Constitutional Question, Bankruptcy & RTA Termination

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Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved: 2024-11-12
CLNP Page ID: 2438
Page Categories: [Constitutional Law], [Bankruptcy], [Bankruptcy & Consumer Proposals (BIA)], [Payment of Rent (LTB)]
Citation: Constitutional Question, Bankruptcy & RTA Termination, CLNP 2438, <https://rvt.link/dx>, retrieved on 2024-11-12
Editor: Sharvey
Last Updated: 2024/11/05

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Courts of Justice Act, R.S.O. 1990, c. C.43[1]

109 (1) Notice of a constitutional question shall be served on the Attorney General of Canada and the Attorney General of Ontario in the following circumstances:

1. The constitutional validity or constitutional applicability of an Act of the Parliament of Canada or the Legislature, of a regulation or by-law made under such an Act or of a rule of common law is in question.
2. A remedy is claimed under subsection 24 (1) of the Canadian Charter of Rights and Freedoms in relation to an act or omission of the Government of Canada or the Government of Ontario.
(2) If a party fails to give notice in accordance with this section, the Act, regulation, by-law or rule of common law shall not be adjudged to be invalid or inapplicable, or the remedy shall not be granted, as the case may be.
(2.1) The notice shall be in the form provided for by the rules of court or, in the case of a proceeding before a board or tribunal, in a substantially similar form.
(2.2) The notice shall be served as soon as the circumstances requiring it become known and, in any event, at least fifteen days before the day on which the question is to be argued, unless the court orders otherwise. 1994, c. 12, s. 42 (1).
(3) Where the Attorney General of Canada and the Attorney General of Ontario are entitled to notice under subsection (1), they are entitled to notice of any appeal in respect of the constitutional question.
(4) Where the Attorney General of Canada or the Attorney General of Ontario is entitled to notice under this section, he or she is entitled to adduce evidence and make submissions to the court in respect of the constitutional question.
(5) Where the Attorney General of Canada or the Attorney General of Ontario makes submissions under subsection (4), he or she shall be deemed to be a party to the proceeding for the purpose of any appeal in respect of the constitutional question. R.S.O. 1990, c. C.43, s. 109 (3-5).
(6) This section applies to proceedings before boards and tribunals as well as to court proceedings. 1994, c. 12, s. 42 (2).


[1]

CONSTITUTION ACT, 1867[2]

91 It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,

...
21. Bankruptcy and Insolvency.

...

92 In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,

...
13. Property and Civil Rights in the Province.
...
16. Generally all Matters of a merely local or private Nature in the Province.

...

PART I
Canadian Charter of Rights and Freedoms

1 The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

...

7 Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.

...

15 (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

...

24 (1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

...

PART VII
General
Primacy of Constitution of Canada

52 (1) The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.

(2) The Constitution of Canada includes
(a) the Canada Act 1982, including this Act;
(b) the Acts and orders referred to in the schedule; and
(c) any amendment to any Act or order referred to in paragraph (a) or (b).


[2]

Residential Tenancies Act, 2006, S.O. 2006, c. 17

3 (1) This Act, except Part V.1, applies with respect to rental units in residential complexes, despite any other Act and despite any agreement or waiver to the contrary. 2013, c. 3, s. 22 (1).

...
(4) If a provision of this Act conflicts with a provision of another Act, other than the Human Rights Code, the provision of this Act applies. 2006, c. 17, s. 3 (4).


69 (1) A landlord may apply to the Board for an order terminating a tenancy and evicting the tenant if the landlord has given notice to terminate the tenancy under this Act or the Tenant Protection Act, 1997. 2006, c. 17, s. 69 (1).

...

71 Subject to section 70 and subsection 74 (1), a landlord who has served a notice of termination may apply immediately to the Board under section 69 for an order terminating the tenancy and evicting the tenant. 2006, c. 17, s. 71.

...

74 (1) A landlord may not apply to the Board under section 69 for an order terminating a tenancy and evicting the tenant based on a notice of termination under section 59 before the day following the termination date specified in the notice. 2006, c. 17, s. 74 (1).

