Moore (Bankrupt), Re, (2015) 340 O.A.C. 1 (SCC)

• Judge: McLachlin, C.J.C., Abella, Rothstein, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ.
• Court: Supreme Court (Canada)
• Case Date: January 15, 2015
• Jurisdiction: Canada (Federal)
• Citations: (2015), 340 O.A.C. 1 (SCC);2015 SCC 52

Moore (Bankrupt), Re (2015), 340 O.A.C. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

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

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Temp. Cite: [2015] O.A.C. TBEd. NO.040

407 ETR Concession Company Limited (appellant) v. Superintendent of Bankruptcy (respondent) and Attorney General of Ontario, Attorney General of Quebec, Attorney General of British Columbia, Attorney General for Saskatchewan, Attorney General of Alberta, Michael Dow, Gwendolyn Miron and Peter Teolis (interveners)

(35696; 2015 SCC 52; 2015 CSC 52)

Indexed As: Moore (Bankrupt), Re

Supreme Court of Canada

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

November 13, 2015.

Summary:

Highway 407 in Ontario was an open-access private toll highway operated by 407 ETR Concession Co. Ltd. ("ETR"). Under s. 22(4) of the Highway 407 Act ("407 Act"), upon receipt of a notice of a person's failure to pay a toll debt, the Registrar of Motor Vehicles had to ("shall") refuse to issue or renew the debtor's vehicle permit. Moore accumulated a toll debt of $34,977.06. ETR notified the Registrar of Moore's failure to pay the toll debt. The Registrar refused to renew Moore's licence plates for his vehicle. Moore made an assignment in bankruptcy. His Statement of Affairs listed ETR as an unsecured creditor. Moore obtained an absolute discharge from bankruptcy. He sought an order that his toll debt had been released by his discharge and an order compelling the Ministry of Transportation to issue his vehicle permits. Moore contended that ETR could not use s. 22(4) of the 407 Act to collect and enforce the toll debt because it had been discharged pursuant to s. 178 of the Bankruptcy and Insolvency Act ("BIA"). He claimed that s. 22(4) conflicted with s. 178 and offended the doctrine of federal paramountcy.

The Ontario Superior Court of Justice, in a decision with citation 2011 ONSC 6310, concluded that s. 22(4) was not in conflict with the BIA, since it did not affect the equitable distribution of a bankrupt's property. The judge found that he had no jurisdiction, absent a conflict, to order the reinstatement of Moore's vehicle permits. The Superintendent of Bankruptcy appealed. He argued that s. 22(4) of the 407 Act conflicted with the operation of s. 178(2) of the BIA and that it frustrated the purposes of bankruptcy.

The Ontario Court of Appeal, in a decision reported at (2013), 314 O.A.C. 153, concluded that there was no operational conflict. However, the court held that s. 22(4) of the 407 Act frustrated the rehabilitative purpose of the BIA. It declared s. 22(4) inoperative to the extent that it conflicted with the purpose of giving a discharged bankrupt a fresh start. The court ordered that the Ministry of Transportation issue licence plates to Moore upon payment of the applicable licensing fees. 407 ETR appealed.

The Supreme Court of Canada dismissed the appeal. The court held that the operation of s. 22(4) of the 407 Act to enforce a debt that was discharged in bankruptcy was in conflict with s. 178(2) of the BIA. That operational conflict offended the doctrine of federal paramountcy. The operation of s. 22(4) also frustrated the financial rehabilitation purpose of s. 178(2). Section 22(4) of the 407 Act was constitutionally inoperative under the doctrine of federal legislative paramountcy to the extent that it was used to enforce a provable claim that had been discharged pursuant to s. 178(2) of the BIA. Côté, J. (McLachlin, C.J.C., concurring) did not see any operational conflict. However, they agreed that s. 22 of the 407 Act frustrated the federal purpose of financial rehabilitation that underlay s. 178(2) of the BIA, which was sufficient to trigger the application of the doctrine of federal paramountcy.

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 of debtor - Effect of discharge - Attempt to enforce discharged debt - [See Constitutional Law - Topic 3614 ].

Constitutional Law - Topic 3501

Paramountcy of federal statutes - General principles - [See Constitutional Law - Topic 3614 ].

