Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.), (2015) 476 N.R. 318 (SCC)

JudgeMcLachlin, C.J.C., Abella, Rothstein, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ.
CourtSupreme Court (Canada)
Case DateJanuary 15, 2015
JurisdictionCanada (Federal)
Citations(2015), 476 N.R. 318 (SCC);2015 SCC 51

Moloney v. MVA Admin. (2015), 476 N.R. 318 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

.........................

Temp. Cite: [2015] N.R. TBEd. NO.013

Attorney General of Alberta (appellant) v. Joseph William Moloney (respondent) and General of Ontario, Attorney General of Quebec, Attorney General of British Columbia, Attorney General for Saskatchewan and Superintendent of Bankruptcy (interveners)

(35820; 2015 SCC 51; 2015 CSC 51)

Indexed As: Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.)

Supreme Court of Canada

McLachlin, C.J.C., Abella, Rothstein, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ.

November 13, 2015.

Summary:

In 1996, the Administrator of the Motor Vehicle Accident Claims Act obtained a default judgment against Moloney as a result of an accident in which Moloney was an uninsured and at-fault motorist. Moloney filed for bankruptcy in 2008 and received an absolute discharge in 2011. The Government of Alberta demanded payment of the 1996 judgment, failing which Moloney would have his driving privileges revoked. Moloney applied for orders staying the enforcement of the judgment and staying the suspension of his driving privileges.

The Alberta Court of Queen's Bench, in a decision reported at (2012), 550 A.R. 257, allowed the application. The Administrator appealed.

The Alberta Court of Appeal, in a decision reported at (2014), 569 A.R. 177; 606 W.A.C. 177, dismissed the appeal. The Administrator appealed.

The Supreme Court of Canada dismissed the appeal.

Bankruptcy - Topic 4

General principles - Purpose of bankruptcy law - The Supreme Court of Canada reviewed the scheme and purposes of the Bankruptcy and Insolvency Act - See paragraphs 32 to 40.

Bankruptcy - Topic 4

General principles - Purpose of bankruptcy law - [See second and third Constitutional Law - Topic 3614 ].

Bankruptcy - Topic 2902

Claims provable - General - What constitutes - [See second Motor Vehicles - Topic 7226 ].

Bankruptcy - Topic 8843

Discharge of debtor - Effect of discharge - Attempt to enforce discharged debt - [See all Constitutional Law - Topic 3614 and second Motor Vehicles - Topic 7226 ].

Constitutional Law - Topic 3501

Paramountcy of federal statutes - General principles - The Supreme Court of Canada reviewed the principles applicable to the doctrine of federal paramountcy - See paragraphs 14 to 29.

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - In 1996, the Administrator of the Motor Vehicle Accident Claims Act obtained judgment against Moloney as a result of an accident in which Moloney was an uninsured and at-fault motorist - Moloney filed for bankruptcy in 2008 and received an absolute discharge in 2011 - Alberta demanded payment of the 1996 judgment, failing which Moloney would have his driving privileges revoked under s. 102 of the Traffic Safety Act (TSA) - Section 102(2) empowered Alberta to withhold driving privileges "until the judgment is satisfied or discharged, otherwise than by a discharge in bankruptcy" - Moloney applied for orders staying the enforcement of the judgment and the suspension of his driving privileges - The lower courts allowed the applications, finding that s. 102 was in operational conflict with the purposes of the Bankruptcy and Insolvency Act (BIA) and therefore ineffective under the doctrine of paramountcy - The Supreme Court of Canada dismissed Alberta's appeal - Section 178(2) of the BIA provided for the release of all claims provable in bankruptcy and prohibited creditors from enforcing them while s. 102(2) of the TSA disregarded this release and allowed for the use of a debt enforcement mechanism on such a claim by precisely excluding a discharge in bankruptcy - This was a true incompatibility - It was impossible for Alberta to apply s. 102 without contravening s. 178(2), and for Moloney to simultaneously be released from and liable to pay the judgment debt - Alberta was precluded from compelling payment of the judgment debt through either civil or administrative processes - See paragraphs 60 to 75.

