|
Corporations - Canada Business Corporations Act (CBCA). Canada (Attorney General) v. Monette
In Canada (Attorney General) v. Monette (Fed CA, 2024) the Federal Court of Appeal allowed a Crown JR, here from a CIRB decision involving the unpaid wage provisions of the Canada Labour Code.
Here the court considers the CBCA director's liability for unpaid wages provisions:[24] In this regard, it is important to reproduce the following excerpts from section 119 of the CBCA:119 (1) Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts not exceeding six months wages payable to each such employee for services performed for the corporation while they are such directors respectively.
119 (1) Les administrateurs sont solidairement responsables, envers les employés de la société, des dettes liées aux services que ceux-ci exécutent pour le compte de cette dernière pendant qu’ils exercent leur mandat, et ce jusqu’à concurrence de six mois de salaire.
(2) A director is not liable under subsection (1) unless
(2) La responsabilité des administrateurs n’est engagée en vertu du paragraphe (1) que dans l’un ou l’autre des cas suivants :
(c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the debt has been proved within six months after the date of the assignment or bankruptcy order.
(c) l’existence de la créance est établie dans les six mois d’une cession de biens ou d’une ordonnance de faillite frappant la société conformément à la Loi sur la faillite et l’insolvabilité.
(3) A director, unless sued for a debt referred to in subsection (1) while a director or within two years after ceasing to be a director, is not liable under this section.
(3) La responsabilité des administrateurs n’est engagée en vertu du présent article que si l’action est intentée durant leur mandat ou dans les deux ans suivant la cessation de celui-ci. [25] As you can see, paragraph 119(2)(c) of the CBCA requires that directors’ liability be incurred only if the existence of the wage claim is established within six months of an assignment or a bankruptcy order made against the corporation under the Bankruptcy and Insolvency Act. With respect to section 154 of the BCA [SS: this is the Quebec BCA], directors’ liability is incurred only if the corporation, within one year after the debt becomes due, is subject to a winding-up order or becomes bankrupt and a claim for that debt is filed with the liquidator or the trustee. It is unclear from section 154 of the BCA as to whether the one-year time limit also applies to the filing of a proof of claim with the liquidator or the trustee. In addition, under subsection 119(3) of the CBCA, directors’ liability is incurred only if the action is brought during a directors’ term or within two years after ceasing to be a director. The BCA does not provide for a specific time limit for the exercise of the recourse against the directors.
|