...
(3) An order of the Board terminating a tenancy and evicting the tenant in an application under section 69 based on a notice of trmination under section 59 shall,
(a) specify the following amounts:
(i) the amount of rent that is in arrears under the tenancy agreement,
(ii) the daily amount of compensation that must be paid under section 86, and
(iii) any costs ordered by the Board;
(b) inform the tenant and the landlord that the order will become void if, before the order becomes enforceable, the tenant pays to the landlord or to the Board the amount required under subsection (4) and specify that amount; and
(c) if the tenant has previously made a motion under subsection (11) during the period of the tenant’s tenancy agreement with the landlord, inform the tenant and the landlord that the tenant is not entitled to make another motion under that subsection during the period of the agreement. 2006, c. 17, s. 74 (3).
(4) An eviction order referred to in subsection (3) is void if the tenant pays to the landlord or to the Board, before the order becomes enforceable,
(a) the amount of rent that is in arrears under the tenancy agreement;
(b) the amount of additional rent that would have been due under the tenancy agreement as at the date of payment by the tenant had notice of termination not been given;
(c) the amount of NSF cheque charges charged by financial institutions to the landlord in respect of cheques tendered to the landlord by or on behalf of the tenant, as allowed by the Board in an application by the landlord under section 87;
(d) the amount of administration charges payable by the tenant for the NSF cheques, as allowed by the Board in an application by the landlord under section 87; and
(e) the costs ordered by the Board. 2006, c. 17, s. 74 (4).
(5) If, before the eviction order becomes enforceable, the tenant pays the amount specified in the order under clause (3) (b) to the Board, an employee in the Board shall issue a notice to the tenant and the landlord acknowledging that the eviction order is void under subsection (4). 2006, c. 17, s. 74 (5); 2013, c. 3, s. 27 (1).
...
(11) A tenant may make a motion to the Board, on notice to the landlord, to set aside an eviction order referred to in subsection (3) if, after the order becomes enforceable but before it is executed, the tenant pays an amount to the landlord or to the Board and files an affidavit sworn by the tenant stating that the amount, together with any amounts previously paid to the landlord or to the Board, is at least the sum of the following amounts:
1. The amount of rent that is in arrears under the tenancy agreement.
2. The amount of additional rent that would have been due under the tenancy agreement as at the date of payment by the tenant had notice of termination not been given.
3. The amount of NSF cheque charges charged by financial institutions to the landlord in respect of cheques tendered to the landlord by or on behalf of the tenant, as allowed by the Board in an application by the landlord under section 87.
4. The amount of administration charges payable by the tenant for the NSF cheques, as allowed by the Board in an application by the landlord under section 87.
5. The costs ordered by the Board. 2006, c. 17, s. 74 (11); 2009, c. 33, Sched. 21, s. 11 (1).
(11.1) The Board shall refuse to accept for filing a motion under subsection (11), if the tenant has not complied with all the requirements of that subsection. 2017, c. 13, s. 15 (1).

...

85 An order evicting a person shall have the same effect, and shall be enforced in the same manner, as a writ of possession. 2006,


[3]

R.R.O. 1990, Reg. 194: RULES OF CIVIL PROCEDURE[4]

60.10 (1) A writ of possession (Form 60C) may be issued only with leave of the court, obtained on motion without notice or at the time an order entitling a party to possession is made. R.R.O. 1990, Reg. 194, r. 60.10 (1).

(2) The court may grant leave to issue a writ of possession only where it is satisfied that all persons in actual possession of any part of the land have received sufficient notice of the proceeding in which the order was obtained to have enabled them to apply to the court for relief. R.R.O. 1990, Reg. 194, r. 60.10 (2).
(3) A writ of possession remains in force for one year from the date of the order authorizing its issue, and may, before its expiry, be renewed by order for a period of one year from each renewal. R.R.O. 1990, Reg. 194, r. 60.10 (3).

[4]

Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)[5]

69 (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person,

(a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy,
(b) no provision of a security agreement between the insolvent person and a secured creditor that provides, in substance, that on
(i) the insolvent person’s insolvency,
(ii) the default by the insolvent person of an obligation under the security agreement, or
(iii) the filing by the insolvent person of a notice of intention under section 50.4,
the insolvent person ceases to have such rights to use or deal with assets secured under the agreement as he would otherwise have, has any force or effect,
...

69.3 (1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.

...

84.2 (1) No person may terminate or amend — or claim an accelerated payment or forfeiture of the term under — any agreement, including a security agreement, with a bankrupt individual by reason only of the individual’s bankruptcy or insolvency.

