T-3076-91
Canadian Human Rights Commission (Applicant)
v.
Tina (Hubbert) Radford (Judgment Creditor)
and
Worldways Canada Ltd. (Judgment Debtor)
and
Joiner Sales Corporation and Ernst and Young
and Man, Lawson, Fisher Inc. (Garnishees)
INDEXED AS: CANADA (HUMAN RIGHTS COMMISSION) V.
RADFORD (T.D.)
Trial Division, Giles A.S.P.—Toronto, January 13
and 15, 1992.
Creditors and debtors — Canadian Human Rights Commis
sion finding against judgment debtor, which declared bank
ruptcy before award filed in Federal Court — Commission
bringing R. 2300 application for order attaching debts owing
to judgment debtor — (1) Commission lacking standing — (2)
Must show debt before can be attached — No evidence of debt
owing by garnishee — (3) Commission arguing Canadian
Human Rights Act semi-constitutional and should take prece
dence over other statutes or contracts creating priority rights
in secured creditors — Specific provisions necessary to deprive
person of property rights without hearing — No specific provi
sion in Act purporting to affect rights of secured creditors —
(4) Bankruptcy Act vesting surplus of proceeds of auction of
assets after payment of secured creditors in trustee for benefit
of unsecured creditors — (5) No right to bring R. 2300 appli
cation without leave.
Human rights — CHRC finding against airline (judgment
debtor) which had refused to hire judgment creditor for inabil
ity to meet visual standards without glasses or contact lenses
— Airline declaring bankruptcy before Commission filing
award in Federal Court — Commission lacking standing to
apply under R. 2300 to attach debts — No provision in Cana-
dian Human Rights Act judgment resulting from CHRC award
having priority over bankrupt's creditors or limiting creditors'
rights.
Practice — Parties — Standing — Airline (judgment debtor)
refusing to hire judgment creditor as unable to meet visual
standards without glasses or contact lenses — Canadian
Human Rights Commission finding against judgment debtor,
which declared bankruptcy before award filed in Federal
Court — Commission applying under R. 2300 for order attach
ing debts owing to judgment debtor — As R. 2300 requiring
application by judgment creditor, Commission lacking stand
ing.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Bankruptcy Act, R.S.C., 1985, c. B-3.
Canadian Human Rights Act, R.S.C., 1985, c. H-6.
Federal Court Rules, C.R.C., c. 663, R. 2300.
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Tudor Holdings Ltd. v. Robertson et al. (1974), 43 D.L.R.
(3d) 752; [1974] 2 W.W.R. 546 (B.C.S.C.).
COUNSEL:
René Duval for applicant.
No one appearing for judgment debtor.
K. M. van Rensburg, M. Forte and S. Rosnhert
for garnishee Ernst and Young.
APPEARANCE:
Tina (Hubbert) Radford on her own behalf.
No one appearing for garnishees Joiner Sales
Corporation, and Alan, Lawson, Fisher Inc.
SOLICITORS:
Canadian Human Rights Commission Legal
Department for applicant.
Ogilvy Renault, Ottawa, for judgment debtor.
GARNISHEES ON THEIR OWN BEHALF:
Ernst and Young Inc., Toronto.
Joiner Sales Corporation, Etobicoke, Ontario.
Alan, Lawson, Fisher Inc., Oshawa, Ontario.
JUDGMENT CREDITOR ON HER OWN BEHALF:
Tina (Hubbert) Radford, Mississauga, Ontario.
The following are the reasons for order rendered in
English by
GILES, A.S.P.: The motion before had been set
down as an ex parte order to attach assets and order
certain garnishees to show cause under Rule 2300
[Federal Court Rules, C.R.C., c. 663]. When it came
on originally before Mr. Justice Denault, he ordered
the motion heard in Toronto on notice to all inter
ested persons. In Toronto it came on before me and I
agreed to give short reasons for my decision. These
are my reasons.
