SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 09-CV-402495
MOTION HEARD: March 16 and May 29, 2012

RE: Minister of Finance

v.

Sandra Clarke and Superintendent of Insurance for the
Province of Ontario

BEFORE: Master Thomas Hawkins

COUNSEL:
Sarah Horowitz
for moving plaintiff
Fax No.: 416-590-7556

Sandra Clarke
responding defendant in person
423 Drew Street
Oshawa, Ontario L1H 8W6

No one for defendant Superintendent of Insurance for the
Province of Ontario

REASONS FOR DECISION

[ 1 ] This is a motion by the plaintiff (the “Minister”) for an order granting leave to issue a writ of seizure and sale against the defendant Sandra Clarke. The Minister moves under subrule 60.07(2).

[ 2 ] Subrule 60.07(2) provides as follows.

If six years or more have elapsed since the date of the order, or if its enforcement is subject to a condition, writ of seizure and sale shall not be issued unless leave of the court is first obtained.

[ 3 ] Ms. Clarke opposes the motion.

[ 4 ] It appears on the evidence before me that on March 1, 1995 one Debbie Biggart obtained judgment against Ms. Clarke for $55,000 plus costs as a result of a motor vehicle accident. Ms. Clarke was driving an uninsured motor vehicle at the time of the accident. Ms. Biggart was then a passenger in Ms. Clarke’s motor vehicle.

[ 5 ] Ms. Biggart brought an action against Ms. Clarke and obtained a consent judgment against Ms. Clarke.

[ 6 ] By order made December 18, 994 the action was dismissed without costs as against the defendant the Superintendent of Insurance for the Province of Ontario.

[ 7 ] Ms. Biggart made application for payment of her judgment to the Motor Vehicle Accident Claims Fund (the “Fund”) under the provisions of the Motor Vehicle Accident Claims Act R.S.O. 1990 c. M-41 (the “Act”). Her application was accepted and on January 30, 1995 she assigned her judgment to the Minister under the provisions of the Act.

[ 8 ] The Minister administers the Fund.

[ 9 ] Since January 30, 1995 Ms. Clarke has been making periodic payments to the Minister in partial satisfaction of the judgment in question, but has not fully repaid the judgment.

[ 10 ] The Minister had a writ of seizure and sale issued in respect of the judgment. That writ expired on October 7, 2001 and through error was not renewed.

[ 11 ] The Minister now seeks leave to issue a new writ of seizure and sale in respect of its judgment against Ms. Clarke.

[ 12 ] Ms. Clarke made a consumer proposal dated August 19, 2009 under the provisions of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 , as amended (the “BIA”).

[ 13 ] Ms. Clarke listed the Fund as an unsecured creditor in the statement of affairs forming part of her consumer proposal.

[ 14 ] In her consumer proposal Ms. Clarke proposed to made monthly payments of $400 to the administrator under her consumer proposal for 60 consecutive months. That period of time has not yet expired.

[ 15 ] The Minister takes the position that the Act does not provide for the acceptance of consumer proposals from judgment debtors to satisfy debts owing to the Fund. For that reason a Fund staff member wrote to the Administrator advising that the Fund would not be accepting Ms. Clark’s consumer proposal. It appears that the Fund may have attempted to dissent from Ms. Clarke’s consumer proposal but this is not clear. The Fund staff member sent a signed voting letter to the administrator but that voting letter is not in evidence before me.

[ 16 ] It does not appear that the Minister ever attempted to file a proof of claim under Ms. Clarke’s consumer proposal. Under subsection 66.17(1) of the BIA only creditors who have proved a claim may assent to or dissent from a consumer proposal.

[ 17 ] In any event, Ms. Clarke’s consumer proposal was accepted and Ms. Clarke began making monthly payments to the administrator.

[ 18 ] The Minister takes the position that because the Act says nothing about consumer proposals the Minister may continue attempting to collect its judgment against Ms. Clarke, holding over her the threat of seizing and selling her home and other assets and the threat of suspending her driver’s license should she fail to pay that judgment, ignoring the fact that Ms. Clarke made a consumer proposal which was accepted.

[ 19 ] The position taken by the Minister is wrong in law.

[ 20 ] Section 4.1 of the BIA provides as follows.

This Act is binding on Her Majesty in right of Canada or a province.

[ 21 ] The provisions of the BIA are therefore binding on the Minister.

[ 22 ] Subsection 69.2(1) of the BIA provides as follows.

Subject to subsection (2) to (4) and sections 69.4 and 69.5, on the filing of a consumer proposal under subsection 66.13(2) or of an amendment to a consumer proposal under subsection 66.37(1) in respect of a consumer 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 until

(a) the consumer proposal or the amended consumer proposal, as the case may be, has been withdrawn, refused, annulled or deemed annulled; or

(b) the administrator has been discharged.

[ 23 ] The exceptions listed at the beginning of this subsection do not apply to Ms. Clarke’s consumer proposal.

[ 24 ] The judgment which the Minister holds against Ms. Clarke is a claim provable in bankruptcy.

[ 25 ] Subsection 69.2(1) of the BIA has the following effect relevant to Ms. Clarke. Once Ms. Clarke filed her consumer proposal with the administrator on August 19, 2009 the Minister as a creditor had no remedy against Ms. Clarke as a debtor under the judgment, such as the remedy of suspending her driver’s license for non-payment of the judgment. Further, once Ms. Clarke filed her consumer proposal the Minister was and is barred from commencing or continuing to execute its judgment against Ms. Clarke, including the filing of a writ of seizure and sale against her.

[ 26 ] If the position taken by the Minister were correct, that position would defeat one of the main purposes of the BIA , namely the rehabilitation of debtors. That position is not correct.

[ 27 ] For all these reasons, leave to issue a writ of seizure and sale against Ms. Clarke is denied.

[ 28 ] Ms. Clarke has been successful on this motion but does not seek costs against the Minister. The Minister has not been successful. There will therefore be no order as to costs of this motion.

Master Thomas Hawkins

DATE: July 26, 2012