociation as the removal of all distinctive lettering, signs or logos on either the building or the trucks which he had acquired. The respondents did not acquire RDM's customer list, logos or trademarks. The Agreement of Purchase and Sale does not provide for any transfer of accounts receivable, (which at the date of receivership equalled approximately 4.5 million), existing contracts, nor does it provide for a transfer of goodwill. The agreement does not contain a covenant not to compete nor does it contain any other provision designed to assist the respondent in carrying out the business of wholesale meat packing. On its face the Agreement of Purchase and Sale is limited strictly to a sale and purchase of assets. Neither the principals of RDM nor anyone associated or related to that company were involved in the financing of the acquisition of these assets by the respondents. The financing for the transaction came from Mr. Levine's own personal resources and through ordinary commercial sources such as a chartered bank.
21Notwithstanding these factors, there are some factors which, for lack of a better word, "link" together RDM and the respondents. These factors, to the outside observer might be seen to associate either the business or the principals of RDM with the business and principal owner of the respondents. Not only did Mr. Levine acquire the entire plant and equipment of RDM and thereby operate from the same premises using the same equipment, he also continued to employ two of RDM's managerial employees. Mr. Levine testified he continued the employment of the plant engineer who had also been retained by the trustee in bankruptcy upon the recommendation of the trustee in bankruptcy. More importantly however he also retained the services of Mr. John Ferraro.
22John Ferraro was the plant manger of RDM. He was also a Vice-President and Director of RDM and one of its shareholders. He is the son of one of the other principals of RDM. Mr. Levine testified that he did not know John Ferraro before he entered into the Agreement of Purchase and Sale in November 1987. The Agreement of Purchase and Sale was not contingent upon the respondents acquiring the services of John Ferraro nor was it contingent upon having John Ferraro participate in the operations of the respondents.
23The catalyst which brought together Mr. Ferraro and Mr. Levine was a somewhat unique, mutual business need. It is necessary to set out in some detail the nature of the relationship which came about between the two men. After Mr. Levine entered into the Agreement of Purchase and Sale he had some discussions with the trustee about his need to find competent, qualified personnel to assist in the running of the plant. Although Mr. Levine had been in the meat packing business for ten years, he had never had to concern himself with the physical operation of the plant. Having always leased the premises he did not have to concern himself with the running of a physical plant or its maintenance as that was left to the landlord. Upon the acquiring the Speedvale Avenue property however, Mr. Levine became his own landlord and thereby assumed responsibility for many matters about which he had not been previously concerned. In addition, as has already been noted, the Speedvale plant is large enough to accommodate a business seven or eight times the size of the respondents'. Mr. Levine discussed this matter with the trustee who in turn recommended that Mr. Levine speak with Mr. Ferraro. Although Mr. Ferraro, as one of the principals of RDM had also been subject to the investigations, had also faced criminal charges, the allegations of selling tainted meat and the bad publicity surrounding RDM, the trustee was of the opinion that John Ferraro was an innocent victim of circumstances who had been unfairly and improperly drawn into the matter.
24Mr. Levine and Mr. Ferraro had several meetings during December, 1987 and January, 1988. During the course of those meetings Mr. Ferraro outlined to Mr. Levine a business plan which he had developed. Central to that plan was a new process of preparing retail ready cuts of meat through the use of a specific vacuum packaging machine and the preparation of the meat. The meat is cut, packaged in retail ready portions at the plant and transported directly to the retailer for immediate sale to the ultimate consumer. In this way the intermediate step in which a butcher at the retail level cuts carcasses into smaller retail portions is eliminated. Mr. Ferraro is the only person in Canada to develop this concept and purchase the required vacuum packaging equipment although the concept has been marketed in the U.S.A.
25Mr. Levine was sufficiently impressed with Mr. Ferraro and the concept of retail ready meats that the two men quickly came to an agreement. Mr. Ferraro needed space in a federally inspected meat packing plant in order to develop and promote his concept. Mr. Levine had excess space which he was prepared to provide to Mr. Ferraro and eventually agreed to give Mr. Ferraro access to the premises, and the middle cooler in the plant together with an office on the first floor. In providing this space Mr. Levine's motives were not altogether altruistic. Mr. Ferraro assumed that if his concept took off, as he expected it would, he would soon be in a position to purchase approximately 50 head of cattle per week from Mr. Levine. Mr. Levine would thereby have an immediate captive customer. If Mr. Ferraro's business became very successful, Mr. Levine might expect to ride on its coat tails. He had an opportunity to get in on the ground floor of a new enterprise.