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - In 1996, the Administrator of the Motor Vehicle Accident Claims Act obtained judgment against Moloney as a result of an accident in which Moloney was an uninsured and at-fault motorist - Moloney filed for bankruptcy in 2008 and received an absolute discharge in 2011 - Alberta demanded payment of the 1996 judgment, failing which Moloney would have his driving privileges revoked under s. 102 of the Traffic Safety Act - Section 102(2) empowered Alberta to withhold driving privileges "until the judgment is satisfied or discharged, otherwise than by a discharge in bankruptcy" - Moloney applied for orders staying the enforcement of the judgment and the suspension of his driving privileges - The Supreme Court of Canada upheld the lower court decisions which allowed Moloney's applications, finding that s. 102 was in operational conflict with the purposes of the Bankruptcy and Insolvency Act (BIA) and therefore ineffective under the doctrine of paramountcy - The court further found that the application of s. 102 frustrated Moloney's financial rehabilitation, thus contradicting and defeating the purpose of the discharge provided for in s. 178(2) of the BIA - The court rejected Alberta's assertion that, like any creditor, it could form a new binding contract with the discharged debtor for repayment of the debt, and that driving privileges could serve as fresh consideration for such a contract - The province was unlike a private creditor - Alberta's promise to refrain from doing what it had no authority to do could not constitute fresh consideration capable of supporting any contract - See paragraphs 77 to 83.

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - In 1996, the Administrator of the Motor Vehicle Accident Claims Act obtained judgment against Moloney as a result of an accident in which Moloney was an uninsured and at-fault motorist - Moloney filed for bankruptcy in 2008 and received an absolute discharge in 2011 - Alberta demanded payment of the 1996 judgment, failing which Moloney would have his driving privileges revoked under s. 102 of the Traffic Safety Act - Section 102(2) empowered Alberta to withhold driving privileges "until the judgment is satisfied or discharged, otherwise than by a discharge in bankruptcy" - Moloney applied for orders staying the enforcement of the judgment and the suspension of his driving privileges - The Supreme Court of Canada upheld the lower court decisions which allowed Moloney's applications, finding that s. 102 was in operational conflict with the purposes of the Bankruptcy and Insolvency Act (BIA) and therefore ineffective under the doctrine of paramountcy - However, the court disagreed with the lower court's finding that the operation of s. 102 interfered with the BIA's goal of equitably distributing assets - Whether or not s. 102 operated after the discharge did not impact the orderly distribution to creditors, nor did it affect the pool of assets to be distributed to them - In that regard, the judgment debt was not "preferred" or given any kind of priority under the BIA - If anything, s. 102 operated to increase global recovery for other creditors while leaving the single proceeding intact - See paragraphs 84 to 89.

Motor Vehicles - Topic 7226

Licensing and regulation of drivers - Licence - Suspension - For failure to satisfy judgment - The issue on this appeal was whether Alberta could deny the respondent a driver's licence under s. 102 of the Traffic Safety Act because he had an unpaid judgment for personal injury damages against him, even though that judgment had been discharged by bankruptcy - The lower courts found that s. 102 was in operational conflict with the Bankruptcy and Insolvency Act and therefore ineffective under the doctrine of paramountcy - Alberta argued that the purpose of s. 102 was to discourage people from driving without insurance, and that repayment of a judgment debt was merely incidental to the satisfaction of the regulatory requirement - The Supreme Court of Canada disagreed - While it was plausible that s. 102 might discourage drivers from driving uninsured, that was neither its main purpose nor its main effect - The purpose and effect of s. 102 was to deprive a judgment debtor of driving privileges until the judgment arising from a motor vehicle accident was paid in full or periodic payments in satisfaction of the judgment were being made under s. 103 - In substance, it was a debt collection mechanism - The deterrent effect of s. 102, if any, was not tied to the failure to maintain proper insurance - It was the failure to pay the judgment debt that triggered s. 102, not the failure to be insured - Further, failure to comply with the insurance requirement was already subject to a penalty under s. 54 - See paragraphs 47 to 49.

Motor Vehicles - Topic 7226

Licensing and regulation of drivers - Licence - Suspension - For failure to satisfy judgment - The issue on this appeal was whether Alberta could deny the respondent a driver's licence under s. 102 of the Traffic Safety Act because he had an unpaid judgment for personal injury damages against him, even though that judgment had been discharged by bankruptcy - The lower courts found that s. 102 was in operational conflict with the Bankruptcy and Insolvency Act and therefore ineffective under the doctrine of paramountcy - Alberta argued that s. 102 was not, in substance, a debt enforcement scheme, and that it merely imposed an additional monetary condition to obtain the privilege of driving - The Supreme Court of Canada held that Alberta's attempt to make a distinction between a judgment debt and a regulatory charge was irrelevant for two reasons - First, s. 102 was clearly aimed at the repayment of a judgment debt - Second, even if it were aimed at recovering the resulting regulatory charge, such a charge would nonetheless be a claim provable in bankruptcy, and as such, it would remain a debt subject to the bankruptcy process - See paragraphs 50 to 56.

