The appellants, a provincial energy regulator and an orphan well association, appealed from a decision holding that provincial oil and gas licensing obligations could not be enforced against a trustee in bankruptcy because they conflicted with the federal Bankruptcy and Insolvency Act.
The majority of the Supreme Court allowed the appeal, holding that the regulator's use of its statutory powers to enforce end-of-life abandonment and reclamation obligations did not create an operational conflict or frustration of purpose with the BIA.
The majority found that s. 14.06(4) of the BIA shields trustees only from personal liability, not the liability of the bankrupt estate, and that a bona fide public regulator enforcing public duties is not a creditor asserting a claim provable in bankruptcy.
Moldaver and Côté JJ. dissented, finding a genuine operational conflict and frustration of purpose under both branches of the paramountcy test, and that the Abitibi three-part test for provable claims was satisfied.
