COURT OF APPEAL FOR ONTARIO

CITATION: Canada (Superintendent of
    Bankruptcy) v. 407 ETR Concession Company Limited, 2013 ONCA 769

DATE: 20131219

DOCKET: C54560

Doherty, Simmons and Pepall JJ.A.

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

BETWEEN

The Superintendent of Bankruptcy

Appellant

and

407 ETR Concession Company Limited and Matthew David
    Moore

Respondents

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

Heard:  June 10, 2013

On appeal from the order of Justice Frank J. C. Newbould
    of the Superior Court of Justice dated October 25, 2011, with reasons reported
    at 30 M.V.R. (6th) 137.

Pepall J.A.:

A.

INTRODUCTION

[1]

Highway 407 is a public-private partnership between the respondent, 407
    ETR Concession Company Limited (ETR), and the Government of Ontario. The
    electronic, open-access highway was established to enhance transportation in and
    around the Greater Toronto Area.

[2]

ETR is a private company that owns and operates Highway 407 pursuant to
    a 99-year lease and certain concession agreements with the Ontario government. The
Highway 407 Act
, 1998, S.O. 1998, c. 28 (the
407 Act
), enables
    ETR to establish, collect and enforce tolls, administration fees and interest (toll
    debt) charged to members of the public for their use of the highway.

[3]

By operation of s. 22(4) of the
407 Act
, toll debt owing to ETR
    may be enforced against a discharged bankrupt through the suspension of his or
    her vehicle permit by Ontarios Registrar of Motor Vehicles. The appellant, the
    Superintendent of Bankruptcy (the Superintendent), argues that the doctrine
    of federal paramountcy renders s. 22(4) inoperative with respect to a
    discharged bankrupt for two reasons.  First, s. 22(4) conflicts with the
    operation of s. 178(2) of the
Bankruptcy and
    Insolvency Act
, R.S.C., 1985, c. B-3 (
BIA
), which
    provides that a discharge releases a bankrupt from all claims provable in
    bankruptcy. Second, s. 22(4) frustrates the purposes of the bankruptcy and
    insolvency system.

[4]

This appeal addresses whether these two statutory schemes can
    co-exist in the limited context of a discharged bankrupt.  For the reasons that
    follow, I am of the view that they cannot.

[5]

Although served, the Attorney General for the Province of
    Ontario did not appear to defend the provincial statutory scheme or to advance
    any public policy argument in support of its application in the circumstances
    of a discharged bankrupt.

B.

FACTS

[6]

Matthew David Moore was a truck driver. He had two vehicles. Due
    to his use of Highway 407, he incurred indebtedness to the ETR which he failed
    to pay.  As a result, in March 2005 and December 2006, ETR sent notices of his
    non-payment relating to two separate vehicles to the Registrar of Motor
    Vehicles for the Province of Ontario (the Registrar).  When the vehicle
    permit for one of the vehicles expired in August 2005, it could not be
    renewed.  Nonetheless, Moore continued to use Highway 407 for another 18 months
    contrary to s. 51 of the
Highway Traffic Act
, R.S.O. 1990, c. H.8.  As
    of October 2007, Moores indebtedness to ETR amounted to $34,977.06.

[7]

Moore made an assignment into bankruptcy on November 10, 2007.
    ETR was listed as a creditor on Moores statement of affairs filed in his
    bankruptcy proceedings, however, it did not file a proof of claim. A proof of
    claim would have enabled ETR to make submissions at any hearing into Moores
    discharge from bankruptcy and to share rateably with Moores other unsecured
    creditors in the bankruptcy.

[8]

After his assignment into bankruptcy, Moore was involved in a
    slip and fall. As a result of this accident, he retrained to become an
    automotive salesperson and now works in that field.   He gave evidence that he requires
    a vehicle permit for his livelihood.

[9]

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.

[10]

On
    June 21, 2011, Moore obtained an absolute discharge from bankruptcy.

[11]

Moore
    then 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. ETR was served but due to inadvertence, did not attend at the motion. Neither
    did the Superintendent. The Registrar in Bankruptcy granted the requested
    declaration on September 8, 2011.  Specifically, she ordered that:

(1)   the discharge of the bankrupt dated June 21, 2011
    released him from all claims provable in bankruptcy, including the debt of ETR
    as at November 10, 2007, and

(2)   the Ministry of Transportation was directed to issue
    plates to him upon payment of the usual licensing fees.

[12]

ETR
    then brought a motion before a judge 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 Superintendent was not served
    with either of these motions.

[13]

The
    motions judge granted ETRs motion and dismissed Moores motion. As of October
    25, 2011, the date of the order, Moores toll debt to ETR amounted to
    $88,767.83. The motions judge concluded that there was no operational conflict
    between s. 22(4) of the
407 Act
and s. 178(2) of the
BIA
. Although
    the motions judge noted that one of the purposes of the
BIA
is
    financial rehabilitation, he did not consider this purpose in the context of the
    second branch of the paramountcy analysis, that is, whether any legislative purpose
    of the
BIA
was thwarted.  He did not consider whether the operation of
    s. 22(4) to collect pre-bankruptcy indebtedness impeded Moores ability as a
    discharged bankrupt to have a fresh start post-bankruptcy or resulted in
    unequal treatment of unsecured creditors.

[14]

The
    Superintendent was concerned about the correctness of the motions judges
    decision and its impact on the integrity of the bankruptcy and insolvency
    system. Moore advised the Superintendent that he was not pursuing an appeal
    because he had received a very, very attractive offer to settle from ETR. The
    Superintendent therefore sought to appeal the order.

[15]

ETR
    moved to quash the Superintendents notice of appeal. The Superintendent then sought
    leave to appeal the motion judges decision. This Court (Weiler, Blair and
    Rouleau JJ.A.) concluded that while the Superintendent did not have the right
    to bring an appeal, the circumstances were exceptional, and leave to appeal
    under s. 193(e) of the
BIA
should be granted.

[16]

On
    November 26, 2012, Blair J.A. granted intervener status to Michael Dow,
    Gwendolyn Miron and Peter Teolis, proposed representative plaintiffs in a class
    action proceeding against ETR relating to its collection of toll debt in a
    bankruptcy context.

C.

ISSUES ON APPEAL

[17]

The
    issues on this appeal are
:

(i)    Does s. 22(4) of the
407 Act
conflict with the
operation
of s. 178 (2) of the
BIA
?

(ii)   Does s. 22(4) of the
407 Act
conflict with the
purpose
of the bankruptcy and insolvency system because it (a) thwarts the objective of
    providing the bankrupt with a fresh start or (b) creates a new class of debt
    that survives bankruptcy and frustrates Parliaments intention to treat all
    unsecured creditors equally?

[18]

While
    argued by the interveners, this appeal does not extend to address the time period
    post-bankruptcy and pre-discharge and more particularly, the effect of the
BIA

stay of proceedings on a bankrupts debt obligations.

D.

LEGISLATIVE SCHEMES

(i)

The
407 Act

[19]

In
407 ETR Concession Co. Ltd. v. Ontario (Registrar of Motor Vehicles)
(2005), 82 O.R. (3d) 703 (Div. Ct.), at para. 27, the court described the
    purpose of the
407 Act
:

[T]he purpose of the [
407 Act
] was to privatize the
    operation of Highway 407 and, given its open-access character, to provide [ETR]
    with an effective method of toll collection.  The legislature recognized that
    plate denial is a necessary feature of an open-access toll highway given the
    exceptionally large number of transactions, the small balances and the cost of
    other means of debt collection.

[20]

The
    legislative debates surrounding the enactment of the
407 Act
indicate
    that it was intended to relieve congestion on Highway 401 in and around the
    Greater Toronto Area, reduce the pollution caused by idling cars, and create
    jobs while striking an optimal risk-sharing arrangement with the private
    sector. See
Ontario, Legislative Assembly, Official Report of Debates
    (Hansard)
, 36 Parl., 2nd Sess., No. 47 (21 October 1998), at 1520 (Rob
    Sampson); 36 Parl., 2nd Sess., No. 48A (22 October 1998) at 2120 (John
    Gerretson); 36 Parl., 2nd Sess., No. 50A (27 October 1998) at 1940 (Doug Galt).

[21]

The
407 Act
designates Highway 407 as a private toll highway.  In its
    capacity as owner, ETR is required to provide the public with open access to
    the highway.  Members of the public who use the highway are obliged to pay a
    toll and any related fees to ETR.   ETR may establish, collect and enforce
    payment of tolls and administration fees. These powers are only to be exercised
    in accordance with the terms and conditions of an agreement entered into by the
    Minister for Privatization for the Province and ETR. (No such agreement was
    before the Court on this appeal.)  Toll debt collected by or on behalf of ETR is
    the property of ETR. There are no toll booths, and no fees are paid at the
    entrance to or exit from the highway. The system is electronic, and ETR invoices
    the owner of the vehicle permit or the lessee of an electronic transponder or
    toll device that has been mounted on to the users vehicle.

[22]

Pursuant
    to s. 15 of the
407 Act
, the toll debt is payable on the day an
    invoice is sent.  If not paid within 35 days, ETR may send a notice of failure
    to pay to the debtor.  If not paid within 90 days thereafter, ETR may send a s.
    22 notice to both the debtor and the Registrar.

[23]

The
    relevant sub-sections of s.  22 of the
407 Act
state:

22. (1) If a toll, and the related fees and interest, are not
    paid within 90 days of the day a person receives a notice of failure to pay
    under section 16, the owner [ETR] may notify the Registrar of Motor Vehicles of
    the failure to pay.

(3) The owner [ETR] shall promptly inform the person who
    received notice of failure to pay under section 16 that notice has been given
    to the Registrar of Motor Vehicles under subsection (1).

(4) If the Registrar of Motor Vehicles receives notice under
    subsection (1), he or she shall, at the next opportunity, refuse to validate
    the vehicle permit issued to the person who received the notice of failure to
    pay under section 16 and refuse to issue a vehicle permit to that person.

(6) If notice has been given to the Registrar of Motor Vehicles
    under subsection (1) and the toll and related fees and interest are
    subsequently paid, the owner [ETR] shall immediately notify the Registrar of the
    payment.

(7) If the Registrar of Motor Vehicles is notified by the owner
    [ETR] that the toll, fees and interest have been paid or is notified by the
    dispute arbitrator that the person is not responsible for paying the toll, fees
    and interest, the Registrar shall,

(a) validate any vehicle permit that he or she refused to
    validate under subsection (4);

(b) issue a vehicle permit to a person if it was refused
    under subsection (4).