(2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend, or claim an accelerated payment or forfeiture of the term under, the lease by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy.

...

136 (1) Subject to the rights of secured creditors, the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

...

...

146 Subject to priority of ranking as provided by section 136 and subject to subsection 73(4) and section 84.1, the rights of lessors are to be determined according to the law of the province in which the leased premises are situated.

...

178 (1) An order of discharge does not release the bankrupt from

(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
...
(2) Subject to subsection (1), an order of discharge releases the bankrupt from all claims provable in bankruptcy.

...

176 (1) Where an order is granted on terms or conditions or on the bankrupt consenting to judgment, the bankrupt shall, until the terms, conditions or judgment is satisfied,

(a) give the trustee such information as he may require with respect to his earnings and after-acquired property and income, and
(b) not less than once a year, file in the court and with the trustee a statement verified under oath showing the particulars of any property or income he may have acquired subsequent to the order for his discharge, and the trustee or any creditor may require the bankrupt to attend for examination under oath with respect to the facts contained in the statement or with respect to his earnings, income, after-acquired property or dealings.
(2) Where the bankrupt fails to give information or to file a statement as required by subsection (1), to attend for examination when required to do so or to answer all questions fully and accurately with respect to his earnings, income, after-acquired property or dealings, the court may on the application of the trustee or of any creditor revoke the order of discharge.
(3) Where a conditional order of discharge of a bankrupt is made providing for payment of a further dividend or sum of money by the bankrupt, all payments on account thereof shall be made to the trustee for distribution to the creditors.

[5]

407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52 (CanLII), [2015] 3 SCR 397[6]

IV. Issue

[15] The Chief Justice formulated the following constitutional question:

Is s. 22(4) of the Highway 407 Act, 1998, S.O. 1998, c. 28, constitutionally inoperative under the doctrine of federal legislative paramountcy, having regard to the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3?

...

[21] I consequently agree with the Court of Appeal that the purpose and the effect of s. 22(4) of the 407 Act are to allow a creditor, ETR, to enforce the collection of toll debts, which in the context of this appeal constitutes a claim provable in bankruptcy. The remaining issue is whether this enforcement scheme conflicts with s. 178(2) of the BIA.

...

[24] In my view, the respondent is correct on this issue of operational conflict. Pursuant to s. 178(2) of the BIA, creditors cease to be able to enforce their provable claims upon the bankrupt’s discharge: Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605, at para. 21.[7] As I indicate in the companion appeal, it is undisputed that a discharge under s. 178 of the BIA releases a debtor, thus preventing creditors from enforcing claims that are provable in bankruptcy. They are deemed to give up their right to enforce those claims. This includes both civil and administrative enforcement. In this case, ETR, the creditor, is faced with a clear prohibition under s. 178(2) of the BIA. It cannot enforce its provable claim, which has been released by an order of discharge. Since the debt collection mechanism put in place by s. 22(4) provides the creditor with an administrative enforcement scheme, it is impossible for ETR to use that remedy while also complying with s. 178(2): Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 72[8]; Husky Oil Operations Ltd. v. Minister of National Revenue, 1995 CanLII 69 (SCC), [1995] 3 S.C.R. 453, at para. 46.[9] Indeed, ETR’s toll debt is not listed as an exemption under s. 178(1), and the resulting financial liability of the debtor cannot survive his or her discharge. As a result, the 407 Act says “yes” to the enforcement of a provable claim, while s. 178(2) of the BIA says “no”, such that the operation of the provincial law makes it impossible to comply with the federal law.

[25] In other words, while the provincial scheme has the effect of maintaining the debtor’s liability beyond his or her discharge, the federal law expressly releases him or her from that same liability. Both laws cannot “apply concurrently” (Western Bank, at para. 72) or “operate side by side without conflict” (Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44, [2013] 3 S.C.R. 53, at para. 76); a debtor cannot be found liable under the provincial law after having been released from that same liability under the federal law: British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86, at para. 82; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp., 1999 CanLII 648 (SCC), [1999] 2 S.C.R. 961, at para. 41; Multiple Access Ltd. v. McCutcheon, 1982 CanLII 55 (SCC), [1982] 2 S.C.R. 161, at p. 191. I respectfully disagree with my colleague that this conflict is “indirect” or concerns something that is merely “implicitly” prohibited by s. 178(2) of the BIA (Moloney, para. 92), or that I am resorting to a broad interpretation of s. 178(2) in order to find that an operational conflict exists (para. 36). Under the federal law, the debt is not enforceable; under the provincial law, it is. The inconsistency is clear and definite. One law allows what the other precisely prohibits.