26Mr. Ferraro had the requisite expertise to assist in the running of the plant and to instruct Mr. Levine in the plant operations until Mr. Levine felt himself sufficiently capable of assuming these duties and responsibilities. Although initially Mr. Ferraro would spend a lot of time helping in the operation of the plant, as Mr. Ferraro's own business grew and became more successful he would devote less and less of his time helping Mr. Levine and the respondents' companies. By that time however Mr. Levine would be able to handle matters on his own. Mr. Levine wanted to make use of Mr. Ferraro's technical skills and expertise but testified that he did not expect Mr. Ferraro to help the respondents' business through customer contacts, or business connections or know how of the predecessor's business operations. On January 29, 1988 the two men entered into an agreement which specified inter alia Mr. Ferraro's right to access to the premises and which obligated CDM to employ Mr. Ferraro for one year at a weekly salary of $700.00. The agreement is silent in respect of Mr. Ferraro's obligation to buy any livestock from CDM notwithstanding the fact that Mr.Ferraro's potential as a captive customer was one of the benefits which Mr. Levine sought from the relationship.
27Mr. Levine testified that the agreement was entered into in order to assist Mr. Ferraro to obtain a bank loan to purchase the vacuum packaging machinery. He further testified that the agreement was not written in stone and that changes and amendments have been made informally as matters developed. In fact, matters have not developed. Mr. Ferraro's business is struggling and neither Mr. Ferraro nor Mr. Levine's expectations in respect of the number of livestock which Mr. Ferraro would purchase from CDM have been met. The success has not materialized and in early May, 1988 Mr. Levine advised Mr. Ferraro that he would not continue to make the salary payments specified in the agreement beyond May 30, 1988. Mr. Ferraro's last salary payment for CDM was on May 27, 1988. He still continues to occupy space at the Speedvale premises although a decision as to his continued use of that space will soon be made. Mr. Ferraro's continues to operate his company known as Retail Ready Beef. Mr. Levine has no interest in that company.
28Finally, reference must be made to a number of other facts disclosed in the evidence before we turn to examine the Board's jurisprudence and the submissions of counsel. Mr. Levine testified that it was important to him that the Guelph plant was a federally inspected plant. He had always operated from a federally inspected plant. His customers base had been built upon the fact that he operated from a federally inspected plant. In addition we note that if a federally inspected plant discontinues operations for more than a year it is automatically re-evaluated and is inspected and expected to conform to current standards. The legislation which regulates the inspection and licensing of meat packing plants does however contain a "grandfather" clause which apparently permits continued operations of federally inspected plants which do not necessarily meet current standards provided that such plants have not been vacant for twelve or more months. It was therefore imperative for Mr. Levine to purchase or lease a federally inspected plant that had not been vacant for more than a year in order to avoid the anticipated costs associated with bringing a plant up to current standards.
29The parties were able to agree that the marketing business of RDM was approximately 70 million dollars per year (this figure includes the marketing business of Consolidated Beef an associated company). Approximately four or five per cent of that 70 million per year business came from the same type of meat packing business as the meat packing business of CDM. We received in evidence both an accounts receivable list of RDM as of July 21, 1987, and a customer list of CDM as of June 4, 1988. A review of those lists, together with the oral testimony of Mr. Levine indicate that CDM has acquired very few customers of RDM. Mr. Levine himself estimated that in terms of dollar volume, only five per cent of his business was formerly serviced by RDM. Although the respondents lost some business when it moved away from the Toronto market, it was able to attract some new customers as a result of its Guelph location. The new customers it has acquired since the commencement of the Guelph operations in January, 1988 however have generally been the result of either Mr. Levine's own initiative and sale techniques, or as a result of the efforts of the respondents' London based salesman. There was no evidence that CDM acquired as new customers any RDM customers by reason of it having acquired the plant and assets of RDM.
30Within this factual framework we now turn to the submissions of the parties and an examination of the relevant Board's jurisprudence under the Successor Rights Provisions of the Labour Relations Act.
31It was the submissions of the respondents that there had not been a "sale" of "business~~ within the meaning of section 63 of the Act. Instead, what had transpired was an acquisition of assets by Mr. Levine who already operated a well established, very successful business. The acquisition of assets merely permitted Mr. Levine to extend his own business. This purchase of the assets of RDM did not equate to a purchase of the "business" of RDM. Counsel cited the seven month hiatus period, the lack of overlap of customers, the lack of common management or skills of the employees, the fact that there was no transfer of goodwill, customer lists or accounts receivable, and the difference in the nature of the business which had been carried on by RDM from the nature of the business carried on by CDM in terms of the type of customer, volume, managerial skills, and scale of operations, as indicative of the fact that there had not been a sale of the "business". In support of this submission, counsel referred the Board to Culverhouse Foods Limited, [1976] OLRB Rep. Nov. 691, Keele-Wilson Supermarket Limited, [1985] OLRB Rep. Mar. 425, Super-Tops Holdings Inc., [1986] OLRB Rep. Jan. 168 and USL Industries Inc., [1982] OLRB Rep. July 1080.
