Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

Marginal note:Security for unpaid wages, etc. — receivership

• 81.4 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a person who is subject to a receivership for services rendered during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $2,000 — less any amount paid for those services by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver.

• Marginal note:Commissions

  (2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the six-month period referred to in that subsection, are deemed to have been earned in those six months.

• Marginal note:Security for disbursements

  (3) The claim of a travelling salesperson who is owed money by a person who is subject to a receivership for disbursements properly incurred in and about the person’s business during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $1,000 — less any amount paid for those disbursements by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver.

• Marginal note:Rank of security

  (4) A security under this section ranks above every other claim, right, charge or security against the person’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2.

• Marginal note:Liability of receiver

  (5) If the receiver takes possession or in any way disposes of current assets covered by the security, the receiver is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the receiver.

• Marginal note:Claims of officers and directors

  (6) No officer or director of the person who is subject to a receivership is entitled to have a claim secured under this section.

• Marginal note:Non-arm’s length

  (7) A person who, in respect of a transaction, was not dealing at arm’s length with a person who is subject to a receivership is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the receiver, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered — it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length.

• Marginal note:Proof by delivery

  (8) A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form.

• Marginal note:Definitions

  (9) The following definitions apply in this section.

  compensation

  compensation includes vacation pay but does not include termination or severance pay. (rémunération)

  person who is subject to a receivership

  person who is subject to a receivership means a person any of whose property is in the possession or under the control of a receiver. (personne faisant l’objet d’une mise sous séquestre)

  receiver

  receiver means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). (séquestre)

Marginal note:Security for unpaid amounts re prescribed pensions plan — bankruptcy

• 81.5 (1) If the bankrupt is an employer who participated or participates in a prescribed pension plan for the benefit of the bankrupt’s employees, the following amounts that are unpaid on the date of bankruptcy to the fund established for the purpose of the pension plan are secured by security on all the assets of the bankrupt:

  • (a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;

  • (b) if the prescribed pension plan is regulated by an Act of Parliament,

    • (i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and

    • (i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency,

    • (i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,

    • (ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985,

    • (iii) an amount equal to the sum of all amounts that were required to be paid by the employer to the administrator of a pooled registered pension plan, as defined in subsection 2(1) of the Pooled Registered Pension Plans Act; and

  • (c) in the case of any other prescribed pension plan,

    • (i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament,

    • (i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in this section and section 81.6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,

    • (i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,

    • (ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament, and

    • (iii) an amount equal to the sum of all amounts that would have been required to be paid by the employer in respect of a prescribed plan, if it were regulated by the Pooled Registered Pension Plans Act.

• Marginal note:Rank of security

  (2) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s assets, regardless of when that other claim, right, charge or security arose, except

  • (a) rights under sections 81.1 and 81.2;

  • (b) amounts referred to in subsection 67(3) that have been deemed to be held in trust; and

  • (c) securities under sections 81.3 and 81.4.

• Marginal note:Liability of trustee

  (3) If the trustee disposes of assets covered by the security, the trustee is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.

Marginal note:Security for unpaid amounts re prescribed pensions plan — receivership

• 81.6 (1) If a person who is subject to a receivership is an employer who participated or participates in a prescribed pension plan for the benefit of the person’s employees, the following amounts that are unpaid immediately before the first day on which there was a receiver in relation to the person are secured by security on all the person’s assets:

  • (a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;

  • (b) if the prescribed pension plan is regulated by an Act of Parliament,

    • (i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and

    • (i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would be required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency,

    • (i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,

    • (ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985,

    • (iii) an amount equal to the sum of all amounts that were required to be paid by the employer to the administrator of a pooled registered pension plan, as defined in subsection 2(1) of the Pooled Registered Pension Plans Act; and

  • (c) in the case of any other prescribed pension plan,

    • (i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament,

    • (i.1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in section 81.5 and this section to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament,

    • (i.2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund,

    • (ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament, and

    • (iii) an amount equal to the sum of all amounts that would have been required to be paid by the employer in respect of a prescribed plan, if it were regulated by the Pooled Registered Pension Plans Act.

• Marginal note:Rank of security

  (2) A security under this section ranks above every other claim, right, charge or security against the person’s assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2 and securities under sections 81.3 and 81.4.

• Marginal note:Liability of receiver

  (3) If the receiver disposes of assets covered by the security, the receiver is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.

• Marginal note:Definitions

  (4) The following definitions apply in this section.

  person who is subject to a receivership

  person who is subject to a receivership means a person any of whose property is in the possession or under the control of a receiver. (personne faisant l’objet d’une mise sous séquestre)

  receiver

  receiver means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). (séquestre)

Marginal note:Right of unpaid supplier of perishable fruits or vegetables

• 81.7 (1) Subject to this section, if a person (in this section referred to as the “supplier”) has sold to another person (in this section referred to as the “purchaser”) perishable fruits or vegetables for use in relation to the purchaser’s business and the purchaser has not fully paid the supplier, the perishable fruits or vegetables, as well as any of the proceeds of sale, are deemed to be held in trust by the purchaser for the supplier, if

  • (a) the supplier has included in their invoice a notice, or has otherwise given notice within 30 days of the receipt by the purchaser of the perishable fruits or vegetables, in the prescribed form and manner, informing the purchaser of their intention to avail themselves of their right as beneficial owner of the perishable fruits or vegetables and the proceeds of sale in case the purchaser becomes bankrupt or subject to a receivership;

  • (b) the purchaser has 30 days or less to pay the entire balance owing to the supplier; and

  • (c) the purchaser, trustee or receiver does not pay to the supplier the entire balance owing when it becomes due as provided in the invoice.

• Marginal note:Clarification — paragraph 67(1)(a)

  (2) For greater certainty, paragraph 67(1)(a) applies once the perishable fruits or vegetables, as well as any of the proceeds of sale, are deemed to be held in trust by the purchaser for the supplier in accordance with subsection (1).

• Marginal note:Application to court for directions

  (3) The purchaser, trustee or receiver may apply to the court for directions in relation to any matter relating to this section, and the court shall give, in writing, the directions, if any, that it considers proper in the circumstances.

• Marginal note:Supplier may appeal to court

  (4) If a supplier is aggrieved by any act, omission or decision of the purchaser, trustee or receiver, the supplier may apply to the court and the court may make any order that it considers proper in the circumstances.

• Marginal note:Other rights saved

  (5) Nothing in subsection (3) or (4) precludes a person from exercising any right that the person may have under subsection 34(1) or section 37.

• Marginal note:Provincial law

  (6) Laws of general application in relation to trusts and trustees in force in the province in which the purchaser resided or carried on business when the purchaser became bankrupt apply to the trust, and in the event of any inconsistency or conflict between this section and the provisions of any of those laws, the provisions of those laws prevail to the extent of the inconsistency or conflict.

• Marginal note:Definitions

  (7) The following definitions apply in this section.

  perishable fruits or vegetables

  perishable fruits or vegetables includes perishable fruits and vegetables that have been repackaged or transformed by the purchaser to the extent that the nature of the fruits or vegetables remains unchanged. (fruits ou légumes périssables)

  proceeds of sale

  proceeds of sale means the proceeds from the sale by the purchaser of the perishable fruits or vegetables that are subject to the trust, whether or not those proceeds have been kept by the purchaser in a separate account or have been combined with other funds. (produit de vente)

  receiver

  receiver means a receiver within the meaning of subsection 243(2). (séquestre)

  subject to a receivership

  subject to a receivership, in relation to a person, means in respect of whom any property is under the possession or control of a receiver. (mise sous séquestre)