Constitutional Law - Topic 3504

Paramountcy of federal statutes - General principles - Requirement of conflict or repugnancy - [See Constitutional Law - Topic 3614 ].

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - Highway 407 in Ontario was an open-access private toll highway operated by 407 ETR Concession Co. Ltd. ("ETR") - If a person failed to pay a toll debt within 90 days of receiving a notice of failure to pay, s. 22(1) of the Highway 407 Act ("407 Act") allowed ETR to notify the Registrar of Motor Vehicles of the failure to pay - Upon receipt of that notice, the Registrar had to ("shall") refuse to issue or renew the debtor's vehicle permit - The Supreme Court of Canada held that s. 22(4) of the 407 Act was constitutionally inoperative under the doctrine of federal legislative paramountcy, having regard to the Bankruptcy and Insolvency Act ("BIA"), to the extent that it was used to enforce a provable claim that had been discharged pursuant to s. 178(2) of the BIA - The court held that the operation of s. 22(4) of the 407 Act to enforce a debt that was discharged in bankruptcy was in conflict with s. 178(2) of the BIA - That operational conflict offended the doctrine of federal paramountcy - Section s. 22(4) of the 407 Act was inoperative to the extent that it conflicted with s. 178(2) of the BIA - The operation of s. 22(4) also frustrated the financial rehabilitation purpose of s. 178(2) - Côté, J. (McLachlin, C.J.C., concurring) did not see any operational conflict in this case - However, they agreed that s. 22 of the 407 Act frustrated the federal purpose of financial rehabilitation that underlay s. 178(2) of the BIA, which was sufficient to trigger the application of the doctrine of federal paramountcy.

Highways - Topic 4026

Use of highways - Toll highways - Collection and enforcement of tolls - [See Constitutional Law - Topic 3614 ].

Motor Vehicles - Topic 6105

Licensing and regulation of motor vehicles - Suspension or cancellation of registration - For failure to satisfy judgment or debt - [See Constitutional Law - Topic 3614 ].

Cases Noticed:

Moloney v. Administrator, Motor Vehicle Accident Claims Act (Alta.) (2015), 476 N.R. 318; 2015 SCC 51, refd to. [para. 1].

407 ETR Concession Co. v. Registrar of Motor Vehicles (Ont.) (2005), 214 O.A.C. 251; 82 O.R.(3d) 703 (Div. Ct.), refd to. [para. 18].

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. 24].

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. [para. 24].

Husky Oil Operations Ltd. 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. [para. 24].

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. [para. 25].

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

Burrardview Neighbourhood Association v. Vancouver (City) et al., [2007] 2 S.C.R. 86; 241 B.C.A.C. 1; 399 W.A.C. 1; 362 N.R. 208; 2007 SCC 23, refd to. [para. 25].

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, refd to. [para. 25].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, refd to. [para. 25].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 178 [para. 9]; sect 178(2) [para. 11].

Highway 407 Act, S.O. 1998, c. 28, sect. 22(1) [para. 4]; sect. 22(4) [para. 5]; sect. 22(6), sect. 22(7) [para. 6].

Counsel:

J. Thomas Curry, Andrew Parley, Jon Laxer and Gregory William MacKenzie, for the appellant;

Peter Southey and Michael Lema, 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;

Lillian Riczu, for the intervener, the Attorney General of Alberta;

David Thompson and Matthew G. Moloci, for the interveners, Michael Dow, Gwendolyn Miron and Peter Teolis.

Solicitors of Record:

Lenczner Slaght Royce Smith Griffin, Toronto, Ontario; 407 ETR Concession Company Limited, Woodbridge, Ontario, for the appellant;

Attorney General of Canada, Toronto, Ontario, for the respondent;

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

Attorney General of Quebec, Quebec, 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 Alberta, Edmonton, Alberta, for the intervener, the Attorney General of Alberta;

Scarfone Hawkins, Hamilton, Ontario, for the interveners, Michael Dow, Gwendolyn Miron and Peter Teolis.

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 judgment of the Supreme Court was delivered in both official languages on November 13, 2015, including the following opinions:

Gascon, J. (Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner, JJ., concurring) - see paragraphs 1 to 33;

Côté, J. (McLachlin, C.J.C., concurring) - see paragraphs 34 to 41.