[24]

As
    can be seen, the effect of this statutory provision is to permit ETR to enforce
    payment of toll debt. Once the Registrar receives notice from the ETR of a
    failure to pay, the Registrar
must
refuse to
    validate the debtors vehicle permit and may not issue a vehicle permit to that
    person. Once ETR notifies the Registrar that payment has been made (or the
    Registrar is notified by the dispute arbitrator that the debtor is not
    responsible for paying the toll), the Registrar shall validate and issue a
    vehicle permit.

[25]

There
    is nothing in the
407 Act
that requires a driver to use Highway 407.
    Conversely, ETR is unable to refuse anyone access to the highway, including debtors
    who have failed to pay toll debt. To enforce payment, it must rely on the
    powers granted under the
407 Act
.

[26]

There
    is no dispute that s. 22 of the
407 Act
is validly enacted pursuant to
    the Provinces authority under s. 92 of the
Constitution Act, 1867

and
    is therefore within the Provinces competence. As the motions judge noted at
    para. 33 of his reasons, there is also no quarrel with the proposition that the
    purpose of s. 22(4) is to enforce payment of a debt. Similarly, there is no
    issue that the denial of vehicle permits is a legitimate mechanism to achieve
    the purposes of the Highway 407 private/public partnership and the operation of
    that highway. Indeed, for most of those members of the public who use Highway
    407, the issues before this court are immaterial. The appellants challenge
    relates only to a member of the public who is a discharged bankrupt.

(ii)

The
BIA

[27]

Bankruptcy is triggered by insolvency. It is a procedure that is
    governed by statute. The
BIA
is the comprehensive code that addresses
    bankruptcy.  Rand J. captured the essence of the bankruptcy process in
Canadian
    Bankers Association v. Attorney General of Saskatchewan
, [1956] S.C.R. 31,
    at p. 46:

Bankruptcy is a well understood procedure by which an
    insolvent debtors property is coercively brought under a judicial
    administration in the interests primarily of the creditors.  To this proceeding
    not only a personal stigma may attach but restrictions on freedom in future
    business activity may result.  The relief to the debtor consists in the
    cancellation of debts which, otherwise, might effectually prevent him from
    rehabilitating himself economically and socially.

[28]

The
    Supreme Court reiterated these public policy objectives in
Sam Lévy &
    Associés Inc. v. Azco Mining Inc.
, 2001 SCC 92, [2001] 3 S.C.R. 978, at paras.
    33 and 65.

[29]

In
Husky Oil
Operations Ltd. v. Minister of National Revenue
,
    [1995] 3 S.C.R. 453, at para. 7, Gonthier J. stated that the bankruptcy system
    serves two distinct goals: the equitable distribution of a bankrupts assets
    among the estates creditors
inter se
and the financial rehabilitation
    of insolvent individuals.

[30]

In
The 2013 Annotated Bankruptcy and Insolvency Act

(Toronto:
    Carswell, 2013), at p. 2, Lloyd W. Houlden, Geoffrey B. Morawetz and Janis P.
    Sarra describe the purposes of the
BIA
as follows:

It is a fundamental purpose of the
Act
to provide for
    the financial rehabilitation of insolvent persons. The
Act
permits an
    honest debtor, who has been unfortunate, to secure a discharge so that he or
    she can make a fresh start and resume his or her place in the business
    community.

The
Act
was passed to provide for the orderly and fair
    distribution of the property of a bankrupt among his or her creditors on a
pari

passu
basis.

...

The Act provides a regime whereby the creditors of the bankrupt
    will pursue their claims by collective action through the trustee so that the
    assets of the bankrupt can be realized and distributed on an equitable basis
    subject to the priorities of preferred creditors and the rights of secured
    creditors. [Citations omitted.]

[31]

This last purpose was emphasized
    by Deschamps J. in
Century Services Inc. v. Canada (Attorney
    General)
,
2010 SCC 60, [2010] 3
    S.C.R. 379
, at para. 22:

While insolvency proceedings may be governed by different
    statutory schemes, they share some commonalities.  The most prominent of
    these is the single proceeding model.  Th
e
nature and purpose of the single proceeding model
are
described by Professor Wood in
Bankruptcy and Insolvency Law
:

They all provide a collective proceeding that supersedes the
    usual civil process available to creditors to enforce their claims.  The
    creditors remedies are collectivized in order to prevent the free-for-all that
    would otherwise prevail if creditors were permitted to exercise their
    remedies.  In the absence of a collective process, each creditor is armed
    with the knowledge that if they do not strike hard and swift to seize the
    debtors assets, they will be beat out by other creditors. [pp. 2-3]

The single proceeding model avoids the inefficiency and chaos
    that would attend insolvency if each creditor initiated proceedings to recover
    its debt.  Grouping all possible actions against the debtor into a single
    proceeding controlled in a single forum facilitates negotiation with creditors
    because it places them all on an equal footing, rather than exposing them to
    the risk that a more aggressive creditor will realize its claims against the
    debtors limited assets while the other creditors attempt a compromise.

[32]

When a person becomes bankrupt, all of his or her
    property vests in the trustee in bankruptcy: s. 71.  Section
69.2(1) of
    the
BIA
precludes any remedy against the debtor or the debtors
    property once in bankruptcy.  The exercise of a remedy to collect and enforce
    is stayed by the bankruptcy.

[33]

The
    bankrupts property is then divisible among the bankrupts creditors unless an
    exemption applies: s. 67.  Exemptions include prescribed payments relating to
    the essential needs of an individual and property that is exempt from execution
    or seizure under provincial laws. As a result of the operation of s. 67 and s.
    2(1)6 of the
Execution Act
, R.S.O. 1990, c. E.24, a motor vehicle not
    exceeding $5,000 in value is exempt.

[34]

Pursuant
    to s. 121 of the
BIA
, all debts and liabilities, present or future, to
    which the bankrupt is subject on the day of bankruptcy are deemed to be claims
    provable in bankruptcy.  Pursuant to s. 124, every creditor shall prove his or
    her claim, failing which, the creditor is not entitled to share in any
    distribution that is made. All unsecured claims provable in bankruptcy are to
    be paid rateably. The duties and the discharge of a bankrupt are addressed in
    Part VI of the
BIA
. Creditors who have filed a proof of claim receive
    notice of the discharge hearing and may make submissions and address their
    concerns at the hearing. As mentioned, if a creditor fails to file a proof of
    claim, it may not participate in any distribution of the debtors property.

[35]

In
Vachon v. Canada Employment and Immigration Commission
, [1985] 2
    S.C.R. 417, at p. 426, Beetz J. observed that an ordinary unsecured creditor
    with a claim provable in bankruptcy can only obtain payment of that claim
    subject to and in accordance with the terms of the
BIA.
The procedure laid
    down by that Act completely excluded any other remedy or procedure.

[36]

Section
    168.1 and following of the
BIA
address the discharge procedures.  Subsection
    178(2) provides that [s]ubject to subsection (1), an order of discharge
    releases the bankrupt from all claims provable in bankruptcy.   Examples of subsection
    (1) exceptions include debts arising from any enactment of a province that
    provides for loans or guarantees of loans to students and debts arising from an
    order or agreement for child or spousal support. No exception is specified for
    provincial driving or vehicle licensing debts generally or ETR toll debts
    specifically.

[37]

Not surprisingly, the regime results in hardship for
    many creditors.  In
Schreyer v. Schreyer
, 2011 SCC 35, [2011]
    2 S.C.R. 605, a wife argued that her equalization claim survived her husbands
    bankruptcy.  Writing for the Supreme Court, LeBel J. described the nature of
    the insolvency regime and the application of s. 178(2) at paras. 19-21:

The very design of insolvency legislation raises difficult
    policy issues for Parliament. Legislation that establishes an orderly
    liquidation process for situations in which reorganization is not possible,
    that averts races to execution and that gives debtors a chance for a new start
    is generally viewed as a wise policy choice. Such legislation has become part
    of the legal and economic landscape in modern societies. But it entails a
    price, and those who might have to pay that price sometimes strive mightily to
    avoid it. Despite the proven wisdom of the policies underpinning the insolvency
    legislation, it is understandable that few appreciate the haircuts or even
    outright losses that bankruptcies trigger. So creditors seek to obtain security
    or third-party guarantees. In other cases, statutory exemptions from the
    application of the
BIA
may apply. For a long time, governments took care
    to protect their own interests, but they now generally accept, albeit with some
    reluctance, that they should share the fate of ordinary creditors (
Century
    Services Inc. v. Canada (Attorney General)
, 2010 SCC 60, [2010] 3 S.C.R.
    379). Other types of exemptions that seem fair or even necessary are set out in
    the
BIA.
However, the more exemptions there are, the less likely it is
    that the basic policy objectives of insolvency legislation can be achieved.

As a consequence, the interpretation of the
BIA
requires
    the acceptance of the principle that every claim is swept into the bankruptcy
    and that the bankrupt is released from all of them upon being discharged unless
    the law sets out a clear exclusion or exemption.

...

For creditors, the discharge means that they cease to be able
    to enforce claims against the bankrupt that are provable in bankruptcy (L. W.
    Houlden, G. B. Morawetz and J. Sarra,
Bankruptcy and Insolvency Law of
    Canada
(4th ed. (loose-leaf)), vol. 3, at p. 6-283).

[38]

In
    that case, the Supreme Court determined that a provable claim under the
BIA
was to be broadly defined.  The Court upheld the decision that the wifes
    equalization claim was provable in her husbands bankruptcy and was therefore
    released by his discharge.

[39]

Section
    72 of the
BIA
touches on the effect of provincial legislation.  It provides
    that:

72. (1) The provisions of this Act shall not be deemed to
    abrogate or supersede the substantive provisions of any other law or statute
    relating to property and civil rights that are not in conflict with this Act,
    and the trustee is entitled to avail himself of all rights and remedies
    provided by that law or statute as supplementary to and in addition to the
    rights and remedies provided by this Act.

(2) No bankruptcy order, assignment or other document made or
    executed under the authority of this Act shall, except as otherwise provided in
    this Act, be within the operation of any legislative enactment in force at any
    time in any province relating to deeds, mortgages, hypothecs, judgments, bills
    of sale, chattel mortgages, property or registration of documents affecting
    title to or liens of charges on real or personal property or immovables or
    movables.

[40]

Lastly,
    the
BIA

constitutes a complete code governing the bankruptcy
    process. In
Husky Oil
, at para. 85, Gonthier J. stated:

Parliament has enacted a complete code in the
Bankruptcy
    Act
, one which necessarily calls upon provincial law for its operation.
    But Parliaments invitation stipulates an important limitation at the threshold
    of its domain, namely, that provincial law simply cannot apply when to do so
    would entail subverting the federal order of priorities in the
Bankruptcy
    Act
.