[26] In that regard, unlike my colleague, I do not believe that the language of s. 22(1) provides a possibility for there to be no operational conflict (para. 39). Once the Registrar is notified by ETR, as was the case on the facts on this appeal, s. 22(4) uses mandatory language (“shall”), such that the Registrar has no choice but to refuse to validate the debtor’s vehicle permits. From that point in time, the Registrar is left with no discretion to terminate the enforcement process after, for instance, the debtor’s discharge in bankruptcy. The Registrar is only required to reinstate the debtor’s permits once notified that the debt is paid: ss. 22(6) and 22(7). To suggest that dual compliance with both laws remains possible if ETR declines to pursue its remedy under s. 22 of the 407 Act would be to turn a blind eye to the factual reality of this case, on the basis of which it was argued. In addition, as I explain in the companion appeal, to suggest that an operational conflict can be avoided in circumstances in which the provincial law does not operate leads, with respect, to a circular reasoning that removes a key condition for consideration of either of the two branches of the paramountcy doctrine, that is, the existence of two valid laws that operate side by side. Nor, as in the companion appeal, is it in my view valid to suggest that, to negate the operational conflict that exists here, the debtor can renounce his right under the BIA by paying the released debt or by accepting the debt collection mechanism of the 407 Act and foregoing his right to a vehicle permit. If that were the case, the situation would no longer be one of a possibility of dual compliance with both laws. Rather, it would be one of “single” compliance with one of the laws, and renunciation of the operation of the other law by one of the actors involved. When the two laws operate side by side, ETR cannot comply with both at the same time, and the provincial law denies the debtor the benefit of the federal law.

[27] I therefore conclude that the operation of s. 22(4) to enforce a debt that was discharged in bankruptcy is in conflict with s. 178(2) of the BIA. Section 178 is a complete code in that it sets out which debts are released on the bankrupt’s discharge and which debts survive the bankruptcy. Through s. 22(4), the province creates a new class of exempt debts that is not listed in s. 178(1). This operational conflict offends the doctrine of federal paramountcy.

...

[33] In my view, s. 22(4) of the 407 Act is inoperative to the extent that it conflicts with s. 178(2) of the BIA. The provision cannot be used by ETR to enforce an otherwise discharged provable claim contrary to s. 178(2) of the BIA. In any event, the operation of s. 22(4) frustrates the financial rehabilitation purpose of s. 178(2). I would dismiss the appeal with costs and answer the constitutional question as follows:

Is s. 22(4) of the Highway 407 Act, 1998, S.O. 1998, c. 28, constitutionally inoperative under the doctrine of federal legislative paramountcy, having regard to the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3?
Answer: Yes, to the extent that it is used to enforce a provable claim that has been discharged pursuant to s. 178(2) of the BIA.


[6] [7] [8] [9]

Highway 407 Act, 1998, S.O. 1998, c. 28[10]

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 may,

(a) charge an enforcement fee; and
(b) notify the Registrar of Motor Vehicles of the failure to pay. 2019, c. 14, Sched. 16, s. 5 (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. 1998, c. 28, s. 22 (4).

[10]

Alberta (Attorney General) v. Moloney, 2015 SCC 51 (CanLII), [2015] 3 SCR 327[11]

[1] In Canada, the federal and provincial levels of government must enact laws within the limits of their respective spheres of jurisdiction. The Constitution Act, 1867 defines which matters fall within the exclusive legislative authority of each level. Still, even when acting within its own sphere, one level of government will sometimes affect matters within the other’s sphere of jurisdiction. The resulting legislative overlap may, on occasion, lead to a conflict between otherwise valid federal and provincial laws. In this appeal, the Court must decide whether such a conflict exists, and if so, resolve it.

