Barrette v. Crabtree Estate

Barrette v. Crabtree Estate

Section 114(1) C.B.C.A. is limited to debts that arise from services performed for the corporation; amounts awarded as pay in lieu of notice are damages for the employer's breach of the obligation to give notice and do not qualify as debts for services performed, therefore directors are not personally liable under s.114(1) for those amounts.

Citation
[1993] 1 SCR 1027
Parties
Appellants: Gaston Barrette et al.; Respondents: Heirs of the late H. Roy Crabtree and Harold R. Crabtree
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
25 March 1993
Procedural Posture
Appeal / Final Appeal to the Supreme Court of Canada
Outcome
Appeal dismissed
Legal Topics
Directors' Liability, Pay in Lieu of Notice, Statutory Interpretation, Employee Protection in Insolvency
Source Language
English
Commercial Law Corporations Law Labour and Employment Law Insolvency Law Directors' Liability Pay in Lieu of Notice Statutory Interpretation Employee Protection in Insolvency

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Parties

Gaston Barrette et al.

Appellants

Heirs of the late H. Roy Crabtree and Harold R. Crabtree

Respondents

Procedural Posture

Appeal / Final Appeal to the Supreme Court of Canada

Legal Issues

  1. 1 Whether directors are personally liable under s.114(1) C.B.C.A. for amounts awarded as pay in lieu of notice
  2. 2 Whether amounts payable in lieu of notice are "debts ... for services performed for the corporation" within s.114(1)
  3. 3 Proper scope and interpretation of s.114(1) as an exception to limited liability

Ratio Decidendi

Section 114(1) C.B.C.A. is limited to debts that arise from services performed for the corporation; amounts awarded as pay in lieu of notice are damages for the employer's breach of the obligation to give notice and do not qualify as debts for services performed, therefore directors are not personally liable under s.114(1) for those amounts.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Judgment of the Quebec Court of Appeal restored