[41]

There
    are sound policy reasons in support of Parliaments decision to enact such a
    comprehensive code:

-

creditors
    are placed on an equal footing, in a single proceeding;

-

the
    trustee in bankruptcy may collect all of the bankrupts available assets for
    the benefit of his or her creditors;

-

the
    exemptions in the
BIA
will ensure that the bankrupt has enough to live
    on;

-

once
    the bankrupt is discharged, he or she is released from all claims provable and
    can embark on a fresh start in life, or put differently, financial
    rehabilitation;

-

uncertainty
    about which claims or debts are not released by a discharge is limited, as the
    exceptions are expressly described in the
BIA
.

E.

MOTIONs JUDGES REASONS

[42]

Having
    discussed the applicable legislation, I will now turn to the motions judges
    reasons.

[43]

The
    motions judge commenced his analysis by identifying the purpose of ss. 16 to 25
    of the
407
Act
.  In describing s. 22, at para. 14, he said that
    its purpose is directed to the collection of a debt. ETR did not quarrel with
    the proposition that the purpose of s. 22(4) is to enforce payment of a debt.  In
    a footnote, the motions judge stated that ETR pointed out that the collection
    of debts was in the public interest as well as in the interest of ETR, to ensure
    that the partnership flourishes.

[44]

The
    motions judge noted the presumption of constitutionality. He then proceeded to
    observe that s. 178(2) of the
BIA
does not extinguish indebtedness;
    rather, it releases bankrupts from claims provable in bankruptcy. He stated
    that the first goal of the bankruptcy system is to ensure the equitable
    distribution of a bankrupts assets among the estates creditors.  That said, a
    motor vehicle licence is not an asset belonging to the debtor; it is a
    privilege granted by a government authority and does not affect the equitable
    distribution of a bankrupts assets.  Accordingly, s. 22(4) of the
407 Act
did
    not conflict with the scheme of the
BIA
. Furthermore, it did not
    affect in any way the equitable distribution of the bankrupts property. As a
    result of these observations, the motions judge held that there was no
    operational conflict between s. 22(4) of the
407 Act
and the
BIA
.

[45]

As
    mentioned, the motions judge did not consider the second branch of the
    paramountcy doctrine. This would have involved an analysis of whether the
    legislative purpose of the
BIA
was thwarted by the operation of s.
    22(4). As part of his paramountcy analysis, the motions judge did not consider
    whether the collection of pre-bankruptcy indebtedness impeded Moores ability
    as a discharged bankrupt to have a fresh start post-bankruptcy or resulted in
    unequal treatment of unsecured creditors.

F.

STANDARD OF REVIEW

[46]

As
    the issue on appeal is a question of law, the standard of review is
    correctness:
Housen v. Nikolaisen
,
2002 SCC 33, [2002]
    2 S.C.R. 235, at para 8
.

G.

POSITIONS OF THE PARTIES

(i)

The Appellants Position

[47]

In
    brief, the appellant Superintendent submits that when s. 22(4) of the
407
    Act
is used to enforce claims provable in bankruptcy against discharged
    bankrupts, it is in operational conflict with the
BIA
.  Relying on
Schreyer
,
    the appellant argues that while a discharge does not extinguish a claim,
    creditors cease to be able to enforce claims against the bankrupt that are
    provable in bankruptcy.  ETR, like other unsecured creditors, is prohibited
    from enforcing its monetary claim after discharge, but s. 22(4) permits it to
    do indirectly that which it is prohibited from doing directly, thus bringing
    the operation of the subsection into direct conflict with s.178(2) of the
BIA
in the case of a discharged bankrupt.

[48]

The
    appellant also submits that s. 22(4) of the
407

Act
frustrates the two main purposes of the bankruptcy regime: the financial
    rehabilitation of insolvent individuals (also referred to as the fresh start
    principle) and the equal treatment of all unsecured creditors. Firstly, the
    motion judge erred in failing to properly direct his attention to the fresh
    start objective.  Section 22(4) frustrates this objective in that it permits ETR
    to coerce a bankrupt into satisfying debts released by a discharge in
    bankruptcy. Secondly, the only exceptions to the
pari passu
distribution of property among equal ranking creditors are listed in s.
    178(1).  ETRs debt does not fall within any such exception. The effect of the
    motion judges decision is to create a new class of debts that survives
    bankruptcy. Based on the motion judges decision, ETR need not participate in
    the bankruptcy process at all but can recover its entire debt nonetheless.

[49]

The
    appellant concludes by noting that s. 22(4) is valid provincial legislation and
    was not drafted to conflict with the
BIA
. However, when that
    subsection is applied in a bankruptcy situation, it conflicts with the
BIA
and frustrates the two main purposes of the bankruptcy system. To that extent,
    s. 22(4) is inoperable based on the doctrine of paramountcy.

(ii)

The Respondents Position

[50]

The respondent ETR answers by submitting that no federal head of power
    enables Parliament to require provinces to grant vehicle permits or to require
    third parties to extend credit to a discharged bankrupt.

[51]

Operational
    conflict is only engaged where dual statutory compliance is impossible.  This
    is not the case in this appeal.

[52]

As
    for purposive conflict, the respondent submits that provincial laws should only
    be declared inoperative due to frustration of a federal purpose in the clearest
    of cases. Inoperability arises where there is just one reasonable
    interpretation of the provision in issue and that interpretation frustrates the
    purpose of the federal law.  In ETRs submission, s. 22 of the
407 Act
does not frustrate the financial rehabilitation of the bankrupt, reorganize the
    priorities of creditors, or reorder how the bankrupts assets are to be
    distributed. Section 178(2) does not extinguish indebtedness; it simply
    releases the debtor from claims provable in bankruptcy. The MTOs right to
    suspend vehicle permits is unaffected by bankruptcy.  Moreover, the object of
    financial rehabilitation must be balanced against the creditors interest in
    protecting itself. If allowed, this appeal would force the Province of Ontario
    to grant vehicle permits to discharged bankrupts thereby empowering them to
    accumulate additional debt to ETR.

[53]

The
    respondent also submits that certain provincial highway traffic and other legislation
    will be affected if this appeal is allowed.

(iii)

The Interveners Position

[54]

The
    interveners agree with ETR that there is no operational conflict between the
    two statutes, but argue that there is a purposive conflict.

[55]

The
    interveners submit that the central issue in this appeal is whether ETR may use
    the vehicle permit denial remedy in the face of a stay of proceedings
    pre-discharge, and enforce payment of pre-bankruptcy indebtedness post-discharge.
    The procedure in the
BIA
precludes any other remedy or procedure to
    obtain payment of a claim provable in bankruptcy. The remedy at issue in this
    appeal operates to allow ETR to recover its debts in another manner; it is a
    method of debt collection and nothing more.

[56]

Section
    69.2(1) of the
BIA
excludes any remedy against the debtor or the debtors
    property. The denial of the vehicle permit is against the debtor, regardless
    of whether the permit is a privilege or property. The effect of the denial is
    to prevent a bankrupt from driving anywhere in Ontario, not just on Highway
    407. The
BIA
stay of proceedings prohibits the exercise of the
    remedy.

[57]

The
    interveners distinguish the other legislation relied upon by ETR. They argue
    that in instances where provincial highway traffic legislation allows for the
    suspension of licences, the legislation specifically provides that the release
    of debts through bankruptcy has no effect on licence denial.  The
407 Act
contains no such provision.

H.      ANALYSIS

[58]

Before
    embarking on an analysis of the interaction between the
BIA
and the
407
    Act
, certain basic principles should be addressed.

[59]

Firstly,
    where there is an inconsistency between validly enacted but overlapping
    provincial and federal legislation, the provincial legislation is inoperative
    to the extent of the inconsistency:
Rothmans, Benson & Hedges Inc. v.
    Saskatchewan
, 2005 SCC 13, [2005] 1 S.C.R. 188, at para. 11. The remainder
    of the provincial legislation is unaffected.  This is the doctrine of federal paramountcy.

[60]

Secondly,
    there are two ways in which a claim of paramountcy may arise. These were
    described by McLachlin C.J. in
Quebec (Attorney General) v. Canadian Owners
    and Pilots Association,
2010 SCC 39, [2010] 2 S.C.R. 536, at para. 64:

(i)      where there is an operational conflict between federal
    and provincial laws such that dual compliance is impossible; and

(ii)    where dual compliance is possible, but the provincial
    law is incompatible with, or frustrates the purpose of, the federal        legislation.
    As stated in
Canadian Western Bank
, at para. 73,

[T]here will be cases in which imposing an obligation to
    comply with provincial legislation would in effect frustrate the purpose of a
    federal law even though it did not entail a direct violation of the federal
    laws provisions.

[61]

Thirdly,
    the party seeking to invoke the doctrine of paramountcy bears the burden of
    proof:
British Columbia (Attorney General) v. Lafarge Canada Inc.
, 2007
    SCC 23, [2007] 2 S.C.R. 86, at para. 77.

[62]

The
    invocation of federal paramountcy on the basis of frustration of purpose
    requires clear proof of purpose and the standard is high. Mere permissive
    federal legislation does not suffice:
Canadian Owners and Pilots
    Association
, at paras. 67 and 68.

[63]

Fourthly,
    in considering a potential conflict, a court should first decide whether the
    two laws in issue are validly enacted. This involves an examination of the pith
    and substance of the impugned legislation. The analysis may concern the
    legislation as a whole or only certain of its provisions:
Canadian Western
    Bank

v. Alberta
, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 25.

[64]

To
    determine the pith and substance, the purpose of the enacting body and the
    legal effect of the law should both be examined:
Canadian Western Bank
,
    at para. 27. The dominant purpose of the legislation is decisive and incidental
    effects do not disturb the constitutionality of an otherwise
intra vires
law:
Canadian Western Bank
, at para. 28.

[65]

Lastly,
    Canadas federal system must balance flexibility and predictability. As such,
    when addressing the validity of statutes, there is a presumption of
    constitutionality. Based on this presumption, a government is presumed to have
    enacted a law that does not exceed its powers. Judicial restraint is the
    operative principle. As Professor Peter Hogg describes in his book,
Constitutional
    Law of Canada
, 5th

ed. (Scarborough: Thomson Carswell, 2007) vol.
    1, at p. 449, due to this presumption, in choosing between competing,
    plausible characterizations of a law, the court should normally choose that one
    that would support the validity of the law. As stated in
Canadian Western
    Bank
, at para. 37, and reiterated in
Chatterjee v. Ontario (Attorney
    General)
, 2009 SCC 19, [2009] 1 S.C.R. 624, at para. 2, a court should
    favour, where possible, the ordinary operation of statutes enacted by
both
levels of government (emphasis in original). Co-operative federalism should be
    facilitated, not impeded.  This approach is consistent with the dominant tide
    of modern federalism:
Reference

re

Securities Act
, 2011
    SCC 66, [2011] 3 S.C.R. 837, at para. 57.