The application before me was made by Canadian
Human Rights Commission (the Commission) styled
in the style of cause as "applicant". The others men
tioned in the style of cause included Tina (Hubbert)
Radford, styled judgment creditor, Worldways
Canada Ltd., styled judgment debtor, Joiner Sales
Corporation and Ernst and Young and Alan, Lawson,
Fisher Inc., styled garnishees.
The judgment creditor having been served as
required by Denault J., was present in person.
Because of the decision in Tudor Holdings Ltd. v.
Robertson et al. (1974), 43 D.L.R. (3d) 752
(B.C.S.C.), I should point out that the judgment cred
itor took no part whatsoever in the hearings before
me. The judgment debtor was not represented
although presumably served. Joiner Sales Corpora
tion ("Joiner") and Alan, Lawson, Fisher Inc. were
not represented. Ernst and Young agreed by those
present to mean Ernst & Young Inc. (Ernst) had been
served. So far as its relationships with the parties to
the motion were concerned, Ernst was said to be act
ing at all times for three secured creditors who were
represented on their own behalf by counsel before
me.
The following background is necessary to under
stand the motion. The judgment creditor applied to
the judgment debtor for a job with its airline and was
refused because she was unable to meet the visual
standards without glasses or contact lenses. The judg
ment creditor complained to the Commission which
commenced proceedings against the judgment
debtor. In the summer the Commission made a find
ing against the judgment debtor but did not at that
time quantify the damages. In the fall the judgment
debtor became a bankrupt. Alan, Lawson, Fisher
became the trustee in bankruptcy of the judgment
debtor. Sometime before December 16, 1991, Ernst,
purporting to act as agent for the secured creditors,
purportedly authorized Joiner Sales Corporation to
sell by auction the assets of the judgment debtor for
the account of the secured creditors. The sale was
advertised for December 17. On December 16, 1991,
the Commission gave its award as to the damages
suffered by the judgment creditor. The Commission,
forthwith, filed its award with the Registry of the
Federal Court of Canada. By such filing the decision
of the Commission became a judgment of this Court.
The Commission forthwith brought this motion under
Rule 2300. Rule 2300 reads in part as follows:
Rule 2300. (1) The Court, upon the ex parte application of a
judgment creditor, on affidavit showing that the judgment is
unsatisfied and
(a) that there is a debt owing or accruing from some person
in Canada to the judgment debtor, or
(b) that there is a debt owing or accruing from some person
not in Canada to the judgment debtor and that such debt is
one for which such person might be sued in Canada by the
judgment debtor,
may order that all debts owing or accruing from such third per
son (hereinafter called "the garnishee") to the judgment debtor
shall be attached to answer the judgment debt and that the gar
nishee do at a time and place named show cause why he should
not pay to the judgment creditor the debt due from him to the
judgment debtor or so much thereof as may be sufficient to
satisfy the judgment ....
It is apparent that the Rule contemplates the judg
ment creditor should be the applicant, which was not
the case. I pointed this out to counsel for the Com
mission who indicated that only the Commission was
entitled to file the award with this Court and the
Commission should be entitled to set in motion any
application for any consequential relief. I reserved
my decision as to the standing of the Commission
and heard the representations of counsel for the Com-
mission which were to the effect that the jurispru
dence indicated that the Canadian Human Rights Act
[R.S.C., 1985, c. H-6] was semi-constitutional in
nature and therefore took precedence over any other
statute. Therefore, by implication, neither the Bank
ruptcy Act [R.S.C., 1985, c. B-3] nor any private con
tract could inhibit the right of the judgment creditor
to recover the amounts owing to her by the judgment
debtor. The judgment having been obtained very
shortly before the motion was set down, the judgment
debtor being in bankruptcy and counsel for the
secured creditor not objecting, I proceeded on the
assumption that the judgment was unsatisfied
although there was no direct evidence to that affect.
There was also no evidence of any debt owing by any
of the garnishees or of the secured creditors repre
sented to the judgment debtor.
It was argued that the statute or contract which cre
ated any priority rights in the secured creditors must
be considered preempted by the rights of the judg
ment creditor under the Canadian Human Rights Act.