32The applicant on the other hand submitted that there had been a sale of a business within the meaning of section 63 of the Act in that the respondents had acquired all, or at the very least part, of the business of RDM. Counsel emphasized that CDM had acquired substantially all of the assets used by RDM to carry on its business and certainly enough assets to immediately start a meat packing business. In response to a question from the Board, counsel suggested that all of the assets acquired together comprised "part" of the business within the meaning of section 63(1)(a) of the Act. In the alternative, counsel emphasized that in section 63(1) a "business" includes a part of a business and argued that in this case CDM had acquired a portion of that four or five per cent of RDM's 70 million dollar business which was of the same type as CDM's. He stated that five per cent of 70 million was certainly a substantial business. Counsel pointed to the fact that both RDM and CDM were in the meat packing business. The skills of the employees were substantially similar. There had been a continuation of employment of some employees including two managerial employees namely John Ferraro as Plant Manager, and the Plant Engineer. In support of this submission he referred to the Culverhouse Foods Limited, case sup ra, Metropolitan Parking Inc., [1979] OLRB Rep. Dec. 1193, and Vaunclair Meats Limited, [1981] OLRB Rep. May 581.
33Counsel also underscored the importance to the respondents of the fact that the plant was federally inspected. He analogized the need for a federally inspected plant to the need for a licence to operate a business and argued that, as a federal licence was such an integral part of the meat packing business, transfer of the licence facility pointed to a sale of the business. In support he cited Thunder Bay Ambulance Services Inc., [1978] OLRB Rep. May 467, and Riverview Manor, [1983] OLRB Rep. Sept. 1564.
34Counsel asked us to draw an inference from the fact that CDM acquired a plant seven or eight times bigger than it needed, had not downsized the operations, and had not disposed of any of the assets acquired. The inference which counsel asked to Board to draw was that Mr. Levine was not a credible witness and that in fact, there existed a plan by which Mr. Levine expected and attempted to acquire the profitable RDM business. The success of that plan and the acquisition of that business would be helped by the presence of Mr. John Ferraro at CDM. John Ferraro ensured continuity and could provide the contacts. In this regard counsel asked the Board not to conclude that there had not been a sale of a business merely because the plan to acquire that business had failed. Although the respondents business both in terms of dollar volume and livestock processed had declined since the commencement of operations in Guelph, this did not take away from the fact that the initial plan and expectation was to acquire RDM's business. Failure of the business after the purchase does not affect the fact that the "business" was indeed acquired at the time of the sale.
35Before addressing generally the submissions and the evidence, we wish to deal specifically with the applicant's submission as outlined in paragraph 34. We agree that the subsequent failure of a business after it has been acquired need not negate a finding that there has been a sale of a business within the meaning of section 63. In our view however, it is equally true that mere hopes, intentions or aspirations to acquire a business will not necessarily result in a finding under section 63. The Board's determination under section 63 is a factual one. The intentions of the purchaser, whether they be grandiose dreams of success or sinister schemes to defeat bargaining rights may in appropriate cases be a factor to be considered by the Board hearing a section 63 application. Certainly, the latter is a factor relevant to the Board's determination under other provisions of the Act. Generally however, we are of the view that the intention of the parties at the time of the transaction can have little impact upon the factual determinations 'which the Board must make in section 63 applications. For example, the purchase of a single piece of equipment or machinery from a vendor who is bound to recognize a trade union, with the expectation by the purchaser that the purchase will result in a profitable million dollar business, absent any special circumstances will not usually result in a successor employer declaration by the Board. To put it bluntly, just because the purchaser hopes to acquire all or part of the vendor's business does not necessarily mean that the purchaser has in fact, been "sold" the "business" within the meaning of those terms as found in section 63. Similarly, a purchaser to whom all or part of the vendor's business has in fact been "sold" cannot hide behind his subsequent lack of success in maintaining the business and thereby disentitle the trade union from continuing to assert the bargaining rights which have attached to that business. Lack of success or failure to meet business expectations are not defences to finding that a "business" has in fact been "sold". What is required is an examination of the entire transaction and all surrounding circumstances, including the business context, in order to determine whether the two criteria outlined in section 63 have been met; namely, has there been a "sale" within the statutory definition of that term, and is the substance of that "sale" also a sale of "business".
36In the circumstances of this case we are not prepared to draw an adverse inference merely from the fact that Mr. Levine purchased a plant and property 7 or 8 times bigger than his current requirements. In our opinion, Mr. Levine provided an honest, credible and shrewd business reason for acquiring such a large plant and piece of property when he explained that one of the reasons he wanted these assets was because of the innate value of the property, especially that portion zoned MI which can be severed from the rest of the property. In light of this explanation we cannot attribute either grandiose dreams of success nor sinister schemes to defeat bargaining rights to Mr. Levine's motives in purchasing these assets as he did.