[66]

In
    keeping with this approach, when a federal statute can be properly interpreted
    so as not to interfere with a provincial statute, such an interpretation is to
    be applied in preference to an alternative construction which would bring about
    a conflict between the two statutes:
Canadian Western Bank
, at para.
    75; and
Marine Services
, at para. 69.  The fact that Parliament has
    legislated in respect of a matter does not lead to the presumption that in so
    doing it intended to rule out any possible provincial action in respect of that
    subject:
Canadian Western Bank
, at para. 74; and
Sun Indalex
    Finance, LLC v. United Steelworkers
, 2013 SCC 6, at para. 57.

(a)

Operational Conflict

[67]

The
    first issue to consider is whether there is an operational conflict between s.
    22(4) of the
407 Act
and s. 178(2) of the
BIA
.  In this
    regard, the appellant relies on dicta in
Husky Oil
to argue that an
    operational conflict exists between the two statutes.  In response, ETR submits
    that the majority position in
Husky Oil
has been overtaken by subsequent
    jurisprudence such as
Canadian Western Bank
and
Chatterjee
.

(i)
Applicable Test

[68]

The
    test for operational conflict was established in
Multiple Access Ltd.  v.
    McCutcheon
, [1982] 2 S.C.R. 161, at p. 191.  On behalf of the majority, Dickson
    J. explained that an operational conflict exists where one enactment says
    yes and the other says no; the same citizens are being told to do
    inconsistent things; compliance with one is defiance of the other.

[69]

Early case law limited the application of the doctrine of
    paramountcy to cases of operational conflict. The frustration of purpose branch
    of paramountcy had not yet been developed.

[70]

However, in
Bank of Montreal v. Hall
, [1990] 1 S.C.R. 121,
La Forest J. appeared to broaden the test from
Multiple
    Access.

He stated at p. 154 that
dual compliance will be impossible when application of the
    provincial statute can fairly be said to frustrate Parliament's legislative
    purpose.  Although not so identified at the time, this decision would later
    come to be viewed as establishing a separate branch of federal paramountcy,
    namely, frustration of purpose.

[71]

Husky Oil
followed on the heels of
Hall
in 1995. In
    dealing with paramountcy, t
he majority relied on
Hall
and did not cite the test from
Multiple Access
.

The Court addressed the issue of
    conflict between the
Bankruptcy Act
and a provincial statute which
    purported to allow a creditor to recover a debt outside of the bankruptcy
    process. The impugned provincial legislation made the principal of a defaulting
    contractor personally liable to Saskatchewans workers compensation fund. A
    principal who was required to make a payment to the fund was then permitted to
    set that amount off against any amount the principal owed to the bankrupt
    contractors estate. At para. 39, Gonthier J., on behalf of the majority,
    observed that the form of a provincial interest must not be allowed to triumph
    over its substance:

The provinces are not entitled to do indirectly what they are
    prohibited from doing directly; ... there need not be any provincial intention
    to intrude into the exclusive federal sphere of bankruptcy and to conflict with
    the order of priorities of the
Bankruptcy Act
in order to render the
    provincial law inapplicable.  It is sufficient that the
effect
of provincial legislation is to do so. [Emphasis in original.]

[72]

In that case, the majority found that the effect of the
    provincial legislation in securing the Boards debt against the bankrupts
    estate conflicted with Parliaments intention to establish priorities as
    described in the
Bankruptcy Act
,
R.S.C., 1985, c. B-3. The
    offending provincial statutory provisions were therefore determined to be
    inapplicable in a bankruptcy context.

[73]

The majority summarized the Courts
    jurisprudence in the bankruptcy quartet (
Deputy Minister of
    Revenue v. Rainville
, [1980] 1 S.C.R. 35;
Deloitte
    Haskins and Sells Ltd. v. Workers' Compensation Board
,
    [1985] 1 S.C.R. 785;
Federal Business Development Bank v. Quebec
    (Commission de la santé et de la sécurité du travail)
,
    [1988] 1 S.C.R. 1061;
British Columbia v. Henfrey Samson Belair Ltd.
, [1989] 2 S.C.R. 24), concluding at paras. 32-39 that the quartet
    stands for six propositions:

(1)   provinces cannot create priorities between creditors or
    change the scheme of distribution on bankruptcy under s. 136(1) of the
Bankruptcy

Act
;

(2)   while provincial legislation may validly affect
    priorities in a non-bankruptcy situation, once bankruptcy has occurred,
    section 136(1) of the
Bankruptcy
Act
determines the status
    and priority of the claims specifically dealt with in that section;

(3)   if the provinces could create their own priorities or
    affect priorities under the
Bankruptcy

Act
this would
    invite a different scheme of distribution on bankruptcy from province to
    province, an unacceptable situation; and

(4)   the definition of terms such as "secured
    creditor", if defined under the
Bankruptcy

Act
,
    must be interpreted in bankruptcy cases as defined by Parliament, not the
    provincial legislatures. Provinces cannot affect how such terms are defined for
    purposes of the
Bankruptcy Act
;

...

(5)   in determining the relationship between provincial
    legislation and the
Bankruptcy

Act
, the form of the
    provincial interest created must not be allowed to triumph over its substance.
    The provinces are not entitled to do indirectly what they are prohibited from
    doing directly; and

(6)   there need not be any provincial intention to intrude
    into the exclusive federal sphere of bankruptcy and to conflict with the order
    of priorities of the
Bankruptcy Act
in order to render the provincial
    law inapplicable. It is sufficient that the
effect
of provincial legislation is to do so. [Emphasis in original.]

[74]

The Court did remark at para. 36 that for a
    provincial law to be inapplicable, the Court must find a clear conflict, that
    is, an inconsistent or mutually exclusive result. Applying the six
    propositions to the facts of
Husky Oil
, the
    Court found a conflict.

In contrast, the dissent
    applied the strict
Multiple Access
test and found that there was no
    conflict because the
Bankruptcy Act
did not prohibit that which the
    provincial legislation authorized.

[75]

Although not so described in the case, in my
    view, the majority in
Husky Oil
is best understood as a decision
    involving frustration of a federal purpose rather than an operational conflict.
    Firstly, the majority did not rely on
Multiple Access
but on
Hall
,
    a case which is now viewed as a frustration of purpose decision.  Secondly, the
    majority relied on the effect of the provincial legislation and indirect
    conflict to ground its paramountcy analysis and not the strict operational
    conflict test found in
Multiple Access
.

[76]

The treatment accorded
Husky Oil
is seen
in the Supreme Courts subsequent insolvency
    decisions and particularly in the dicta of Deschamps J.
in
GMAC
    Commercial Credit Corporation - Canada v. T.C.T. Logistics Inc.
, 2006 SCC 35, [2006] 2 S.C.R. 123
. The
    majoritys decision did not turn on the paramountcy doctrine, however,
    Deschamps J. invoked paramountcy in dissent,
stating:

In
Husky Oil
, Gonthier J., writing for the
    majority,  not only noted that provinces may not
directly
affect
    priorities under the
Bankruptcy Act
, but also stated propositions that
    permit the paramountcy doctrine to be applied where provincial legislation
indirectly
conflicts with the
BIA

Although the propositions enunciated in
Husky Oil
relate
    more specifically to conflicts between provincial statutes and the scheme of
    distribution established in the
BIA
, they have a scope that extends
    beyond that specific context, and they demonstrate how the paramountcy doctrine
    applies in the context of bankruptcy. [Emphasis in original.]

[77]

In
    2012, Deschamps J. again cited the majority in
Husky Oil
,
holding
    that  provinces cannot affect the order of priorities set out in the
BIA
(see
Newfoundland and Labrador v. AbitibiBowater Inc.
,
    2012 SCC 67, [2012] 3 S.C.R. 443, at para. 19
).

[78]

However,
    in
Indalex
, the Supreme Court again had the opportunity to apply the
    doctrine of paramountcy in an insolvency context. Deschamps J. cited
Husky
    Oil
, at para. 56,

to the effect that the provincial legislature
    cannot, through measures such as a deemed trust, affect priorities granted
    under federal legislation.  She did not repeat the six propositions enunciated
    in
Husky Oil
. Rather, she went on to apply the
Multiple Access

test as restated in
Canadian Western Bank
.  Based on that test,
    she found that there was a direct conflict between the provincial legislation
    and an order made under the
Companies Creditors Arrangement Act
,
    R.S.C., 1985, c. C-36 such that, at para. 60, compliance with the provincial
    law necessarily entails defiance of the order made under federal law.

[79]

It is therefore clear that for the purposes of
    operational conflict, the
Multiple Access
test is applicable and not the
    principles described in
Husky Oil
.

[80]

Moreover, t
he Supreme
    Court has consistently cited the
Multiple Access
test in other cases. See
Canadian Western Bank
, at para 71;
Chatterjee
, at para.
    36;
Lafarge
, at para. 76;
Rothmans
, at para. 11;
Law Society of British Columbia v. Mangat
, 2001 SCC 67, [2001] 3 S.C.R. 113, at para. 69;
114957
    Canada Ltée (Spraytech, Société darrosage) v. Hudson (Town)
, 2001 SCC 40, [2001] 2 S.C.R. 241, at para. 34;
M &
    D Farm Ltd. v. Manitoba Agricultural Credit Corp.
, [1999]
    2 S.C.R. 961
, at para. 40.

[81]

Most recently, in
Marine Services
    International Ltd. v. Ryan Estate
, 2013 SCC 44, at para.
    68, the Supreme Court restated the test in the following terms: Where the
    federal statute says yes and the provincial statute says no, or vice versa,
    compliance with one statute means a violation of the other statute.  It is
    the archetypical operational conflict.

[82]

In its recent jurisprudence, the Supreme Court
    has applied the test from
Multiple Access

narrowly to find an operational conflict only where it was
    impossible to comply with both statutes: see
Indalex
.

[83]

Where the federal legislation was merely
    permissive, the Court did not find a conflict because it was possible to comply
    with both laws: see
Quebec (Attorney General) v. Canada (Human Resources
    and Social Development)
, 2011 SCC 60, [2011] 3 S.C.R. 635
    and
Canadian Owners and Pilots Association
.  Where
    the legislation could be interpreted to avoid a conflict, or where there were
    other means of avoiding a conflict, the Court did not find a conflict: see
Marine
    Services International Ltd.
;
Chatterjee
and
Canadian
    Western Bank
. As such, t
he test for operational conflict is to be strictly applied and is engaged
    only where dual compliance is impossible.