[2] The alleged conflict in this case concerns, on the one hand, the federal Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), and on the other hand, Alberta’s Traffic Safety Act, R.S.A. 2000, c. T-6 (“TSA”). It stems from a car accident caused by the respondent while he was uninsured, contrary to s. 54 of the TSA. The province of Alberta compensated the individual injured in the accident and sought to recover the amount of the compensation from the respondent. The latter, however, made an assignment in bankruptcy and was eventually discharged. The BIA governs bankruptcy and provides that, upon discharge, the respondent is released from all debts that are claims provable in bankruptcy. The TSA governs the activity of driving, including vehicle permits and driver’s licences, and allows the province to suspend the respondent’s licence and permits until he pays the amount of the compensation.

...

[18] A conflict is said to arise in one of two situations, which form the two branches of the paramountcy test: (1) there is an operational conflict because it is impossible to comply with both laws, or (2) although it is possible to comply with both laws, the operation of the provincial law frustrates the purpose of the federal enactment.

[19] What is considered to be the first branch of the test was described as follows in Multiple Access, the seminal decision of the Court on this issue:

In principle, there would seem to be no good reasons to speak of paramountcy and preclusion except where there is actual conflict in operation as 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. [Emphasis added; p. 191.]


[11]

Peel Housing Corporation v. Siewnarine, 2008 CanLII 31815 (ON SCDC)[12]

[2] The issue to be decided on this appeal is whether the Ontario Rental Housing Tribunal (“the Tribunal”) was correct in staying Peel Housing’s application to evict Ms. Siewnarine. The Tribunal concluded that Ms. Siewnarine’s breach of a mediated settlement, pursuant to the Tenant Protection Act, S.O. 1997, c.24 (“the Act”) was stayed by s. 69.3 of the Bankruptcy and Insolvency Act, R.S., c.B-3 (“BIA”). The Tribunal found further that Peel Housing’s request to re-open the original L2 Application (based on the tenant’s material representation of her income) was also stayed by the BIA. I find her conclusions to be errors in law.

...

[20] Forestwood Co-operative Homes Inc. v. Pritz, [2002] O.J. No. 550[13] is a decision of a panel of the Divisional Court which considered a different fact situation from the one before us. In that case, a landlord applied for both arrears of rent and for a writ of possession in the same “proceeding”. Indeed, before the Divisional Court, the landlord submitted it did not intend to pursue the arrears and that the claim for a writ of possession could and should be separated from the money judgment. The Divisional Court analyzed the relief sought by the landlord, both arrears and possession, and found them to have been brought in a “proceeding” that involved a claim provable in bankruptcy. The “proceeding” was therefore stayed. The Court found that to separate the request for a writ of possession from the money judgment for arrears was artificial and flew in the face of the wording of the section.

[21] In the matter before us, there is no such linking of a claim for arrears for rent and an application to evict the tenant. As noted above, the Form L4 makes this clear. Only one form of relief is sought in the landlord’s “proceeding”, that of eviction for failing to abide by the mediated settlement.

[22] Similarly, the request to re-open is a separate “proceeding” limited to seeking eviction for misrepresentation of income.

[23] Since the landlord’s application and request to re-open were based solely on the failure of the tenant to abide by the terms of the mediated settlement, the failure entitles the landlord to apply for and obtain an eviction order, should all the conditions of s. 77 be satisfied. Similarly, the failure entitles the landlord to request a re-opening of the original L2 Application. Contrary to the finding of the member, the fact situation before us is different from that in Forestwood Co-operative Homes.


[12] [13]

Forestwood Co-operative Homes Inc. v. Pritz, [2002] O.J. No. 550[13]

19 The respondent acknowledges that the claim for arrears is one provable in bankruptcy and therefore governed by the Act. However, in this court the respondent states that it does not intend to pursue the arrears and that the claim for a writ of possession can and should be separated from the money judgment. The respondent submits that the appellants' possessory interest in the unit is based on membership in a co-operative and therefore is not an interest "provable in bankruptcy" as its value cannot be quantified. Accordingly, the claim is not stayed by virtue of s. 69.3(1) of the Act.

...

22 The respondent's primary argument as to why the claim for possession is not caught by the automatic stay in s. 69.3(1) of the Act involves a misconception of the nature of its claim and the way in which the section is intended to operate. In the proceeding in which Dunn J. gave his judgment, the respondent claimed arrears and a writ of possession based on an alleged default under the contractual relationship between the parties.

