Moore (Bankrupt), Re, (2013) 314 O.A.C. 153 (CA)

• Judge: Doherty, Simmons and Pepall, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 10, 2013
• Jurisdiction: Ontario
• Citations: (2013), 314 O.A.C. 153 (CA);2013 ONCA 769

Moore (Bankrupt), Re (2013), 314 O.A.C. 153 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. DE.021

In The Matter Of the Bankruptcy of Matthew David Moore, of the City of Brampton, in the Regional Municipality of Peel, Province of Ontario

The Superintendent of Bankruptcy (appellant) v. 407 ETR Concession Company Limited and Matthew David Moore (respondents)

(C54560; 2013 ONCA 769)

Indexed As: Moore (Bankrupt), Re

Ontario Court of Appeal

Doherty, Simmons and Pepall, JJ.A.

December 19, 2013.

Summary:

407 ETR Concession Co. ("ETR") owned and operated Highway 407 pursuant to a 99-year lease with the Ontario government. By operation of s. 22(4) of the Highway 407 Act (the "407 Act"), toll debt owing to ETR could be enforced against a discharged bankrupt through the suspension of his or her vehicle permit by the Registrar of Motor Vehicles. As of October 2007, Moore's indebtedness to ETR amounted to $34,977.06. Moore made an assignment into bankruptcy on November 10, 2007. ETR was listed as a creditor on Moore's statement of affairs, but it did not file a proof of claim. Moore obtained a conditional discharge from bankruptcy in February 2011. He requested an Ontario Ministry of Transportation ("MTO") vehicle permit. MTO refused his request due to his outstanding indebtedness to ETR. On June 21, 2011, Moore obtained an absolute discharge from bankruptcy. Moore moved before a Registrar in Bankruptcy seeking a declaration that his debt to ETR was released as a result of his discharge, and an order compelling the MTO to issue a vehicle permit to him upon the payment of the usual licensing fees. The Registrar in Bankruptcy granted the declaration. ETR brought a motion seeking to set aside the order of the Registrar in Bankruptcy. Moore brought an amended motion essentially seeking the same relief he had already sought and obtained.

The Ontario Superior Court (the motions judge) granted ETR's motion and dismissed Moore's motion. The Superintendent of Bankruptcy sought leave to appeal the motion judge's decision.

The Ontario Court of Appeal, in a decision reported at (2012), 295 O.A.C. 373, granted the Superintendent leave to appeal the motion judge's decision. The Superintendent argued that the doctrine of federal paramountcy rendered s. 22(4) of the 407 Act inoperative with respect to a discharged bankrupt for two reasons. First, s. 22(4) conflicted with the operation of s. 178(2) of the Bankruptcy and Insolvency Act ("BIA"), which provided that a discharge released a bankrupt from all claims provable in bankruptcy. Second, s. 22(4) frustrated the purposes of the bankruptcy and insolvency system.

The Ontario Court of Appeal held that there was no operational conflict between s. 22(4) of the 407 Act and s. 178(2) of the BIA. However, the court concluded that there was a clear conflict between s. 22(4) of the 407 Act and the fresh start purpose of the bankruptcy system. The court allowed the appeal and set aside the order of the motions judge. In its place, it substituted an order that: (1) Moore's discharge dated June 21, 2011, released him from all claims provable in bankruptcy, including the debt of the 407 ETR as at November 10, 2007, and (2) the MTO was directed to issue license plates to Moore upon payment of the usual licensing fees. The court further declared that s. 22(4) of the 407 Act was inoperative to the extent that it thwarted the purpose of providing a discharged bankrupt with a fresh start.

Bankruptcy - Topic 4

General principles - Purpose of bankruptcy law - [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 - 407 ETR Concession Co. ("ETR") owned and operated Highway 407 pursuant to a 99-year lease with the Ontario government - By operation of s. 22(4) of the Highway 407 Act (the "407 Act"), toll debt owing to ETR could be enforced against a discharged bankrupt through the suspension of his or her vehicle permit by Ontario's Registrar of Motor Vehicles - The Superintendent of Bankruptcy argued that the doctrine of federal paramountcy rendered s. 22(4) inoperative with respect to a discharged bankrupt for two reasons - First, s. 22(4) conflicted with the operation of s. 178(2) of the Bankruptcy and Insolvency Act ("BIA"), which provided that a discharge released a bankrupt from all claims provable in bankruptcy - Second, s. 22(4) frustrated the purposes of the bankruptcy and insolvency system - The Ontario Court of Appeal held that "On a strict reading of the test for operational conflict, there is no impossibility of dual compliance. Section 22 of the 407 Act gives ETR the choice to notify the Registrar of a failure to pay. ETR may comply with both laws by declining to initiate the enforcement procedure. Where bankruptcy occurs after the ETR has initiated the enforcement procedure, compliance depends on the debtor. He is not required to obtain vehicle permits and is not required to pay his debt. Similarly, the Registrar cannot compel him to do so. I conclude that there is no operational conflict between s. 22(4) of the 407 Act and s. 178(2) of the BIA" - However, the court concluded that there was a clear conflict between s. 22(4) of the 407 Act and the fresh start purpose of the bankruptcy system - The court declared that s. 22(4) of the 407 Act was inoperative to the extent that it thwarted the purpose of providing a discharged bankrupt with a fresh start.

Highways - Topic 4026

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

Cases Noticed:

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. 19].