37On the facts of this case there can be no doubt that there has been "sale". In keeping with the remedial thrust of the successor employer provisions, both the term "sale" and "business" had been given broad and liberal meanings by the Board. (See for example, Thorco Manufacturing Limited, 65 CLLC 780 ¶16,052, Culverhouse Foods Limited, supra, Thunder Bay Ambulance Services Inc., supra, Metropolitan Parking Inc., supra). In the circumstances of this case the intervention in the process by the trustee does not prevent a finding that a "sale" has occurred. (See for example, Culverhouse Foods Inc., supra, Marvel Jewellery Limited, [1975] OLRB Rep. Sept. 733, Price Waterhouse, [1979] OLRB Rep. Jan. 50, Price Waterhouse, [1983] OLRB Rep. July 1184).
38As is usual in this type of case, although we have no difficulty in finding that the predecessor RDM has disposed of "something" to the respondents, it is more difficult to determine if the sale of that "something" constitutes a sale of a "business". Once again we note that in the past the Board has given a broad and liberal interpretation to the term "business". As the Board noted in the Metropolitan Parking Inc., case:
A business is a combination of physical assets and human initiative. In a sense it is more than the sum of its parts. It is a dynamic activity, a "going concern", something which is "carried on". A business is an organization about which one has a sense of life, movement and vigour. It is for this reason that one can meaningfully ascribe organic qualities to it. However intangible this dynamic quality, it is what distinguishes a "business" from an idle collection of assets.
In that particular case the Board focused on whether the purchaser had acquired a "functional economic vehicle."
39Similarly, a "part of the business" must be a functional vehicle. The sale of "part" of a business must be more than simply sale of a part used in the operation of the business and must be a transfer of part of the operation itself. A "coherent and severable part" or a "discrete, cohesive portion" of the predecessor's economic organization sufficient to enable the successor to perform a discrete, definable part of the functions formerly performed by the predecessor employer must be transferred. To hold otherwise would mean that each disposition of isolated elements of the business would result in a finding under section 63 of the Act.
Most of the cases under section 55 [now section 63] involve an alleged sale of a business in its totality. Only a few consider the meaning to be ascribed to the words "part of a business". Yet those words pose much more difficulty than the term business itself. Almost anything actually traceable to the predecessor could be regarded as "part" of its business. But it could not have been intended that every minor disposition of surplus assets should give rise to a successorship. To accept this view, would make section 55 the vehicle for extending rather than preserving bargaining rights.
(See Vaunclair Meats Limited, supra, at paragraph 25).
40After reviewing a number of decisions the Board went on the state:
In each of the cases to which we have referred, the Board found that the predecessor had transferred a coherent and severable part of its economic organization, managerial or employee skills, plant, equipment, "know how" or goodwill, - thereby allowing the successor to perform a definable part of the economic functions formally performed by the predecessor. This economic organization undertook activities which gave rise to employment, and the terms and conditions of employment, together with the union's right to bargain about them, were preserved. The part of the predecessor's business which it no longer wished to continue, provided the business opportunity which the successor was able to pursue to its own advantage. In all of the cases, there was a transfer of a distinct part of the predecessor's configuration of assets, and no material change in the character of the work performed by employees within that asset framework. There was a continuation of the work performed, the essential attributes of the employment relationship, the skills of employees, and the functional coherence of at least a part of the employee complement.
In our opinion the plant and equipment are merely isolated assets and (10 not constitute the "business" of wholesale meat packing. In the circumstances of this case we find that the acquisition of all of the plant equipment and the continuation of employment of both the plant manager and plant engineer do not constitute a "coherent and severable part" of the predecessor's economic organization so as to fall within the meaning of the term "part" of a "business" found in section 63.
41In arriving at our decision in this application we were drawn to the method or approach to section 63 applications enunciated by the Board in Grand Valley Ready-Mixed Concrete Supply Limited, [19811 OLRB Rep. June 663. There the Board said:
The answer is to be found in an examination of the two business organizations which existed prior to the transaction. In most section [63] applications, whether involving the alleged sale of a whole business or a part thereof, the nature of the alleged predecessor's business organization provides the ultimate answer. The Board identifies its essential elements and determines if sufficient of these have been transferred to the successor as to allow the business and the employment which it generates to continue. ... However, if ... assets have been disposed of which are peripheral or unrelated to the business organization to which the bargaining rights at issue attach, the Board will not find that there has been a sale of a business within the meaning of the section.