(ii)
Application

[84]

Turning then to the facts that underlie
    this appeal, there is no issue that both the
BIA
and the
407 Act
are validly enacted,
    the former falling under federal authority and the latter under provincial
    authority.  The purpose of the
BIA
is to establish an organized system
    for the distribution of a bankrupts estate, and to provide for the financial
    rehabilitation of the bankrupt. The purpose of the
407 Act
is to
    establish a private toll highway with open access to the public, and to set out
    how the highway will operate. However, as noted by the motions judge, the
    purpose of s. 22(4) of the
407 Act
is to collect ETRs debt.  The
    legal effect of the
407 Act
is to permit ETR to operate the highway
    and to establish, collect and enforce toll debt from users regardless of their
    bankruptcy status.  As noted in para. 33 of the motions judges reasons, ETR
    does not quarrel with the proposition that the purpose of s. 22(4) of the
407
    Act
is to enforce payment of a debt.  It also cannot be seriously
    contested that ETRs claim to toll debt is a claim provable in bankruptcy.
The insertion of the provinces licensing authority
    does not alter this conclusion.

[85]

I
    must then consider the approach established by the Supreme Court in
Multiple
    Access,
as restated most recently in
Marine Servi
ces
: can
    there be dual compliance?

[86]

It
    is fair to conclude that Moore could be in compliance with both statutes. While
    he would not be able to drive his own car, he could forego obtaining a vehicle
    permit and not pay the toll debt to ETR.  Alternatively, he could pay the debt
    and obtain a vehicle permit.  As he is not required to pay the debt and the
BIA
does not require him to obtain a vehicle permit, there is no impossibility of
    dual compliance insofar as he is concerned.

[87]

What
    of ETR?  Can it be in compliance with both statutes?

[88]

The alleged conflict in this case is between s. 178(2) of the
BIA
, which releases the discharged bankrupt from most claims, and s.
    22(4) of the
407 Act
, which permits ETR to
    initiate a process by which the debtor will be denied a vehicle permit until he
    or she discharges the debt to ETR.

[89]

As indicated in
Schreyer
, at para. 21, s.
    178(2) of the
BIA
bars creditors from enforcing their claims after
    discharge.
Section 124 of the
BIA
provides that before an
    unsecured creditor is entitled to share in the distribution of the bankrupts
    property, it must file a proof of claim.  Under s. 178(2) of the
BIA
,
    such claims are then released on discharge unless they fall within one of the exceptions
    clearly set out in s. 178(1). Pursuant to s. 22(4) of the
407 Act
, ETR
    need not file a proof of claim and may collect all of its debt from a bankrupt
    in the absence of an exception. It can opt to ignore the regime established for
    all other creditors of the bankrupt.

[90]

That
    said,
the provincial legislation in this case is permissive in
    that it does not require ETR to initiate the collection process. ETR could
    comply with both statutes by declining to pursue its remedy under s. 22.
But,
    can ETR rely on s. 22(4) to enforce its claim against Moore? ETR asserts that
    it relies heavily on the collection process embodied in s. 22 as it cannot deny
    access to users who refuse to pay their bills, and other means of debt
    collection are costly. If ETR has the choice of declining to enforce, but
    routinely chooses to enforce, is there still no operational conflict?

[91]

In
    substance, s. 22(1) provides ETR with the choice of causing the collection of a
    debt from a discharged bankrupt, a choice which the
BIA
expressly
    abrogates. In this sense, the
BIA
says no and the
407 Act
says yes.

[92]

However,
    to find an operational conflict where it is possible to comply with both laws would
    not be in keeping with the strict test for operational conflict which the
    Supreme Court has consistently applied.  Furthermore, to take a more
    substantive approach to operational conflict would also render the frustration
    of federal purpose branch of the paramountcy test largely superfluous.

[93]

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
.

(b)

Conflict
    of Purpose

[94]

The
    next issue to consider is whether the operation of s. 22(4) of the
407 Act
conflicts with the purpose of the
BIA
. As mentioned, the purpose of s.
    22(4) is to collect toll debt. There are two
BIA
purposes in issue:
    the fresh start principle and the equal treatment of unsecured creditors.
    Given my conclusion on the former, it is unnecessary to address the latter.

(i)
Applicable Test

[95]

In
    2010, in
Canadian Owners and Pilots Association
, at para. 64, the
    Supreme Court described frustration of federal purpose as a second branch of
    the doctrine of paramountcy.

[96]

At
    para. 66, McLachlin C.J. described the test for frustration of purpose as
    follows:

The party seeking to invoke the doctrine of federal paramountcy
    bears the burden of proof.  That party must prove that the impugned
    legislation frustrates the purpose of a federal enactment.  To do so, it
    must first establish the purpose of the relevant federal statute, and then
    prove that the provincial legislation is incompatible with this purpose.
    The standard for invalidating provincial legislation on the basis of
    frustration of federal purpose is high; permissive federal legislation, without
    more, will not establish that a federal purpose is frustrated when provincial
    legislation restricts the scope of the federal permission. [Citations omitted.]

[97]

The
    Supreme Court cited this articulation of the test in its most recent
    paramountcy decision,
Marine Services
, at para. 69.

[98]

As
    discussed above, in assessing whether the provincial legislation frustrates a
    federal purpose, it must be recalled that when a federal statute can be
    properly interpreted so as not to interfere with a provincial statute, such an
    interpretation is to be applied in preference to an alternative construction
    which would bring about a conflict between the two statutes. The fact that
    Parliament has legislated in respect of a matter does not lead to the
    presumption that in so doing it intended to rule out any possible provincial
    action in respect of that subject.

(i)

Fresh Start Principle

(a)

The Fresh Start Purpose of the
BIA

[99]

I
    have already referred to the fresh start principle which underlies the
BIA
and which permeates the jurisprudence on bankruptcy legislation. From a
    debtors perspective, and indeed societys, financial rehabilitation is a primary
    goal of the bankruptcy regime.  At its heart, permitting a creditor to insist
    on payment of pre-bankruptcy indebtedness after a bankruptcy discharge frustrates
    a bankrupts ability to start life afresh unencumbered by his or her past
    indebtedness.  As often repeated in United States bankruptcy jurisprudence, one
    of the purposes of bankruptcy legislation is to give debtors a new opportunity
    in life and a clear field for future effort, unhampered by the pressure and
    discouragement of pre-existing debt. See for example
Local Loan Co. v.
    Hunt
, 292 U.S. 234 at 244 (1934);
Perez v. Campbell
, 402 U.S. 637
    at 648 (1971);
Grogan v. Garner
, 498 U.S. 279 at 286 (1991). Indeed, although
    obviously inapplicable in Canada, the Supreme Court of the United States held
    in
Perez
that state laws that attempted to enforce payment of a
    bankrupts indebtedness through licence denial were invalid because they
    conflicted with the fresh start principle
.

[100]

In Canada, there
    are some claims that constitute exceptions to the fresh start principle.  As
    mentioned, there are those claims that are expressly excluded from the ambit of
    s. 178(2). They are described in s. 178(1) of the
BIA
. One such claim
    was described by this court as the kind which society (through the
    legislators) considers to be of a quality which outweighs any possible benefit
    to society in the bankrupt being released of these obligations:
Buland
    Empire Development Inc. v. Quinto Shoes Imports Ltd
. (1999), 123 O.A.C.
    288 (C.A.), at para. 18. The claims excepted in s. 178(1) include certain
    specified provincial programmes. There is no exception for toll debt owing to
    ETR.

[101]

In
Schreyer
,
    LeBel J. observed, at para. 19, that giving debtors a chance for a new start is
    generally viewed as a wise policy choice.  He went on to state that exemptions
    that seem fair or even necessary are set out in the
BIA
. However, the
    more exemptions there are, the less likely it is that the basic policy
    objectives of insolvency legislation can be achieved.

[102]

In my view, the
    appellant has satisfied its burden of establishing the fresh start purpose of
    the
BIA
.

(b)

Incompatibility of s. 22(4) of the
407 Act

[103]

The parties addressed
    two competing lines of cases in support of their respective positions.  I do
    not propose to review all of the cases cited.  Some deal with the operational
    conflict branch of the paramountcy analysis or the validity of certain provincial
    legislation as a whole. (The 407 Act as a whole is not in question in this case.)
     Moreover, many of the cases relied upon were decided before the frustration of
    federal purpose branch of the paramountcy doctrine was solidified in Supreme
    Court jurisprudence.

[104]

There is limited
    provincial appellate commentary on comparable legislative regimes.
KPMG
    Inc. v. Alberta Dental Association (Re Hover)
, 2005 ABCA 101, 363 A.R. 170
    was a decision of the Alberta Court of Appeal.  It involved a case of professional
    misconduct by a dentist and the enforcement of disciplinary requirements
    consisting of the payment of a fine and associated costs.  Due to the
    disciplinary objective of the underlying provincial regulatory authority, the
    court found that requiring a suspended licensee to pay outstanding fines in
    order to have his license reinstated did not conflict with the
BIA
even
    though the payor was a discharged bankrupt. The power to suspend was founded
    not on non-payment of a debt but on a finding of professional misconduct.  If
    professional sanctions or conditions on licences were no longer operable in the
    case of a discharged bankrupt, self-regulating bodies would lose the ability to
    regulate their members conduct once in bankruptcy.  Further, the purpose of
    the dental licence suspension was not to enforce a debt but to impose
    conditions on licences which should be withheld from irresponsible
    individuals.

[105]

That said, at
    para. 58, Paperny J.A. distinguished the case from others where [t]he
    suspension of a drivers licence was motivated for an improper purpose, that
    is, to obtain payment that the licensing authority would not otherwise be
    entitled to in a bankruptcy. This suggests that where the purpose of the
    suspension is to collect a debt, there would be a conflict with the
BIA
.

[106]

I will also address
Re Caporale
, [1970] 1 O.R. 37-38 (S.C.), a decision of Houlden J. (as
    he then was), which was relied upon by ETR.  That case simply involved an
    application to discharge a bankrupt. The bankrupt had been involved in a motor
    vehicle accident and the judgment had been assigned to the MTO.  The MTO
    appears to have disputed the application for a discharge. In a very brief oral
    endorsement, Houlden J. granted the discharge noting that the bankrupt had been
    making payments to the MTO and the MTO would not be prejudiced by the granting
    of the discharge. He stated that the MTO had an effective remedy in that it
    could refuse the debtor the privilege of driving in Ontario until he had repaid
    the full amount of damages awarded against him arising from a motor vehicle
    accident that had been paid out of the Unsatisfied Judgment Fund. Houlden J.
    did not perform any paramountcy analysis, and it would appear that the decision
    was rendered in the context of a contested discharge application.

[107]

I do not view
    these cases as being akin to the appeal before this court.  The purpose of the
    legislation in those cases was directed at the provinces regulatory
    responsibilities and the public interest in establishing and enforcing
    standards of professional conduct for dentists, and presumably the promotion of
    safe and responsible driving.

