Court to hear appeal on TCT Logistics case

TORONTO, (Sept. 22, 2003) — The Ontario Superior Court of Justice has agreed to hear an appeal on last year’s ruling by Madame Justice Greer, who ordered that the funds paid by shippers to bankrupt TCT Logistics for transportation services were trust monies, and therefore not subject to claims by creditors of the company.

Ontario’s Truck Transportation Act (O. Reg. 556/92) requires companies that broker loads to keep the portion of the payment owed to the carrier in a trust account. Judge Greer’s ruling means that KPMG, the trustee in the bankruptcy of the Calgary-based trucking company, must release funds, believed to be $2.8 million, to a group of about two dozen Ontario carriers. The ruling was made despite KPMG’s argument that any monies set aside for the carriers should be released to pay secured creditors, who were reportedly owed $70 million.

The Ontario Trucking Association, which coordinated the legal challenge for carriers left unpaid by the company — said KPMG filed the appeal in order to seek clarification of a number of issues arising from Justice Greer’s order in August of last year, including whether they as receiver could set-off any unpaid amounts owing by carriers to TCT; and whether Ontario’s Load Broker regulation applied regardless of where the contract for services was entered into, where payment for the services was given or received, and where the shipment originated, travelled or was destined.

This past August, the Court ordered that KPMG’s motion be adjourned until after the appeal of the original August 23, 2002 decision is heard by the Ontario Court of Appeal. Although no date has yet been fixed for the hearing of the appeal, it is expected to be heard in the next few months, the OTA says.

Based on court filings, the OTA says it appears that in excess of $ 3.7 million in transportation payments are being held in trust pursuant to Madame Justice Greer’s ruling. Any carriers wishing to participate in the appeal should contact John Douma, OTA General Counsel at jddouma@rogers.com.