42The Ontario Labour Relations Board reports contain a multitude of cases involving section 63 applications. It is however impossible to extract from these cases a single factor or element which is always determinative. The difficulties surrounding the factual determinations which the Board must make are compounded by the fact that the elements or factors which are significant in each case can vary with the business context. As a result, there are very few "text book" cases. As was noted by the Board in The Tatham Company Limited, [1980] OLRB Rep. Mar. 366:
The issue of employer successorship arises out of a seemingly endless variety of factual settings, with each new case presenting some of the factors considered relevant to the resolution of prior cases while arising out of materially altered, entirely omitted, or newly-added facts which arguably should affect the decision on the merits. Much of the confusion which attends successorship results from the facility with which each case can be distinguished on its facts from all former cases; but to dismiss the confusion so lightly would be to disregard the fundamental differences inherent in the various business contexts in which the successorship issue arises. Factors which may be sufficient to support a 'sale of business' finding in one sector of the economy may be insufficient in another. In some industries, a particular configuration of assets - physical plant machinery and equipment - may be of paramount importance; while in others it may be patents, 'know-how', technological expertise or managerial skills which will be significant. Some businesses will rely heavily on the goodwill associated with a particular location, company name, product name or logo; while for other businesses, these factors will be insignificant. The Labour Relations Act applies equally to primary resource industries, manufacturing, the retail and service sector, the construction industry and certain public services provided by municipalities and local authorities. In each of these sectors the nature of the business organization is different, yet in each case section [63] must be applied in a manner which is sensitive to both the business context and the purpose which the section is intended to accomplish.
43Notwithstanding this statement, the Culverhouse decision referred to by both parties does set out a non-exhaustive list of factors normally considered by the Board:
[The] cases offer a countless variety of factors which might assist the Board in its analysis: among other possibilities the presence or absence of the sale or actual transfer of goodwill, a logo or trademark, customer lists, accounts receivable, existing contracts, inventory, covenants not to compete, covenants to maintain a good name until closing or any other obligations to assist the successor in being able to effectively carry on the business may fruitfully be considered by the Board in deciding whether there is a continuation of the business. Additionally, the Board has found it helpful to look at whether or not a number of the same employees have continued to work for the successor and whether or not they are performing the same skills. The existence or non-existence of a hiatus in production as well as the service or lack of service of the customers of the predecessor have also been given weight. No list of significant considerations, however, could ever be complete; the number of variables with potential relevance is endless. It is of utmost importance to emphasize, however, that none of these possible considerations enjoys an independent life of its own; none will necessarily decide the matter. Each carries significance only to the extent that it aids the Board in deciding whether the nature of the business after the transfer is the same it is was [sic] before, i.e., whether there has been a continuation of the business.
44These various factors can be grouped into two main categories namely, (1) the transfer of key assets including the transfer of goodwill and (2) the nature of the work performed. In addition many of the cases focus on the pre-existing relationship between the parties. In this case there was no evidence before us about a pre-existing relationship between CDM and/or its principles and RDM and/or its principles.
45Most successorship applications involve the transfer of at least some assets. In and of itself such a transfer is insufficient to warrant a finding of successorship unless the particular assets involved are so integral to the business that their very transfer is a sale of that business. In some types of business the essence of the business consists of equipment so that the transfer of the equipment is an important and significant factor in the section 63 determination. In other instances such as regulated industries a licence is necessary in order to operate the business. In those instances possession of the licence is in effect possession of the essence of the business. The transfer of the licence then becomes a significant factor in the application pursuant to section 63. One of the applicant's submissions in this case focused on the fact that the respondents needed, and in fact obtained, a federally inspected meat packing plant. The applicant argued that in this way the facts of this case could be analogized to the "transfer of a licence" cases. (See for example Thunder Bay Ambulance Services and Riverview Manor, supra.) In our opinion however this case is distinguishable from those cases. Mr. Levine does not require a licence to operate a meat packing business. There is a distinct difference between acquiring the required licence to operate, and acquiring the benefit of owning a federally inspected plant. The respondents did not require a licence to operate but had always operated from a federally inspected plant. In the past Mr. Levine had merely leased federally inspected premises from other landlords. Upon acquiring the Speedvale Avenue location Mr. Levine became his own landlord. Moreover, although it is desirable for Mr. Levine to operate from a federally inspected plant as it provides him with more options, it is by no means necessary for him to operate from a federally inspected plant given his customer base. In our opinion therefore, the fact that the plant acquired was federally inspected is not determinative of the matter.
46Although the transfer of equipment and other assets is certainly a factor to be considered, this Board has consistently distinguished a "business" from its "assets". A rather unique set of circumstances in which the Board's approach to the distinction between the business and its assets can be found in Calmil Enterprises, [1980] OLRB Rep. Apr. 401. Without regurgitating all of the facts of the case we note that the Board found that, through a series of transactions the alleged successor obtained "virtually the entire configuration of assets formerly used by the predecessor in its business organization. Moreover, there is no real change in the character of the business. Normally this would create a strong inference of a sale of a business". Although the union there argued that a sale of a business must always be found in such circumstances, the Board specifically rejected this argument stating:
This argument, in essence, roots bargaining rights in "the assets" rather than "the business"; and we are unable to accept it as a general proposition. A transfer of a significant portion of the predecessor's assets may well be a "sale of a business": but it will not always be so.
In the unique circumstances before us we are also of the opinion that the transfer of assets in this case, despite the fact that those assets comprise "virtually the entire configuration of assets" used by RDM, does not in and of itself constitute a sale of a business under section 63.