Motor Vehicles - Topic 7226

Licensing and regulation of drivers - Licence - Suspension - For failure to satisfy judgment - [See all Constitutional Law - Topic 3614 ].

Cases Noticed:

Reference Re Secession of Quebec, [1998] 2 S.C.R. 217; 228 N.R. 203, refd to. [para. 14].

Canadian Western Bank et al. v. Alberta, [2007] 2 S.C.R. 3; 362 N.R. 111; 409 A.R. 207; 402 W.A.C. 207; 2007 SCC 22, refd to. [paras. 14, 101].

Initiative and Referendum Act (Manitoba), Re, [1919] A.C. 935 (P.C.), refd to. [para. 15].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, refd to. [paras. 15, 100].

Reference Re Securities Act (Can.), [2011] 3 S.C.R. 837; 510 A.R. 200; 527 W.A.C. 200; 2011 SCC 66, refd to. [para. 15].

PHS Community Services Society et al. v. Canada (Attorney General), [2011] 3 S.C.R. 134; 421 N.R. 1; 310 B.C.A.C. 1; 526 W.A.C. 1; 2011 SCC 44, refd to. [para. 15].

Husky Oil Operations v. Minister of National Revenue et al., [1995] 3 S.C.R. 453; 188 N.R. 1; 137 Sask.R. 81; 107 W.A.C. 81, refd to. [paras. 15, 104].

Ryan Estate et al. v. Universal Marine Ltd. et al., [2013] 3 S.C.R. 53; 447 N.R. 1; 339 Nfld. & P.E.I.R. 312; 1054 A.P.R. 312; 2013 SCC 44, refd to. [paras. 16, 107].

Reference Re Firearms Act (Can.), [2000] 1 S.C.R. 783; 254 N.R. 201; 261 A.R. 201; 225 W.A.C. 201; 2000 SCC 31, refd to. [para. 17].

Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113; 276 N.R. 339; 157 B.C.A.C. 161; 256 W.A.C. 161; 2001 SCC 67, refd to. [paras. 17, 109].

Sun Indalex Finance, LLC v. United Steelworkers - see Indalex Ltd. et al., Re.

Indalex Ltd. et al., Re, [2013] 1 S.C.R. 271; 439 N.R. 235; 301 O.A.C. 1; 2013 SCC 6, refd to. [paras. 19, 130].

British Columbia (Attorney General) v. Lafarge Canada Inc. - see Burrardview Neighbourhood Association v. Vancouver (City) et al.

Burrardview Neighbourhood Association v. Vancouver (City) et al., [2007] 2 S.C.R. 86; 362 N.R. 208; 241 B.C.A.C. 1; 399 W.A.C. 1; 2007 SCC 23, refd to. [para. 19] consd. [para. 94].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 19].

Smith v. R., [1960] S.C.R. 776, refd to. [para. 19].

114957 Canada ltée (Spraytech, Société d'arrosage) et al. v. Hudson (Town), [2001] 2 S.C.R. 241; 271 N.R. 201; 2001 SCC 40, refd to. [paras. 20, 102].

M & D Farm Ltd. et al. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961; 245 N.R. 165; 138 Man.R.(2d) 161; 202 W.A.C. 161, consd. [paras. 20, 94].

Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd. - see Lemare Lake Logging Ltd. v. 3L Cattle Co.

Lemare Lake Logging Ltd. v. 3L Cattle Co. (2015), 477 N.R. 26; 2015 SCC 53, refd to. [para. 23].

Rothmans, Benson & Hedges Inc. v. Saskatchewan et al., [2005] 1 S.C.R. 188; 331 N.R. 116; 257 Sask.R. 171; 342 W.A.C. 171, dist. [para. 24]; refd to. [para. 101].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120, refd to. [paras. 25, 109].

Bank of Montreal v. Marcotte et al., [2014] 2 S.C.R. 725; 462 N.R. 202; 2014 SCC 55, refd to. [para. 26].

Quebec (Attorney General) v. Canadian Owners and Pilots Association, [2010] 2 S.C.R. 536; 407 N.R. 102; 2010 SCC 39, dist. [para. 26]; refd to. [para. 101].

Irwin Toy Ltd. v. Québec (Procureur général), [1989] 1 S.C.R. 927; 94 N.R. 167; 24 Q.A.C. 2, refd to. [para. 26].

Quebec (Attorney General) v. Canada (Minister of Human Resources and Social Development) et al., [2011] 3 S.C.R. 635; 424 N.R. 198; 2011 SCC 60, refd to. [paras. 26, 109].

Clarke v. Clarke, [1990] 2 S.C.R. 795; 113 N.R. 321; 101 N.S.R.(2d) 1; 275 A.P.R. 1, refd to. [para. 26].