The assets being sold were stated in the advertise
ment of sale to be the assets of the debtor and the
proceeds must be presumed to be owing to it. There
was no evidence as to the nature of the security being
realized upon. No provision of the Canadian Human
Rights Act was cited which might imply that the judg
ment resulting from an award of the Commission was
entitled to any priority over any category of creditor
of the bankrupt. No provision of the Act was cited
which was specifically alleged to limit or reduce the
rights of these or any secured creditors, or for that
matter any unsecured creditors.
It is my view that Rule 2300 requires an applica
tion by the judgment creditor. The applicant not
being the judgment creditor has in my view no right
to make the application and for that reason the appli
cation should be dismissed.
If I am wrong in so deciding I note that there is no
evidence of any debt owed by any of the garnishees
to the judgment debtor. It was argued that the assets
being sold were the property of the judgment debtor
according to the advertisement and that therefore any
proceeds must belong to it. If the auctioneer received
proceeds of a sale, which was not in evidence, such
proceeds would presumably be payable to the secured
creditors or to their agent. There was agreed to be no
proof of any obligation of the auctioneer to the judg
ment debtor and the motion as against Joiner was dis
missed on consent. The proceeds, if any, coming into
the hands of the secured creditors or their agent, and
none were shown to have done so, would in my view
be applicable first to satisfaction of their secured
claims. This is because there is no provision in the
statute specifically purporting to affect rights of
secured creditors and specific provisions are neces
sary to deprive a person of property rights without a
hearing, such deprivation would be the result if the
hearing by the Commission could result in the
secured creditors being deprived of their rights as
they could not be represented at it.
If one looks upon the Commission's application as
seeking to attach the overage, if any, after the pro
ceeds of sale have been used to satisfy the claim of
secured creditors, it is to be noted that the right to the
overage, if any, to which the judgment debtor would
have been entitled, would have been vested by the
Bankruptcy Act in the trustee for the benefit of the
unsecured creditors. There is nothing in the legisla
tion cited to me which in any way purports to affect
this vesting in the trustee (in any event there was no
evidence of any such overage and in the circum
stances it was agreed that the motion should he dis
missed as against the trustee). It is not conceivable
that in claiming that the Canadian Human Rights Act
took precedence over the Bankruptcy Act, the Com
mission was alleging the judgment creditor was
denied the right to prove a claim as an unsecured
creditor. Any claim to attach the overage after the
trustee in bankruptcy has discharged his obligation is
thus academic. In any event there is no evidence of
any such overage.
It may be that the rights of the Commission to
prosecute matters before its own tribunal is not
stayed by the Bankruptcy Act. It may also be that the
right to file an award in the Registry of this Court is
not stayed. However, having filed the award in this
Court, matters move from the jurisdiction of the
Commission to the jurisdiction of this Court and in
my view there is no right to proceed without leave.
In summary then, the motion as it refers to the gar
nishees, Joiner Sales Corporation and Alan, Lawson,
Fisher Inc. is dismissed on consent. The motion as it
relates to Ernst or any of the secured creditors for
which Ernst is agent is dismissed:
I. because the Commission has no standing to bring
an application in its own name under Rule 2300;
2. if I am in wrong in (1), because no debt has been
shown as owing by the garnishee Ernst nor any of
those for whom it is agent, and such a debt must be
shown before it can be attached or the garnishee
ordered to show cause;
3. if I am again wrong, and the evidence does imply
the possible existence of a debt from the secured
creditors because of the possibility of an overage
after the secured creditors are fully satisfied, because
any such overage is owed to the trustee and not to the
judgment debtor; and
4. because there is no right to bring a motion under
Rule 2300 to attach debts owed to a bankrupt without
leave.
Had any of the garnishees appeared to be heard on
the motion, because of the extremely tenuous nature
of the law relied on, the paucity or for the most part
non-existence, of the evidence, and the apparent "let
the chips fall where they may" reasoning in joining
parties, I would have awarded costs on a solicitor and
client basis. Because the secured creditors themselves
appeared rather than the agent served I awarded one
set of costs fixed at $200 for the day against the
Commission and payable to the secured creditors.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.