23. It is beyond dispute that the claim for arrears is provable in bankruptcy. To separate the request for a writ of possession from the money judgment for arrears is artificial and flies in the face of the wording of the section. Specifically, the section dictates that the "proceeding" that involves a claim provable in bankruptcy is stayed. The proceeding in which the respondent was pursuing remedies against the appellants for breach of contract is subject to the automatic stay.

[13]

In the Matter of the Bankruptcy of Sylvie Marie Lafond (AKA Jane Lafond) of the City of Ottawa, in the Province of Ontario, 2023 ONSC 4065 (CanLII)[14]

[16] Section 69 if the BIA provides that, subject to certain exceptions, no creditor has any remedy against an insolvent person or her property, or shall continue the execution of any proceeding for the recovery of a claim provable in bankruptcy, until the trustee has been discharged or the insolvent person becomes bankrupt.

[17] Section 121(1) of the BIA defines a claim provable in bankruptcy as encompassing all present or future debts and liabilities that the bankrupt is subject to on the day of bankruptcy or may become subject to before discharge due to obligations incurred before that day. [3]

[18] While I acknowledge the family circumstances affecting Ms. Lafond, the eviction aspect of the LTB’s order cannot be classified as a “debt or liability”; it is an order requiring the vacation of a property.

[19] The purpose of the BIA's stay provisions is to prevent actions by creditors that might grant them an advantage over other creditors. [4] In this case, the landlords are seeking enforcement of a valid order for the possession of their own property. There is no possibility that allowing them to enforce this aspect of the LTB’s order would confer on them an advantage over any of Ms. Lafond's other creditors.

[20] If I am wrong about the eviction order not being subject to a stay, I would exercise my discretion and lift the stay under section 69.4 of the BIA.

[21] To lift the stay, the Court must be satisfied that the creditor would be materially prejudiced by the continuation of the stay, or that it is equitable on other grounds to lift the stay. Material prejudice may be established if the claims against the bankrupt are debts that would not be discharged. [5] Here, lifting the stay would not affect the assets available to Ms. Lafond’s creditors for distribution.

[22] The landlords had initially agreed to rent the unit to Ms. Lafond for a duration of 8 months in 2021. She has occupied the unit and owes them approximately $30,000 in rent. The landlords have been covering the unit's expenses (mortgage, water, hot water tank, etc.) without receiving rent from Ms. Lafond. Given these circumstances, if the stay were to apply to the eviction aspect of the LTB’s Order, I conclude that it would just and equitable to lift the stay.


[14]

Retrieved

  1. 1.0 1.1 Courts of Justice Act, R.S.O. 1990, c. C.43, <https://www.ontario.ca/laws/statute/90c43#BK151>, retrieved on 2024-11-04
  2. 2.0 2.1 CONSTITUTION ACT, 1867, <https://laws-lois.justice.gc.ca/eng/const/FullText.html>, retrieved on 2024-11-04
  3. Residential Tenancies Act, 2006, S.O. 2006, c. 17, <https://www.ontario.ca/laws/statute/06r17>, retrieved on 2024-11-04
  4. 4.0 4.1 R.R.O. 1990, Reg. 194: RULES OF CIVIL PROCEDURE, <https://www.ontario.ca/laws/regulation/900194#BK590>, retrieved 2022-04-05
  5. 5.0 5.1 Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3), <https://laws-lois.justice.gc.ca/eng/acts/B-3/FullText.html>, retrieved 2022-04-05
  6. 6.0 6.1 407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52 (CanLII), [2015] 3 SCR 397, <https://canlii.ca/t/gm22n>, retrieved on 2024-11-04
  7. 7.0 7.1 Schreyer v. Schreyer, 2011 SCC 35 (CanLII), [2011] 2 SCR 605, <https://canlii.ca/t/fm8zd>, retrieved on 2024-11-04
  8. 8.0 8.1 Canadian Western Bank v. Alberta, 2007 SCC 22 (CanLII), [2007] 2 SCR 3, <https://canlii.ca/t/1rmr1>, retrieved on 2024-11-04
  9. 9.0 9.1 Husky Oil Operations Ltd. v. Minister of National Revenue, 1995 CanLII 69 (SCC), [1995] 3 SCR 453, <https://canlii.ca/t/1frhc>, retrieved on 2024-11-04
  10. 10.0 10.1 Highway 407 Act, 1998, S.O. 1998, c. 28, <https://www.ontario.ca/laws/statute/98h28>, retrieved 2024-11-04
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