Jabour v. Law Society of British Columbia et al. and Attorney General of Canada et al.; Law Society of British Columbia et al. v. Attorney General of Canada et al. and Attorney General of Ontario et al., [1982] 2 S.C.R. 307; 43 N.R. 451, refd to. [para. 27].

O'Grady v. Sparling, [1960] S.C.R. 804, refd to. [para. 27].

Deloitte, Haskins and Sells Ltd. v. Alberta (Workers Compensation Board) - see Jacs Jackets & Crests Ltd., Re; Workers' Compensation Board (Alta.) v. Deloitte, Haskins & Sells Ltd.

Jacs Jackets and Crests Ltd., Re; Workers' Compensation Board (Alta.) v. Deloitte Haskins and Sells Ltd., [1985] 1 S.C.R. 785; 63 A.R. 321; 60 N.R. 81, refd to. [para. 27].

Century Services Inc. v. Canada (Attorney General) - see Leroy (Ted) Trucking Ltd. et al., Re.

Leroy (Ted) Trucking Ltd. et al., Re, [2010] 3 S.C.R. 379; 409 N.R. 201; 296 B.C.A.C. 1; 503 W.A.C. 1; 2010 SCC 60, refd to. [para. 33].

R. v. Fitzgibbon, [1990] 1 S.C.R. 1005; 107 N.R. 281; 40 O.A.C. 81, refd to. [para. 34].

Schreyer v. Schreyer, [2011] 2 S.C.R. 605; 418 N.R. 61; 268 Man.R.(2d) 154; 520 W.A.C. 154; 2011 SCC 35, refd to. [para. 36].

Industrial Acceptance Corp. v. Lalonde, [1952] 2 S.C.R. 109, refd to. [para. 36].

Vachon v. Canada Employment and Immigration Commission et al., [1985] 2 S.C.R. 417; 63 N.R. 81, refd to. [para. 39].

GMAC Commercial Credit Corp. - Canada v. T.C.T. Logistics Inc. et al., [2006] 2 S.C.R. 123; 351 N.R. 326; 215 O.A.C. 313; 2006 SCC 35, refd to. [para. 40].

Ross v. Registrar of Motor Vehicles (Ont.) and Ontario (Attorney General), [1975] 1 S.C.R. 5; 1 N.R. 9; 42 D.L.R.(3d) 68; 14 C.C.C.(2d) 322, refd to. [para. 42].

Provincial Secretary (P.E.I.) v. Egan, [1941] S.C.R. 396, refd to. [para. 42].

Thomson v. Transportation and Safety Board (Alta.) - see Gonzalez v. Driver Control Board (Alta.) et al.

Gonzalez v. Driver Control Board (Alta.) et al. (2003), 330 A.R. 262; 299 W.A.C. 262; 232 D.L.R.(4th) 237; 2003 ABCA 256, refd to. [para. 42].

Newfoundland and Labrador v. AbitibiBowater Inc. et al., [2012] 3 S.C.R. 443; 438 N.R. 134; 2012 SCC 67, refd to. [para. 55].

Ontario (Minister of Finance) v. Clarke et al., [2013] O.T.C. Uned. 1920; 115 O.R.(3d) 33; 2013 ONSC 1920, refd to. [para. 55].

R. v. White (J.K.), [1999] 2 S.C.R. 417; 240 N.R. 1; 123 B.C.A.C. 161; 201 W.A.C. 161, refd to. [para. 56].

407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy) - see Moore (Bankrupt), Re.

Moore (Bankrupt), Re (2015), 477 N.R. 1; 2015 SCC 52, refd to. [para. 57].

Gorguis v. Saskatchewan Government Insurance (2011), 372 Sask.R. 152; 2011 SKQB 132, revd. (2013), 414 Sask.R. 5; 575 W.A.C. 5; 2013 SKCA 32, refd to. [para. 60].

Buchanan et al. v. Superline Fuels Inc. (2007), 255 N.S.R.(2d) 286; 814 A.P.R. 286; 2007 NSCA 68, refd to. [para. 66].

Miller (Bankrupt), Re, [2001] O.T.C. 602; 27 C.B.R.(4th) 107 (Sup. Ct. Bktcy. Reg.), refd to. [para. 66].

Lucar (Bankrupt), Re, [2002] O.T.C. 272; 32 C.B.R.(4th) 270 (Sup. Ct. Bktcy. Reg.), refd to. [para. 78].

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [para. 81].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2005] 2 S.C.R. 473; 339 N.R. 129; 218 B.C.A.C. 1; 359 W.A.C. 1; 2005 SCC 49, refd to. [para. 81].

