407 ETR being sued

May 3, 2012 - All News

Two Georgina residents are suing the 407 ETR for $25 million over, what they say, are unfair collection practices.
Peter Teolis of Pefferlaw is listed, along with a Keswick resident and another from Georgetown, as plaintiffs on a statement of claim issued April 27 in the Ontario Superior Court in Toronto.
The class action suit claims the 407 unfairly uses its licence plate denial against people who have been forced into bankruptcy.
David Thompson and Matthew G. Moloci of Hamilton law firm Scarfone Hawkins LLP are representing the plaintiffs on behalf of people who declared bankruptcy and owed outstanding tolls and fees at the time to 407 ETR.
The claim, which is yet to be proven in court, alleges the company “unlawfully uses its vehicle permit renewal denial remedy to coerce payment”, which “violates” the Bankruptcy and Insolvency Act (BIA).
When a 407 ETR account is not in good standing, the unpaid balance on the account is subject to interest charges.
If an account is unpaid for more than 35 days, a customer may receive a notice that the account may be subject to “plate denial” and other fees.
Plate denial means that renewal of the sticker for the plate will be denied by the Ontario Ministry of Transportation until payment is made. If the account continues to be outstanding for another 90
days, the customer may receive a notice that the account is in plate denial, at which point no sticker renewal can be obtained.
At issue is an alleged threat of denying licence plate renewal to obtain payment ahead of other creditors in a bankruptcy.
The suit contends “the legislature did not intend to provide 407 ETR with a collection remedy that survived bankruptcy and/or was not affected by the (bankruptcy act)”.
For Mr. Teolis, the suit filed last Friday is the end result of what he says has been an emotionally and frustrating experience stemming back from a 407 bill incurred almost a decade ago.
The debt continues to increase in the amount owing despite the fact he filed a consumer proposal to his creditors in 2009.
“It is completely ridiculous,” he said in an interview Tuesday.
“They shouldn’t be allowed to stop me from driving on other roads or get money through their power to deny plates or renewals.”
The 407 ETR website states the right to plate denial was endorsed in a unanimous decision of the Ontario Divisional Court on Nov. 7, 2005.
The site further states, “Given the express provisions of the 407 Act and the current jurisprudence, 407 ETR will continue to use plate denial for those customers that fail to pay their 407 charges, including bankrupts and individuals discharged from bankruptcy in accordance with the 407 Act”.
According to a statement released last Friday by the Hamilton law firm, the class proceeding represents not only “the preferable procedure for dealing with this issue, but the only available procedure presenting an opportunity for redress.”
The lawsuit also asks the court to order the 407 company to establish a $20-million trust fund to help reimburse class members who qualify.
— Metroland News Service