Canadian Shipper


OTA members in court fight over TCT Logistics

The Ontario Superior Court of Justice will hear a motion April 18 to decide whether a little-enforced provincial regulation governing load brokerage operations should apply to the bankruptcy of TCT Logistics.

The Ontario OTA is coordinating an effort by member companies caught empty handed following the bankruptcy of TCT Logistics. OTA legal advisor John Douma is spearheading OTA’s involvement in the case.

The OTA says the court hearing gives hope to Ontario carriers who provided transportation services for the Calgary-based trucking and logistics company but became unsecured creditors when the business entered receivership on Jan. 24.

The provincial 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. Lawyers representing a group of trucking companies left unpaid by TCT Logistics will argue that monies owed to the carriers must be set aside, in trust, to be paid to carriers that are legally entitled to their portion.

The issue is that provincial law says any time a broker receives money from a shipper, the portion owed to the carrier must be held in trust. Even in a bankruptcy, the trust accounts must be sacred. Protecting carriers is the intent of the law.

The case is of great interest to OTA because it would shine a spotlight on legal obligations of load brokers in Ontario. The load broker regulations under the Truck Transportation Act is poorly enforced by the province and many brokers aren’t even aware of the law. Ontario is the only province to have a law that governs the legal responsibilities of load brokers.

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