Reference Re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3; 217 N.R. 1; 206 A.R. 1; 156 W.A.C. 1; 121 Man.R.(2d) 1; 158 W.A.C. 1; 156 Nfld. & P.E.I.R. 1; 483 A.P.R. 1, refd to. [para. 81].

Rio Hotel Ltd. v. Liquor Licensing Board (N.B.), New Brunswick (Attorney General) and Saskatchewan (Attorney General), [1987] 2 S.C.R. 59; 77 N.R. 104; 81 N.B.R.(2d) 328; 205 A.P.R. 328, refd to. [para. 103].

NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees' Union, [2010] 2 S.C.R. 696; 407 N.R. 338; 294 B.C.A.C. 1; 498 W.A.C. 1; 2010 SCC 45, refd to. [para. 104].

Moore (Bankrupt), Re (2013), 314 O.A.C. 153; 118 O.R.(3d) 161; 2013 ONCA 769, refd to. [para. 115].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 178 [para. 36].

Traffic Safety Act, R.S.A. 2000, c. T-6, sect. 102 [para. 45].

Counsel:

Lillian Riczu, for the appellant;

R. Jeremy Newton, for the respondent;

Josh Hunter and Daniel Huffaker, for the intervener, the Attorney General of Ontario;

Alain Gingras, for the intervener, the Attorney General of Quebec;

Richard M. Butler, for the intervener, the Attorney General of British Columbia;

Thomson Irvine, for the intervener, the Attorney General for Saskatchewan;

Peter Southey and Michael Lema, for the intervener, the Superintendent of Bankruptcy.

Solicitors of Record:

Attorney General of Alberta, Edmonton, Alberta, for the appellant;

Bow Valley Counsel, Canmore, Alberta, for the respondent;

Attorney General of Ontario, Toronto, Ontario, for the intervener, the Attorney General of Ontario;

Attorney General of Quebec, Sainte-Foy, Quebec, for the intervener, the Attorney General of Quebec;

Attorney General of British Columbia, Victoria, British Columbia, for the intervener, the Attorney General of British Columbia;

Attorney General for Saskatchewan, Regina, Saskatchewan, for the intervener, the Attorney General for Saskatchewan;

Attorney General of Canada, Toronto, Ontario, for the intervener, the Superintendent of Bankruptcy.

This appeal was heard on January 15, 2015, before McLachlin, C.J.C., Abella, Rothstein, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ., of the Supreme Court of Canada. The following reasons for judgment were delivered on November 13, 2015, in both official languages, and included the following opinions:

Gascon, J., (Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner, JJ., concurring) - see paragraphs 1 to 90;

Côté, J. (McLachlin, C.J.C, concurring), concurring in the result - see paragraphs 91 to 133.

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2 practice notes
  • Moore (Bankrupt), Re, (2015) 477 N.R. 1 (SCC)
    • Canada
    • Canada (Federal) Supreme Court (Canada)
    • January 15, 2015
    ...Editor's Note: A decision in a companion case of Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.), is reported at 476 N.R. 318. Bankruptcy - Topic General principles - Purpose of bankruptcy law - [See Constitutional Law - Topic 3614 ]. Bankruptcy - Topic 8843 Discharge of......
  • Moore (Bankrupt), Re, 2015 SCC 52
    • Canada
    • Canada (Federal) Supreme Court (Canada)
    • January 15, 2015
    ...Editor's Note: A decision in a companion case of Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.), is reported at 476 N.R. 318. Bankruptcy - Topic 4 General principles - Purpose of bankruptcy law - [See Constitutional Law - Topic 3614 ]. Bankruptcy - Topic 8843 Discharge ......
2 cases
  • Moore (Bankrupt), Re, (2015) 477 N.R. 1 (SCC)
    • Canada
    • Canada (Federal) Supreme Court of Canada
    • January 15, 2015
    ...Editor's Note: A decision in a companion case of Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.), is reported at 476 N.R. 318. Bankruptcy - Topic General principles - Purpose of bankruptcy law - [See Constitutional Law - Topic 3614 ]. Bankruptcy - Topic 8843 Discharge of......
  • Moore (Bankrupt), Re, (2015) 340 O.A.C. 1 (SCC)
    • Canada
    • Canada (Federal) Supreme Court of Canada
    • January 15, 2015
    ...Editor's Note: A decision in a companion case of Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.), is reported at 476 N.R. 318. Bankruptcy - Topic 4 General principles - Purpose of bankruptcy law - [See Constitutional Law - Topic 3614 ]. Bankruptcy - Topic 8843 Discharge ......

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