Collateral Matters - Receivers, Unions And The Lifting Of The Stay: Are The Floodgates Open Or Have They Merely Sprung A Leak

In what may prove either to be a landmark decision or a mere outlier confined to its unique facts, the Court of Appeal for Ontario (the "Court of Appeal") in Romspen Investment Corporation v. Courtice Auto Wreckers Limited, et al.1 has overturned an earlier decision and lifted the stay of proceedings against a court-appointed receiver to allow a union to proceed with a certification application and an unfair labour practice complaint against the receiver. While the long-term significance of Romspen remains to be determined, there are some silver linings in a case that otherwise leaves a bitter taste in the mouths of receivers and the secured lenders that apply to have them appointed.

Facts

Pursuant to an Order of the Honourable Justice Penny of the Ontario Superior Court of Justice (Commercial List) (the "Commercial List Court") made October 19, 2015 (the "Receivership Order"), Rosen Goldberg Inc. was appointed as the receiver (the "Receiver") of several debtor corporations (the "Debtors"), one of which was Courtice Auto Wreckers Limited (the "Employer"). As is standard practice, the Receivership Order provided that no proceeding can be commenced or continued in any court or tribunal against the Receiver or any of the Debtors except with the consent of the Receiver or leave of the Commercial List Court.

After the making of the Receivership Order, and with a view to representing a bargaining unit of six of the Employer's employees, Local 793 of the International Union of Operating Engineers (the "Union") applied to the Ontario

Labour Relations Board (the "OLRB") for certification (the "Certification Application"). Two days after the Union filed the Certification Application, the Receiver dismissed four of the six employees in the proposed bargaining unit. According to the Union, the Receiver then hired new workers to perform duties substantially similar to those performed by the dismissed employees. For its part, the Receiver denied having hired replacement workers and offered business reasons for the dismissals. Meanwhile, on the same day that the Receiver was alleged to have hired replacement workers, the OLRB stayed the Union's Certification Application on the basis that it was caught by the stay of proceedings imposed by the Receivership Order.

In response to what it perceived as anti-union animus by the Receiver, the Union filed an unfair labour practice complaint with the OLRB (the "ULP Complaint"); however, in light of the stay of proceedings imposed by the Receivership Order, the Union now sought leave of the Commercial List Court to proceed with both its initial Certification Application and the new ULP Complaint.

Reasons of the Commercial List Court

The Honourable Justice Wilton-Siegel of the Commercial List Court dismissed the Union's motion in its entirety (the "Commercial List Decision").

His Honour held that the effect...