47In our opinion an integral part of the meat packing business, a key asset of that business is the "goodwill" found in the business. There are many cases in which the Board has found the transfer of the goodwill of a business to be indicative of the sale of the business. Goodwill may be transferred either directly or indirectly. For example, and in particular, in the retail grocery trade the goodwill of the business can be found in the location of the business so that acquisition of that location necessarily means acquisition of the goodwill (see for example Dutch Boy Foods, (1965) 65 CLLC 77 ¶16,05 1, More Groceteria Limited, [1980] OLRB Rep. Apr. 486). In the grocery business cases, for purposes of a determination pursuant to section 63 of the Act, "goodwill" has normally been broadly defined as "the attractive force which brings in customers." From the evidence before us it would appear that a similarly broad definition of goodwill can be applied to the meat packing business. Goodwill need not be explicitly assigned in the offer to purchase in order for this Board to find that goodwill has been transferred. Indeed, in the Dutch Boy Foods case the Board found a transfer of goodwill notwithstanding the fact that "goodwill" was expressly excluded from the purchase price. In our opinion in this case the fact that the Agreement of Purchase and Sale is silent on the matter of goodwill is therefore not determinative of the issue.
48In the grocery trade, location can, and usually does, carry with it the goodwill of the business. Other indicia of a transfer of goodwill which affect the determination as to whether a sale of a business has occurred include the assignment of trade names or company logos to the successor, or the use of the same company colours, or telephone numbers by the successor; the sale of customer lists or the solicitation of the predecessor's customers; covenants not to compete given by the predecessor; the acquisition of existing contracts, orders or accounts receivable etc. None of those indicia are present in this case.
49In some circumstances the goodwill may be personal to specific individuals concerned with the predecessor's business. Their association with the successor therefore will carry the goodwill of the predecessor to the successor. (See for example Antionacci Clothes, [1984] OLRB Rep. July 887, Stucor Construction Limited, [1987] OLRB Rep. Apr. 614.) In the circumstances before us we find that there was no transfer of goodwill from RDM to CDM. The two factors which militate against the finding that there has been a transfer of goodwill is the existence of a six-month hiatus period during which RDM's customers presumably found other meat suppliers, together with the circumstances surrounding the demise of RDM. We accept M:r. Levine's evidence that by the time he commenced operations there was "bad will" associated with the plant location, the name Royal Dressed Meats and the name Ferraro as a result of the criminal charges of fraud brought against the principals of RDM, and the allegations and investigations into RDM's sale of tainted meat. We are also of the view that Mr. John Ferraro's limited association with Mr. Levine after Mr. Levine acquired the premises as outlined in paragraphs 22 to 27 herein, is of little significance. There is no evidence that the fact of Mr. Levine's somewhat unique business relationship with John Ferraro assisted the respondents in any significant way to carry on the operations. The relationship which developed between the two men after the offer of Purchase and Sale had been entered into was completely separate from the transaction whereby CI)M acquired RDM's assets. The deal itself was not contingent upon the development of such a relationship and Mr. Ferraro had no involvement with, or impact upon the acquisition of the assets by Mr. Levine from the trustee.
50The second main category of cases involving section 63 applications focus upon the nature of the work performed by employees of the predecessor and alleged successor. From a labour relations perspective, the importance of a "business" is the jobs that it provides for the employees. If there is a continuity in the work performed, regardless of whether there is an actual continuity of employees, there is a strong inference that there has been a transfer of business (see the Tatham Company Limited, supra). This line of cases was emphasized by counsel for the union. We were referred to the Metropolitan Parking case where the Board stated:
Of particular significance for a labour relations statute is the continuity of the work performed before and after the transfer, since a trade union is certified to represent certain work groups, the collective agreement regulates the conditions of work for employees in those groups, and the purpose of section 55 is to preserve both the bargaining relationship and the collective agreement. If the work performed subsequent to the transaction is substantially similar to the work performed prior to the transaction, there is normally a strong inference that there has been a transfer of the business within the meaning of section 55.... Unless there is a continuity of work and jobs, it would make little sense to preserve the collective agreement. Accordingly, the continuity of the work done is an important indicium of a transfer of a business.