[108]

Although public
    safety is not at stake in this appeal, ETR argues that the collection of debts
    arising from the use of Highway 407 is in the public interest, as well as in
    ETRs interest, so as to ensure that the public private partnership flourishes.
    I note in this regard that the Province did not advance such a position on this
    appeal.   Furthermore, as noted by the motions judge, the purpose and effect of
    s. 22(4) are to enforce the collection of debts.  This is the substance of the subsection.

[109]

I would also
    observe that s.198 of the
Highway Traffic Act
expressly states that,
    where a person has failed to satisfy a judgment for damages occasioned by a
    motor vehicle, his or her drivers licence shall be suspended and remain
    suspended until judgment is satisfied or discharged otherwise than by a
    discharge in bankruptcy.  No such language is found in the
407 Act
.
    Arguably, this reflects a provincial intention that the collection of ETRs
    indebtedness would be affected by bankruptcy.  In
Section 270 of the

Highway
    Traffic Act
(Report 97) (Winnipeg: Manitoba Law Reform Commission, 1997),
    the Manitoba Law Reform Commission discussed the provincial counterpart to
    Ontarios s. 198 at p. 7:

In those jurisdictions whose statutes are silent on the effect
    of bankruptcy, it is presumably arguable that bankruptcy would be held to
    discharge the debt within the meaning of the motor vehicle statute, thus
    clearing the way for a reinstatement of the suspended licence and
    registration.

[110]

In any event,
    this decision only addresses the legislation in issue on this appeal and does
    not purport to encompass statutes that reflect their own individualized
    legislative objectives.

[111]

It must also be recalled
    that the appellant does not seek a declaration that s. 22(4) of the
407
    Act
is invalid, but only that it is inoperable in relation to discharged bankrupts.
    Discharged bankrupts do not represent a large segment of the adult population in
    Canada or in Ontario, and there was no evidence that would suggest that they
    are disproportionate users of Highway 407. Typically, all unsecured creditors
    are negatively affected by bankruptcy and, as noted by LeBel J. in
Schreyer
,
    at para. 19, few appreciate the haircuts or losses that bankruptcies
    trigger.  The introduction into the mix of a private commercial participant in
    a public-private enterprise is inadequate in my view to remove the evident
    inconsistency with such a fundamental purpose of the
BIA
as financial
    rehabilitation of the discharged bankrupt. The
407 Act
should not be
    used to permit ETR to occupy the collectors lane.

[112]

While
    co-operative federalism should be the goal, it should not serve to undermine
    one of the two key rationales for the bankruptcy regime.

[113]

I also agree
    with the appellant that it is no answer to say that a vehicle permit is a
    privilege. Denial of a vehicle permit may constitute a significant deprivation.
    The non-renewal of a vehicle permit does not just affect a discharged bankrupts
    ability to drive his or her own vehicle on Highway 407 but on any road in
    Ontario.  Frequently it is essential to employment as well as family
    transportation requirements and responsibilities.  Ontario is a vast province.
    Denial of a vehicle permit has the potential to result in great hardship to a
    discharged bankrupt struggling to start anew.  The importance of a motor
    vehicle is recognized in the assets identified by Parliament and the
    Legislature as being exempt from execution or seizure.

[114]

I accept that as
    Highway 407 is an open-access road, ETR cannot stop a bankrupt from using the
    highway. That said, if ETR had filed a claim in Moores bankruptcy, its
    concerns could have been raised at a discharge hearing. Additionally and
    significantly, a vehicle permit may be denied based on debts incurred after an
    individuals discharge from bankruptcy.

[115]

In my view, the
    appellant has established that s. 22(4) of the
407 Act
is incompatible
    with the fresh start or financial rehabilitation purpose of the
BIA
.
    Indeed, it frustrates the
BIA
s heart and the very foundation on which
    insolvency legislation stands.

[116]

In conclusion, in
    keeping with a restrained approach to paramountcy and recognizing the
    presumption of constitutionality, I am of the view that there is a clear
    conflict between s. 22(4) of the
407 Act
and the fresh start
    purpose of the bankruptcy system.

(ii)

Equitable Treatment of Unsecured Creditors

[117]

The appellant
    also argues that the enforcement of ETRs claim pursuant to s. 22(4) frustrates
    the purpose of the bankruptcy and insolvency system by creating a new class of
    debt that survives bankruptcy and which frustrates Parliaments intention to
    treat all unsecured creditors equitably.  As mentioned, given my conclusion on
    the fresh start purpose, there is no need to address this submission.

I.        DISPOSITION

[118]

For these
    reasons, I would allow the appeal and, as requested by the appellant, set aside
    the order of the motions judge.  In its place, I would substitute an order
    that:

(1)

the
    discharge of Moore 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
    Ministry of Transportation is hereby directed to issue license plates to Moore
    upon payment of the usual licensing fees.

Further, I would declare that s. 22(4) of the
407 Act
is inoperative to the extent that it thwarts the purpose of providing a
    discharged bankrupt with a fresh start.

[119]

As agreed, the
    respondent shall pay the appellant $36,000 in partial indemnity costs inclusive
    of disbursements and applicable taxes.  The interveners shall bear their own
    costs.

Released:

DEC 19 2013                                   S.E.
    Pepall J.A.

DD                                                  I
    agree Doherty J.A.

I
    agree Janet Simmons J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Caster (Re), 2013 ONCA 785

DATE: 20131220

DOCKET: C57103

Hoy A.C.J.O., Gillese and Strathy JJ.A.

IN THE MATTER OF:  KYLE CASTER

AN APPEAL UNDER PART XX.1 OF THE
CODE

Kyle Caster, appearing in person

Joseph Di Luca, appearing as
amicus

Erin Winocur, appearing for the Attorney General

E. Krajewska, appearing for the Ontario Shores Centre
    for Mental Health Sciences

Heard:  December 19, 2013

On appeal against the disposition of the Ontario Review
    Board dated, May 8, 2013.

APPEAL BOOK ENDORSEMENT

[1]

We note that the index offence involved violence.  In our view, the
    Boards decision that a detention order was the least onerous and least
    restrictive disposition to the accused was reasonable and fully supported by
    the record.  In particular, we note the appellants treating psychiatrists
    reference to the appellants pattern of non-compliance with court and hospital
    imposed conditions, his unstructured lifestyle, his need to successfully
    abstain from substance use to rule out a diagnosis of schizoaffective disorder,
    and his need to be followed day after day in his efforts to abstain from
    substance abuse.  In light of our disposition of the appeal, it is unnecessary
    to decide
amicus
submission that the Board misapprehends the
    operation of ss. 672.91-.93 of the
Criminal Code
.  In our view, that
    submission warrants serious consideration in a case where it has first been
    fully and fairly argued before the Board.


COURT OF APPEAL FOR ONTARIO

CITATION: Dams v. TD Home and Auto Insurance
    Company, 2013 ONCA 730

DATE: 20131203

DOCKET: C57006

Feldman, Epstein and van Rensburg JJ.A.

BETWEEN

Wolfgang Dams and Tammy Dams

Plaintiff (Respondents)

and

TD Home and Auto Insurance Company

Defendant (Appellant)

Dwain Burns, for the appellant

Christopher J. Haber and Matthew Caldwell, for the
    respondents

Heard: November 20, 2013

On appeal from the judgment of Justice James A. Ramsay of
    the Superior Court of Justice, dated April 10, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals from an order that dismisses the motion for
    summary judgment. That order is an interlocutory order that can only be
    appealed to the Divisional Court with leave.

[2]

The appellant seeks to appeal to this court based on what it says is a
    finding by the motion judge as part of the reasons regarding the interpretation
    of some statutory provisions, which finding it says is a final order. He relies
    on this courts decision in
Ball v. Donais
(1993) 13 O.R. (3d) 322
    (C.A.).

[3]

This court recently made an important ruling interpreting and clarifying
    the decision in
Ball v. Donais
in the case of
Ashak v. Ontario
(2013) ONCA 375. That case clarifies that in most instances as the appeal is
    from the order and not the reasons, the order must contain any finding of law
    that the parties and the motion judge intended would be final, in order to give
    this court jurisdiction to hear an appeal. A corollary is that if the finding
    below is not final, it has not been finally determined in the action, and if
    not appealed with leave, it remains an open question for trial.

[4]

In this case the motion judge concluded for the purposes of the motion
    that the legislation allowed him to grant relief from forfeiture and that in
    all the circumstances, it was a fit case in which to grant relief from
    forfeiture. Whether he was actually granting relief or just not granting
    summary judgment is not totally clear.

[5]

In our view the order is not final and is not appealable to this court. The
    motion is therefore dismissed on that basis. Costs in the amount of $9,950.00
    to the respondents.


COURT OF APPEAL FOR ONTARIO

CITATION: Fray v. Evans, 2013 ONCA 776

DATE: 20131220

DOCKET: C56889

MacPherson, Watt and Pepall JJ.A.

In the Estate of Gail Mildred Evans (a.k.a. Gail
    Mildred Fray), deceased

BETWEEN

Carlton Eugene Fray
, personally and in his capacity

as
    administrator of the Estate of Gail Mildred Evans

Applicant
    (Respondent)

and

Richard Evans
and
    Donald Evans

Respondents
    (Appellant)

George F. Brant, for the appellant

Shawn M. Philbert, for the respondent

Heard: October 8, 2013

On appeal from the judgment of Justice David L. Edwards of
    the Superior Court of Justice, dated March 4, 2013 and his costs order dated
    March 27, 2013.

Pepall J.A.:

INTRODUCTION

[1]

This appeal concerns the
    distribution of a residual interest that has passed on an intestacy.

[2]

In his judgment dated March
    4, 2013, the application judge held that each of the appellant Richard Evans
    and his brother, Donald Evans (Donald), was entitled to a one-third interest
    in the residue of the estate of their mother who died intestate.  The
    application judge also resolved a dispute which arose between the respondent
    administrator and the two brothers as to the extent of the brothers interest
    in real property which was the estates largest asset, and whether the value of
    their interest in the estate was fixed as at the date of their mothers death
    or the date of distribution of the estate.  For the reasons that follow, I am of
    the view that the application judge erred in ruling that it was the former and
    therefore would allow the appeal.

FACTS

[3]

Gail Evans (Gail) died
    intestate on July 30, 1992.  She was survived by her two sons from a first
    marriage, the appellant and Donald, and by her second husband, the respondent
    Carlton Eugene Fray.

[4]

The respondent, a real
    estate agent, was the administrator of her estate.

