Drivers fight 407 ETR’s right to collect toll debts after bankruptcy

Grant Lewry declared bankruptcy and wiped his debts clean, but he can't get his licence plates renewed until he pays the 407.

Kate Allen/Toronto Star

 

Five years ago, Grant Lewry declared bankruptcy. Like any other discharged bankrupt, his assets were distributed equitably to his creditors, and his debts erased so he could start clean.
But until Lewry pays thousands to 407 ETR, the private company that maintains the 407 toll highway, the Transportation Ministry won’t renew his licence plates.
“They still say today I owe $20,000,” says the Mississauga car dealership manager. “The debt should have been wiped out.”
Lewry was at Osgoode Hall Wednesday to hear proceedings related to the case of another Ontario man who fought 407 ETR when it denied his plates post-bankruptcy. So was David Thompson, a lawyer seeking to certify a class-action lawsuit on behalf three bankrupt individuals subject to the same plate denials.
“We say it’s wrong,” Thompson said, because bankruptcy is intended to give debtors a fresh start. And unlike other creditors, which must accept partial payouts, 407 ETR has a “vehicle permit denial remedy that they’re allowed to use to extract the (full) debt from the bankrupt even post-discharge.”
According to Thompson, the Office of the Superintendent of Bankruptcy Canada indicates 7,000 insolvent Ontarians listed 407 ETR as a creditor in recent years.
Kevin Sack, 407 ETR’s vice president of communications, said his company differs from other creditors because it maintains an open-access highway and has no means of denying use — in other words, refusing credit.
Sack noted a judge sided with the 407 in the lower-court decision that brought Thompson and Lewry to Osgoode Hall Wednesday.
Last year, Matthew David Moore argued in Superior Court that 407 ETR should not be able to refuse to validate his vehicle permits. He had accrued $35,000 in unpaid toll charges before he declared bankruptcy.
Moore’s lawyer, Mark Ross, argued that a discharge from bankruptcy is enshrined in federal law, and should supersede the provincial act allowing 407 ETR to deny plates. He also argued that the ability to drive is a right.
Justice Francis Newbould disagreed. “A motor vehicle licence is not an asset belonging to a debtor or anyone else. It is a privilege granted by a government authority and is not affected by bankruptcy,” the judge wrote in his decision. Some debts do survive bankruptcy, such as alimony.
Moore settled with 407 ETR, but the superintendent of bankruptcy, which was not involved in the lower-court case, is seeking leave to appeal the decision. Lawyers for the superintendent and 407 ETR argued their cases Wednesday.
The justices reserved their decision. 407 ETR also said it will fight the proposed application to certify the separate class-action lawsuit.