We note however that in that case, at a subsequent paragraph, the Board stressed that a transfer of work in itself does not equal a sale of a business. At paragraph 36 of the decision the Board states:
Despite the labour relations focus of the statute "the business" is not synonymous with its employees or their work. In exceptional circumstances the accumulated skills, ability, know how or business contacts of the employee may be so crucial, or irreplaceable, that their loss would mean the demise of all or part of the business as a going concern; but these cases are rare. For the most pan, the continued employment of the predecessor's employees is only one factor to be considered. The reason for this is succinctly stated by the Canada Labour Relations Board in NA. B. E. T. v. Radio CJYC Ltd. et al., (1978) 1 Can. LRBR 565:
The purpose of the successorship provisions is to preserve bargaining rights in spite of changes in the ownership or control of an enterprise. Bargaining rights are typically granted to a trade union as bargaining agent for a unit of employees of an employer employed in certain classifications or at a certain location, or for all employees with specified exceptions. Bargaining rights do not attach to certain specific employees as individuals. Therefore, in defining the concept of business for the purpose of successorship, it would be incorrect to focus upon whether certain identifiable persons formerly in the employ of A are now in the employ of B. Furthermore, to focus on that question would invite employers to void the successorship provisions by refusing to maintain continuity of the individuals employed. A key to the protecting of bargaining rights must be whether there is continuity in the nature of the work done (i.e. in classifications or job content for which the union was certified) not in the actual persons who perform it...
But continuity of the work done is not sufficient alone to satisfy section 144. There must be some nexus between two employers other than the fact that one employed persons to do certain work that the other now does or will do, before one can be declared the successor of the other. Otherwise a loss of work to a competitor employer would result in a successorship. There must be some continuity in the employing enterprise for which a union holds bargaining rights as well as continuity in the nature of the work. The two go hand in hand. [Emphasis added]
A continuity of the work and/or the employees is significant, but it is not always sufficient, to sustain a finding of successorship. This Board adopted a similar view in British American Bank Note Co. Ltd., [1979] OLRB Rep. Feb. 72 - a case which, like the present one, involved the consequences of a loss of a contract:
There are limits, however, to the extent to which section 55 can be used to preserve collective bargaining rights. It is clear that the provisions of this section do not attach bargaining rights to the work being performed by a business but only to the business itself. While this distinction may not be easy to draw in some cases, it is essential that it be maintained since section 55 cannot be interpreted as guaranteeing to a bargaining agent an absolute right of property in the work performed by its members. Section 55 serves only to preserve bargaining rights that have become attached to a business entity sot that when that business entity is transferred, either in whole or in part, those bargaining rights survive and bind the successor employer.
The focus of section 55 is the business entity - the employer's total economic organization - not simply the work which the employees perform.
51We therefore return to focus upon the employer's "total economic organization". In this case, our focus upon the total economic organization is further complicated by the fact that Mr. Levine already had an established business. We recognize that an expansion or alteration of one's own business need not necessarily result in a successor employer declaration. The difficulty lies in drawing the line where the purchaser purchases the assets of another employer bound by a collective agreement in order to further his own expansion. Once again, the Board has attempted to draw this line by examining the alleged successor's "total economic organization" and comparing that entity and the nature of its work to the original work of both the vendor/predecessor and the purchaser/alleged successor.
52After reviewing a number of cases in the area, the Board in Grand Valley stated:
These cases illustrate the attention which must be paid to the nature and scope of the alleged successor's business where the successor carries on a parallel or like business prior to the section [63] transaction. The bargaining rights which are to be preserved under section [63] attached to the predecessor's business and it is the predecessor's business, or a part thereof, which must be transferred. If the transaction is one carried out in connection with the operation of a parallel business and if the business entity which results can more properly be described as having its roots in the alleged successor's business than in the alleged predecessor's business, it is unlikely that a sale of a business within the meaning of section [63] has taken place.
53More recently, in cases involving the retail grocery trade the Board has enunciated a similar principle. (See for example Super Tops Holdings Inc.., [1986] OLRB Rep. Jan. 168, and Keele-Wilson Supermarket Limited, [1985] OLRB Rep. Mar. 425). The thrust of these decisions is that where an employer, who already has a successful business, acquires another facility for the purpose of extending his own enterprise, he is not acquiring someone else's business but is merely acquiring a facility to run his own already established business.
54In Keele-Wilson the matter was put at follows:
We do not doubt the importance of location in the retail food industry - particularly since the habit of shopping locally can be an important element of good will and can be the key to business success even if good will is not expressly recognized in the transaction by which the location is acquired. There is no doubt that in this case, there are indications which, when considered in the context of the retail food industry, do tend to point towards a sale of a business within the meaning of section 63. The company continues to carry on a food business from the same location as Safeway which has effectively withdrawn from that local market. The hiatus period between the closing of Safeway and the opening of Super Tops is relatively small (six weeks). The premises and general store layout are similar.
But there are also a number of factors which point in the other direction. Mr. Chetti had no intention of acquiring Safeway's business. Indeed, quite the contrary. He already operated two ethnically-oriented supermarkets in Metropolitan Toronto and was anxious to open a third. Safeway's business, as such, was unprofitable and not worth buying.
Mr. Chetti learned of the possibility of acquiring the Safeway premises from an independent real estate agent. The company did not acquire any managerial or other expertise from Safeway.