[5]

The largest asset in the
    estate was a residential property (the residence).  It had previously been
    owned by Gail and her first husband and was the childhood home of their two
    sons.  For financial reasons, Gail had been forced to sell the residence after
    her first husband left the marriage but she subsequently repurchased it in 1982
    as a tenant in common with the respondent.  She held a 90 percent interest in
    the residence and the respondent a 10 percent interest.  She and the respondent
    lived there.

[6]

Since Gails death, the
    respondent has occupied the residence, paid the taxes and other expenses and
    also caused the mortgage to be discharged in 2012.  He paid no occupation rent
    to the estate.

[7]

At the date of Gails death
    in 1992, based on the respondents estimate of value, the residence was worth $200,000.
    As of the date when the application was heard in March 2013, it had a value of
    approximately $650,000.

[8]

In 1992, the net value of
    the estate was found by the application judge to be $95,745.61.

[9]

In 1992, the respondent as
    administrator paid $1,763.89 to each of the sons.  He then paid nothing more to
    the appellant until 15 years later when in August 2007, he paid him $2,000.
    Between 2007 and October 2011, the respondent paid $27,850 to the appellant and
    between November 1999 and October 2011, he paid $22,250 to Donald.  The
    receipts for payment stated:

Received from Carl E. Fray [amount] toward the yet to be
    determined amount of [my] inheritance from the estate of Gail M. Fray.

[10]

In
    addressing these payments, the application judge found at para. 18 of his
    reasons that:

Clearly, the parties were treating the situation as if Richard
    and Donald held an interest in the estate which was appreciating in value.

The parties conducted their affairs as if Donald and Richard
    held a specific interest in the real property and the payments by Carlton to
    them reflected the increased value of their share as a result of the
    appreciation of the real property.

[11]

In
    November 2011, the appellant retained counsel who wrote to the respondents
    counsel and broached the subject of the completion of the administration of
    Gails estate.  The respondent took the position that the appellant had been
    paid in full.

[12]

Unable
    to agree, on October 3, 2012, the appellant caused a transmission of interest
    to be registered on title to the residence.  The ownership interest was
    described as 30 percent in favour of each of the appellant and his brother and
    40 percent in favour of the respondent.

[13]

The
    respondent then commenced an application in December 2012 requesting a declaration
    that he was the sole owner of the residence and that the brothers entitlement
    had been satisfied.  He sought repayment of $11,108.24 from the appellant and
    $5,508.24 from Donald.

[14]

The
    parties agreed that pursuant to the
Succession Law Reform Act
, R.S.O.
    1990, c. S.26, the respondent was entitled to a preferential share of $75,000
    and one third of the residue of Gails property.  The two sons were also each
    entitled to one third of the residue.

[15]

The
    respondent as administrator never passed his accounts. There was no evidence of
    any release signed by the beneficiaries, and there was no court order of
    discharge.

APPLICATION JUDGES DECISION

[16]

In
    a brief endorsement, the application judge identified three issues to be addressed:

-

Did the brothers continue to have an interest in the estate?

-

If so, did the estate owe the brothers money or did they have an
    interest in the residence?

-

If not, did the brothers owe the estate any money?

The application judge found that the appellant and his
    brother each held a one-third interest in the residue of the estate.  He
    applied s. 9(1) of the
Estates Administration Act
, R.S.O. 1990, c.
    E.22, which provides that if not distributed to the beneficiaries within three
    years after the death of the deceased, real property vests in the
    beneficiaries.  He concluded that while the brothers each had a specific
    interest in the real property, it did not amount to a one-third interest.
    Rather, as the respondent argued, each had a 2.575655 percent interest in the
    real property. (The respondent arrived at this figure by following four steps.
    First, the estate residue was $20,745.61, the difference between the net value
    of the estate at the date of death, which was $95,745.61, and the respondents
    preferential share of $75,000. Second, the appellant was entitled to one third
    of the residue, or $6,915.20.  Third, the respondent paid the appellant
    $1,763.89 towards his share in October 1992, which reduced the share to
    $5,151.31. Fourthly, $5,151.31 is equal to 2.575655 percent of the value of the
    residence at the date of death, which was $200,000.)

[17]

Based
    on the residences value of $650,000, each brothers 2.575655 percent interest
    was worth $16,741.76.  It is implicit from his reasons that the application
    judge calculated their percentage interest based on a date of death valuation.

[18]

As
    the brothers had each been paid more than $16,741.76, they were required to pay
    the respondent the amounts requested by him.

PARTIES POSITIONS

(a)

The Appellant

[19]

The
    appellant submits that the respondent as administrator never concluded the
    administration of the estate.  He failed to liquidate the assets and make a
    distribution of the residue to the beneficiaries.

[20]

The
    application judge erred in calculating the value of the appellants entitlement
    based on the value of the residence and estate residue at the date of Gails
    death.

[21]

Furthermore,
    pursuant to s. 9 of the
Estates Administration Act
, on July 30, 1995,
    three years after Gails death, the property vested automatically in the three
    beneficiaries, one of whom was the appellant.  The appreciation in the value of
    the real property should accrue to the benefit of all of the residual
    beneficiaries and not just the respondent.

(b)

The Respondent

[22]

The respondent submits that the appellants interest in the estate was
    satisfied by the payments made.  He argues that s. 9 of the
Estates
    Administration Act
did not give the appellant a one-third interest in the
    residence but an interest amounting to 2.575655 percent based on a date of
    death valuation.  He relied on an Alberta case,
Re MacLellan Estate
,
    2011 CarswellAlta 1471 (Q.B.) in support of his position that
the correct date for determining value for distribution
    purposes is the date of death
.

ANALYSIS

(i)

Succession Law Reform Act

[23]

The
Succession Law Reform Act
addresses the devolution of an intestates
    estate.

(a)

preferential share

[24]

Section
    45(2) provides that when a person dies intestate and is survived by a spouse
    and issue, the spouse is entitled to a preferential share of the estate
    provided that the net value of the property exceeds the quantum of the
    preferential share.  If the net value is less than the preferential share, the
    spouse is entitled to the property absolutely.

[25]

The
    quantum of the preferential share is fixed by regulation, and the applicable
    regulation is that which was in force at the deceaseds date of death.  As
    agreed by the parties, given that Gail died in 1992, the preferential share
    amounted to $75,000.

[26]

The
    net value of the property is defined in s. 45 to mean the value of the
    property after payment of the charges thereon and the debts, funeral expenses
    and expenses of administration.

(b)

distribution of residue

[27]

Section
    46(2) of the
Succession Law Reform Act
provides:

Where a person dies intestate in respect of property and leaves
    a spouse and more than one child, the spouse is entitled to one-third of the
    residue of the property after payment [of the preferential share], if any.

[28]

Section
    47 provides that, subject to the rights of a spouse, the property is to be
    distributed equally among the deceaseds children (specifically, among his or
    her issue who are of the nearest degree in which there are issue surviving him
    or her).

(c)

statutory scheme

[29]

Accordingly,
    under this statutory scheme, an administrator must:

(1)

pay the
    charges on the property and the debts, funeral expenses and expenses of
    administration;

(2)

ascertain
    the net value of the property to determine whether the preferential share may
    be paid to the spouse or whether the property vests absolutely in the spouse;

(3)

collect and
    distribute the residue to the beneficiaries.

(ii)

Estates

Administration

Act

[30]

Section
    9(1) of the
Estates Administration Act
provides that real property
    vests in beneficiaries within three years of the death of the deceased if it
    has not been disposed of, conveyed to, divided or distributed to the
    beneficiaries.  Specifically, s. 9(1) states:

Real property not disposed of, conveyed to, divided or
    distributed among the persons beneficially entitled thereto under s. 17 by the personal
    representative within three years after the death of the deceased is, subject
    to the
Land Titles Act
in the case of land registered under that Act
    and subject to subsections 53(3) and (5) of the
Registry Act
and
    subject as hereinafter provided, at the expiration of that period, whether
    probate or letters of administration have or have not been taken, henceforth
    vested in the persons beneficially entitled thereto under the will or upon the intestacy
    or their assigns without any conveyance by the personal representative, unless
    such personal representative, if any, has signed and registered, in the proper
    land registry office, a caution in Form 1, and, if a caution is so registered,
    the real property mentioned therein does not so vest for three years from the
    time of the registration of the caution or of the last caution if more than one
    was registered.

(iii)    Application of
    Statutory Schemes

[31]

Applying these statutory schemes to the facts of this case, it is
    conceded that the net value of the estate exceeded $75,000 and that each of the
    appellant, Donald and the respondent was entitled to one third of the residue
    of the property.  The property in this case consisted primarily of real
    property, that is, the residence in which the respondent resides.

[32]

The
    valuation date for purposes of calculating entitlement to a preferential share
    is the date of death.  In 1992, the net value of the property amounted to
    $95,745.61.  As such, it exceeded the $75,000 preferential share by
    approximately $20,000.  It was therefore evident that the respondent was
    entitled to a preferential share under s. 45(2) of the
Succession Law
    Reform Act
but was not entitled to Gails property absolutely.

[33]

However,
    this valuation based on date of death is for the purposes of calculating
    entitlement to a preferential share.  It does not determine the precise value
    of the residue as, absent agreement, this may only be ascertained on collection
    and conversion of Gails assets and distribution of the beneficiaries respective
    one-third shares. Although dealing with a different issue, the Nova Scotia
    Supreme Court, Appeal Division in
Re Estate of Joseph W. Rudderham
(1971), 21 D.L.R. (3d) 457, stated at p. 465:

The general rule of administration of estates requires
    valuation of assets to be distributed among beneficiaries to be made as of the
    date of distribution and not as of the date of the testator's death.

[34]

The
    appellant was entitled to one third of the residue of his mothers property.
    In 1992, he received a payment of $1,764.89 and nothing more until 2007.

[35]

The
    application judge correctly found that the residue had not been distributed and
    that given the passage of three years since Gails death, the real property
    vested in the three beneficiaries without the necessity of a conveyance from
    the respondent as administrator.  Moreover, as the application judge found,
    this was consistent with the parties expectations.  They all believed that
    their respective interests were appreciating in value.  The dispute arose
    because, based on the respondents view of things, only his share of the
    residue was to reflect the full appreciation in the value of the residence.
    Assuming reasonable expenses and costs of administration, and the absence of
    payment of any occupation rent, this would result in a considerable windfall
    for the respondent.

[36]

In
    supporting the respondents position, the application judge erred in valuing
    the appellants interest in the residue as of the date of death of his mother.
    The residue of an estate is crystalized and determined after the deceaseds
    property has been collected and debts and expenses paid including those
    associated with the administration of the estate.

[37]

It
    is possible for beneficiaries to agree to the quantum of their entitlement but
    it is clear from the record and from the application judges findings that
    there was no such agreement here.

