Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The Respondent T.C.T. Logistics Inc. and its associated companies (collectively TCT) had operations across Canada and the United States. One of their warehousing facilities was located in Toronto, the rest in Alberta. The Appellant Union was the exclusive bargaining agent for 70 employees at the Toronto warehouse. In January 2002, TCT became insolvent. GMAC Commercial Finance Corporation - Canada (GMAC), the largest secured creditor of TCT, moved for an order appointing the Respondent KPMG Inc. as Interim Receiver. The bankruptcy judge issued the Order on January 24, 2002, granting the Interim Receiver wide powers, subject to court supervision. Paragraph 8 provided that no actions or proceedings shall be commenced against KPMG Inc. or the Receiver in any Court or tribunal unless the leave of the Court is first obtained. Paragraph 15 provided that the Receiver was not and shall not be deemed or considered to be a successor employer.

On February 22, 2002, KPMG brought a motion for an order authorizing it to file an assignment in bankruptcy on behalf of TCT. On April 12, 2002, KPMG entered into an Asset Purchase Agreement with Spectrum Supply Chain Solutions Inc. (Spectrum) to sell the assets of TCT's warehousing business. Spectrum purchased TCT's leasehold interests in three of the Alberta locations but not in the Toronto premises. The Asset Purchase Agreement provided that KPMG would terminate all employees prior to the closing of the transaction, and that Spectrum would only re-hire certain specified employees. On May 9, 2002, KPMG terminated all unionized employees. Some of those employees were later hired by Spectrum, without regard to the Union seniority list.

On May 13, 2002, without first seeking leave from the Bankruptcy Court, the Union filed applications with the Ontario Labour Relations Board (OLRB) that included a declaration that Spectrum is the successor employer to TCT and/or KPMG and is bound by the collective agreement between the Union and TCT and damages against TCT and/or KPMG and Spectrum for entering into a sale agreement that discriminates against unionized employees and eliminates the Union.

KPMG brought a motion before the OLRB to stay the proceedings and the OLRB granted the stay. The Union then moved in the Bankruptcy Court for an order deleting certain provisions of the January 24, 2002 Order and for leave to proceed before the OLRB. The bankruptcy judge amended the paragraphs of the original order to protect KPMG as long as it was acting "qua realizer" of the assets. He then denied the Union leave to commence successor employer proceedings before the OLRB against KPMG. The majority of the Court of Appeal allowed the appeal, set aside the decision of the bankruptcy judge and remitted the matter back to the Bankruptcy Court.