The entrepreneurial initiative, managerial talent, and employee skills were all derived from Mr. Chetti's pre-existing operations or were assembled following the sale. A substantial sum was expended so that the new store would conform to Mr. Chetti's business concept rather than that of Safeway. Mr. Chetti knew that his success depended upon expanding, serving and developing his own market which was not being served by Safeway or the other local chain stores. He was able to do this with dramatic success because he was able to bring to bear his own business organization to attract customers whom Safeway never reached. That is why he was able to instantly triple the sales volume. He was not acquiring the reviving an ailing "part" of Safeway's business. He was expanding his own business from premises formerly occupied by Safeway.
- We accept the union's submission that in the retail food business location is important, and the acquisition of physical premises will in many cases be sufficient to trigger a finding of "successorship", moreover, when a "severed part" of a business has been transferred it would be an unusual purchaser who did not undertake any new initiatives, or try to put his own imprint upon his recent acquisition. On balance, however, we do not find a sale of a business in the facts of this case. In our view, the presence of Super Tops at Safeway's former location represents the expansion of an already well-established business in which some assets of Safeway came to be used. Those assets did not alone constitute a business or part of a business, and it cannot be said in this case that the company has expanded by purchasing a competitor's business and refurbishing it. It has merely purchased some ideal and uneconomic assets which it has used to expand its own successful going concern. Section 63 has no application
55In the circumstances of this case we also find that section 63 has no application. When we examine the business of Mr. Levine both while he operated from the Toronto location and after he commenced operations in Guelph, and compare that to the business carried on by RDM we find that the "roots" of Mr. Levine's Guelph operations lie in the business he operated in Toronto rather than in RDM's business.
56Upon the commencement of operations in Guelph, Mr. Levine acquired few new customers. The vast majority of his customers were the same customers which he had previously serviced from the Toronto location. In addition, the new customers which were acquired were acquired from the London and Windsor area through the efforts of Mr. Levine and his London based salesman. New customers were not acquired as a result of Mr. Levine having acquired the RDM facility, nor were they acquired because Mr. Levine could somehow trade upon either the RDM name or an illusory association with any of the principals of RDM. The new customers were gained because of Mr. Levine's own entrepreneurial skills and sales techniques. The essence of Mr. Levine's business and its most important asset while operating from Toronto was Mr. Levine himself. It was his skills and talents, especially his personal relationship with customers, which have made the business a profitable operation. That essence of the business, that key element, was transferred to the Guelph facility where Mr. Levine continues to be the prime indeed sole driving force behind the operations.
57On the basis of the evidence we find that the operations of the respondents need not be carried out from a particular plant or from a particular geographic area. Although it is true that the person engaged in the wholesale meat packing business needs a certain type of facility and a specific type of equipment, neither the plant itself nor the equipment form the "key" elements of the "business" of wholesale meat packing. Rather, the key element is the entrepreneurial skills, managerial ability and specialized sales techniques which permit and foster the development of one-to-one personal relationships between customer and supplier. This key element forms the "dynamic intangible" which separates the assets of plant and equipment from the "business" of wholesale meat packing. The only real difference between the Toronto and Guelph operations is that in Toronto, for the most part, Mr. Levine leased the required facility and equipment - in Guelph he owns it. In neither location however could it be said that the facility and equipment comprise the "business" of the respondents. Rather the "business" of the respondents exists because of Mr. Levine and the customer base which he has established. The attractive force which brings customers to CDM is not the plant or its location but Mr. Levine himself.
58When we look at these two elements, namely the number arid type of customer and the skills and ability of Mr. Levine, we find not only that these two facto]rs have remained relatively constant upon the transfer of operations from Toronto to Guelph, but we also find that these elements are either missing from, or are distinctly different from the operations that had been carried out by RDM in Guelph. First, Mr. Levine had no association or relationship with the predecessor employer or its principals. Secondly, there is only minimal, indeed minute, overlap in the customers of CDM who had previously been customers of RDM. This is because the basic meat packing business of the two entities were vastly different. While CDM developed its customer base from the small retailer and small independent butcher, RDM's customer base consisted primarily of the large major chain retail grocers. CDM's business was built upon what may be colloquially described as the "personal touch" - one to one relationships, specialized cuts etc. RDM on the other hand was one of the country's largest wholesalers of dressed meats. The essence of its business was large scale and high volume to the major chains. As a result, after nearly five months of business only five per cent of CDM's current "business" had previously been members of RDM. That figure is not surprising given the fact that the parties agreed that only approximately four or five per cent of RDM's 70 million dollar business came from the same type of customer as the business serviced by CDM. When RDM vacated the market in July of 1987, someone had to fill the void. CDM managed through its own independent solicitation of customers to fill a minute portion of that void. To say however that this acquisition of a few new customers constitutes a sale of all or part of a business within the meaning of section 63 would stretch both the purpose and plain meaning of that section.
59For all of these reasons we find that there has not been a "sale" of a "business" or "part" of a "business" within the meaning of section 63. The application is dismissed. Having regard to the submissions of the parties referred to in paragraph 1, we also dismiss the section 89 complaint.