[38]

Furthermore,
    the decision of
Re MacLellan
does not assist the respondent.  The
    issue in that case revolved around whether the property exceeded the quantum of
    the preferential share.  The Alberta court used the date of death to determine
    that the spouse was entitled to the entirety of the estate because the value of
    the property was less than the quantum of the preferential share.

DISPOSITION

[39]

I
    would allow the appeal, set aside the judgment of the application judge and
    substitute an order: (i) that the appellant has a one-third interest in the
    residue of Gails estate; (ii) directing a reference to determine the residue
    of the estate and the appropriate quantum of the appellants share of his
    mothers estate.  This should include, but not be limited to, an identification
    of the charges paid for the residence, the debts and expenses of administration,
    any occupation rent due on account of the appellants interest in the residence;
    and (iii) that the respondent in his capacity as administrator is to pass his
    accounts.

[40]

The
    application judge fixed costs in the amount of $21,000 in favour of the
    respondent to be paid by the appellant.  I would set aside that costs order and
    substitute an order in favour of the appellant in the amount of $7,200
    inclusive of disbursements and applicable tax on account of the proceedings
    below.  In addition, I would order the respondent to pay costs of $7,800
    inclusive of disbursements and costs on account of the appeal.

Released:

JCM                                                S.E.
    Pepall J.A.

DEC 20 2013                          I agree J.C. MacPherson
    J.A.

I agree
    David Watt J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Hartley v. Cunningham, 2013 ONCA 759

DATE: 20131217

DOCKET: C57242

Juriansz, Hourigan and Benotto JJ.A.

BETWEEN

Katherine Anne Hartley

Applicant (Appellant)

and

Hilary Cunningham and Stephen Scharper

Respondents (Respondents in appeal)

John A. Howlett, for the
    appellant

Clayton C. Ruby and Nader R.
    Hasan, for the respondents

Heard and released
    orally: December 10, 2013

On appeal from the judgment of
    Justice J. Patrick Moore of the Superior Court of Justice, dated May 17, 2013.

ENDORSEMENT

[1]

The appellant appeals a judgment dismissing her application for a
    declaration that she is the sole owner of a large Norway maple tree so that she
    can cut down the tree without the respondents consent. The respondents are her
    next-door neighbours. The appellant argues that ownership of the tree should be
    determined in accordance with jurisprudence under the
Trees Act
,
    R.S.O. 1990, c. T.20, which was replaced by the
Forestry Act
, R.S.O.
    1990, c. F.26. Under that jurisprudence, the appellant submitted she would be
    the sole owner of the tree because at ground level its trunk was entirely or
    almost entirely on her side of the property line.

[2]

The
Forestry Act
provides in s. 10(2): Every tree whose trunk
    is growing on the boundary between adjoining lands is the common property of
    the owners of the adjoining lands. There is no definition of trunk in the
    legislation.

[3]

The application judge considered the evidence before him, including the
    evidence of the expert witnesses, and concluded that the word trunk should be
    given its ordinary dictionary meaning. It is that part of the tree from its
    point of growth away from its roots up to where it branches out to limbs and
    foliage. There are no words in the statute that limit the meaning to the
    trunk at ground level. He commented that the point at which the trunk emerges
    from the soil would be lead to arbitrariness because soil can be added to the
    base of the tree to change the point of emergence. On the basis of the evidence
    before him, the application judge concluded that the tree was a boundary tree
    and that the appellant and the respondents are co-owners.

[4]

We agree with the application judges interpretation of s. 10(2) of the
Forestry
    Act
and his conclusion dismissing the appellants application to be
    declared the sole owner of the tree.

[5]

The appeal is therefore dismissed with costs to the respondents fixed in
    the amount of $10,000, all inclusive.

R.G. Juriansz J.A.

C.W. Hourigan J.A.

M.L. Benotto
    J.A."


COURT OF APPEAL FOR ONTARIO

CITATION:  Heger v. Varajao, 2013 ONCA 732

DATE: 20131204

DOCKET: C56103

Hoy A.C.J.O., Feldman and van Rensburg JJ.A.

BETWEEN

Elizabeth Heger and Heinrich Heger

Plaintiffs (Appellants)

and

Michael Varajao, Albert Varajao, Frank Fiorilli,
    2141894 Ontario Inc. and 1655608 Ontario Limited

Defendants (Respondents)

John J. Adair, for the plaintiffs (appellants)

Scott Rosen, for the defendants (respondents) Varajao
    and 2141894 Ontario Inc.

Heard and released orally:  November 21, 2013

On appeal from the judgment of Justice T.R. Lofchik of
    the Superior Court of Justice, dated September 14, 2012.

ENDORSEMENT

[1]

The appellants argue that the trial judge failed to consider relevant
    evidence and erred in his reasoning.  We do not agree.

[2]

We are not satisfied that Mr. Fiorillis evidence directly contradicted
    the evidence of Mr. Varajao that the trial judge relied on.  It was open to the
    trial judge to accept the direct and unequivocal evidence of Mr. Varajao.

[3]

The appellants argue that the trial judge also erred because he
    improperly treated the house lease as operative despite the provision in it
    that it was void if the barn lease was not valid.  The trial judges failure to
    refer to the provision referenced by the appellants is of no moment.  The
    respondent 214 claimed monetary damages under the principle of unjust
    enrichment.  The trial judge effectively considered the house lease for
    purposes of determining the quantum of the appellants unjust enrichment.

[4]

Nor do we accept that the trial judges finding with respect to the
    leases (namely that the appellants were not obliged to pay the respondents rent
    in respect of the barn because the barn was of no use to them and the
    respondents had no obligation to repair the barn) revealed an inconsistency in
    his reasoning.  The former finding negated the respondents claim of unjust
    enrichment with respect to the barn; the latter was a finding as to a lack of
    contractual obligation.

[5]

We accordingly dismiss this appeal.  The respondents 214 and Albert
    Varajao shall be entitled to costs in the agreed upon amount of $6,500,
    inclusive of disbursements and HST.

Alexandra
    Hoy A.C.J.O.

K. Feldman J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Hunter v. Richardson, 2013 ONCA 731

DATE: 20131223

DOCKET: C56974

Feldman, Epstein, and van Rensburg JJ.A.

BETWEEN

Shanice Clarke Hunter, Minor by her Litigation Guardian
    Ann Clarke, and Anne Clarke

Plaintiffs (Respondents)

and

Alan Keith Richardson and
W.
    Emerson Richardson

Defendants (Respondent)

and

Royal & Sunalliance
    Canada Group
and The Dominion of Canada General Insurance Company

Defendants (Appellant)

Derek Greenside, for the appellant Royal &
    Sunalliance Canada Group

Edward (Ted) A. Kalnins, for the respondents, Shanice
    Clarke Hunter, Minor by her Litigation Guardian Ann Clarke, and Anne Clarke

Stan J. Sokol, for the respondent, W. Emerson Richardson

Heard and released orally: November 21, 2013

On appeal from the order of Justice Frank of the Superior
    Court of Justice, dated April 4, 2013.

ENDORSEMENT

[1]

The court asked counsel, both by correspondence before this date and for
    submissions in court, about this courts jurisdiction to hear this appeal, and
    in particular, whether the order appealed from is final or interlocutory. The
    appellant submits that the order adding it as a party is final for two reasons:
    1) because the
Insurance Act
requires mediation as a precondition to
    commencing a Court action for SABS, and 2) because the
Insurance Ac
t also
    requires arbitration of the issue of responsibility for SABS as between
    insurers.

[2]

In our view, the order adding Royal & Sun Alliance Canada Group as a
    party is interlocutory. It has the same effect in this case as does an order
    adding a party in any other case.

[3]

The order would only be final if the reasons specifically determined the
    above questions of law, allowed the party to be added on that basis, and the order
    specifically so provided. That did not occur here. Therefore the addition of
    the party does not preclude or foreclose any right to plead the statutory
    requirements and to raise the issue at trial or before.

[4]

As there has been no such final determination in this case, the order is
    interlocutory and any appeal from it lies to the Divisional Court with leave.

[5]

The appeal to this court is therefore quashed with costs payable by the appellant
    to the Fund in the amount of $5,500.00, and to the plaintiff in the amount of
    $2,000.00, all inclusive of disbursements and HST.

K. Feldman J.A.

G. Epstein J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kovachis v. Kovachis, 2013 ONCA 748

DATE: 20131212

DOCKET: C56403

Laskin, Gillese and Pepall JJ.A.

BETWEEN

Tommy Kovachis

Applicant (Appellant)

and

Carole
    Bertrand Kovachis
, Carlo DAmato

and Bill
    Lee

Respondent (Respondent in Appeal)

Gary S. Joseph and Elissa H. Gamus, counsel for the
    appellant

Julie Stanchieri, counsel for the respondent Carole
    Bertrand Kovachis

Heard:  May 24, 2013

On appeal from the final order of Justice A. Donald K.
    MacKenzie of the Superior Court of Justice, dated December 4, 2012 at Brampton,
    Ontario.

COSTS ENDORSEMENT

[1]

The appellant is entitled to his costs of the appeal on a partial
    indemnity basis.  We fix those costs at $12,000, inclusive of disbursements and
    applicable taxes.  This is a fair and reasonable figure in the light of the
    issue on the appeal.

John
    Laskin J.A.

E.E.
    Gillese J.A.

S.E.
    Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Le Feuvre (Re), 2013 ONCA 743

DATE: 20131209

DOCKET: C57596

Rosenberg, Rouleau and Pardu JJ.A.

IN THE MATTER OF:  GEOFFREY LE FEUVRE

AN APPEAL UNDER PART XX.1 OF THE
CODE

Geoffrey Le Feuvre, appearing in person

Anita Szigeti,
amicus curiae

Matthew Asma, for the respondent, Her Majesty the Queen

Michele Warner, for the Centre for Addiction and Mental
    Health

Heard: November 29, 2013

On appeal against the disposition of the Ontario Review
    Board dated, February 7, 2013.

APPEAL BOOK ENDORSEMENT

[1]

In his submissions, the appellant asks that the court allow the appeal
    and substitute an absolute discharge.

[2]

We do not agree. The evidence at the hearing demonstrates that the
    appellant remains a significant threat to the safety of the public.

[3]

Amicus
submits that in the alternative, the evidence shows that
    the appellant should be allowed to live in the community and moreover there is
    a treatment impasse and the Board should have required an independent
    assessment.

[4]

In our view, there is no impasse at this point. The evidence before the
    Board was that the diagnosis had been clarified and the treatment team was continuing
    to try different approaches.

[5]

The fresh evidence introduced by the appellant shows that there is
    reason to believe that the appellant may be making progress towards more access
    to the community. The disposition by the Board was reasonable.

[6]

Accordingly, the appeal is dismissed.