Canadian Bankers' Association v. Attorney General of Saskatchewan, [1956] S.C.R. 31, refd to. [para. 27].

Lévy (Sam) & Associés Inc. v. Azco Mining Inc., [2001] 3 S.C.R. 978; 280 N.R. 155; 2001 SCC 92, refd to. [para. 28].

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, consd. [para. 29].

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. 31].

Vachon v. Canada Employment and Immigration Commission et al., [1985] 2 S.C.R. 417; 63 N.R. 81, refd to. [para. 35].

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. 37].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 46].

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; 2005 SCC 13, refd to. [para. 59].

Quebec (Attorney General) v. Canadian Owners and Pilots Association, [2010] 2 S.C.R. 536; 407 N.R. 102; 2010 SCC 39, refd to. [para. 60].

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; 362 N.R. 208; 241 B.C.A.C. 1; 399 W.A.C. 1; 2007 SCC 23, refd to. [para. 61].

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. 63].

Ontario (Attorney General) v. Chatterjee, [2009] 1 S.C.R. 624; 387 N.R. 206; 249 O.A.C. 355; 2009 SCC 19, refd to. [para. 65].

Reference Re Securities Act, [2011] 3 S.C.R. 837; 424 N.R. 1; 519 A.R. 63; 539 W.A.C. 63; 2011 SCC 66, refd to. [para. 65].

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

Indalex Ltd. et al., Re (2013), 439 N.R. 235; 301 O.A.C. 1; 2013 SCC 6, refd to. [para. 66].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, appld. [para. 68].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120, refd to. [para. 70].

Deputy Minister of Revenue v. Rainville - see Bourgault's Estate v. Quebec (Deputy Minister of Revenue).

Bourgault's Estate v. Quebec (Deputy Minister of Revenue), [1980] 1 S.C.R. 35; 30 N.R. 24, refd to. [para. 73].

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

Jacs Jackets and Crest Ltd., Re; Workers' Compensation Board (Alta.) v. Deloitte Haskins and Sells Ltd., [1985] 1 S.C.R. 785; 60 N.R. 81; 63 A.R. 321, refd to. [para. 73].

Federal Business Development Bank v. Commission de la santé et de la sécurité du travail et al., [1988] 1 S.C.R. 1061; 84 N.R. 308; 14 Q.A.C. 140, refd to. [para. 73].

British Columbia v. Henfrey Samson Belair Ltd., [1989] 2 S.C.R. 24; 97 N.R. 61, refd to. [para. 73].

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. 76].

Newfoundland and Labrador v. AbitibiBowater Inc. et al., [2012] 3 S.C.R. 443; 438 N.R. 134; 2012 SCC 67, refd to. [para. 77].

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. [para. 80].

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. [para. 80].

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. 80].

Ryan Estate et al. v. Universal Marine Ltd. et al. (2013), 447 N.R. 1; 339 Nfld. & P.E.I.R. 312; 1054 A.P.R. 312; 2013 SCC 44, refd to. [para. 81].

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. [para. 83].

Local Loan Co. v. Hunt (1934), 292 U.S. 234, refd to. [para. 99].

Perez v. Campbell (1971), 402 U.S. 637, refd to. [para. 99].

Grogan v. Garner (1991), 498 U.S. 279, refd to. [para. 99].

Buland Empire Development Inc. v. Quinto Shoes Imports Ltd. et al. (1999), 123 O.A.C. 288 (C.A.), refd to. [para. 100].

KPMG Inc. v. Alberta Dental Association et al. (2005), 363 A.R. 170; 343 W.A.C. 170; 2005 ABCA 101, dist. [para. 104].

Caporale, Re, [1970] 1 O.R. 37 (S.C.), dist. [para. 106].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, sect. 67 [para. 33]; sect. 69.2(1), sect. 71 [para. 32]; sect. 72 [para. 39]; sect. 121, sect. 124 [para. 34]; sect. 178(2) [para. 3].

Highway 407 Act, S.O. 1998, c. 28, sect. 22(1), sect. 22(3), sect. 22(4), sect. 22(6), sect. 22(7) [para. 23].

Authors and Works Noticed:

Hansard - see Ontario Hansard, Legislative Assembly Debates.

Hogg, Peter, Constitutional Law of Canada (5th Ed. 2007), vol. 1, p. 449 [para. 65].

Houlden, Lloyd W., Morawetz, Geoffrey B., and Sarra, Janis P., The 2013 Annotated Bankruptcy and Insolvency Act (2013), p. 2 [para. 30].

Manitoba Law Reform Commission, Section 270 of the Highway Traffic Act (Report 97) (1997), p. 7 [para. 109].

Ontario Hansard, Legislative Assembly Debates, 36 Parliament., 2nd Sess., No. 47 (October 21, 1998), p. 1520 [para. 20].

Ontario Hansard, Legislative Assembly Debates, 36 Parliament, 2nd Sess., No. 48A (October 22, 1998) p. 2120 [para. 20].

Ontario Hansard, Legislative Assembly Debates, 36 Parliament, 2nd Sess., No. 50A (October 27, 1998), p. 1940 [para. 20].

Counsel:

Liz Tinker and Mark Taggart, for the appellant;

J. Thomas Curry, Andrew Parley and Jon Laxer, for the respondents;

David Thompson and Matthew G. Moloci, for the interveners.

This appeal was heard on June 10, 2013, before Doherty, Simmons and Pepall, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Pepall, J.A., and was released on December 19, 2013.