Canada (Attorney General) v. Caisse Populaire d'Amos, 2002 FCT 1070

Date: 20021011

Docket: T-1422-00

Neutral citation: 2002 FCT 1070

OTTAWA, ONTARIO, OCTOBER 11, 2002

BEFORE: LUC MARTINEAU J.

BETWEEN:

THE ATTORNEY GENERAL OF CANADA

for and on behalf of Her Majesty the Queen in right of Canada

(Minister of National Revenue)

Plaintiff

- and -

CAISSE POPULAIRE D'AMOS

Defendant

REASONS FOR ORDER AND ORDER

            WHEREAS by a simplified action the plaintiff is claiming from the defendant the sum of $35,977.46 on account of source deductions withheld but not paid to Her Majesty by the Coopérative de travailleurs sylvicoles de l'Abitibi (the debtor);

WHEREAS this claim is disputed by the defendant;

            WHEREAS the case at bar was heard with the action brought by the plaintiff against the Caisse Populaire Desjardins de Lebel-sur-Quevillon in Court file T-1423-00;

            IN VIEW OF the admissions, affidavits and exhibits entered in the record, the authorities cited by the parties and the arguments contained in the memorandums and made at the hearing held in Montréal on June 11, 2002, in files T-1422-00 and T-1423-00;

FACTS

            WHEREAS the facts that follow were not in dispute;

            WHEREAS according to the plaintiff's submissions the debtor failed to remit to Her Majesty:

            (a)        the sum of $28,317.81 which it withheld from the remuneration paid to its employees under the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 (the ITA) for the period from March 1 to December 31, 1998; and

            (b)        the sum of $7,659.65 which it withheld from the remuneration paid to its employees as employee premiums payable by its employees under the Employment Insurance Act, S.C. 1996, c. 23 (the EIA) for the period from April 1 to December 31, 1998;

            WHEREAS the source deductions mentioned above represent a total of $35,977.46;

            WHEREAS the plaintiff is now claiming the sum of $35,977.46 from the defendant following the bulk sale by court order and mutual agreement of certain movable property owned by the debtor and hypothecated to the defendant, which was purchased by the Coopérative Forestière de St-Dominique (the Coopérative Forestière) in the circumstances mentioned below;

            WHEREAS the defendant was the debtor's hypothecary creditor;

            WHEREAS the defendant's hypothecary right was prior to Her Majesty's beneficial ownership;

            WHEREAS pursuant to a motion for forced surrender and judicial sale by the defendant in accordance with articles 795 et seq. of the Code of Civil Procedure, R.S.Q. c. C-25 ("C.C.P."), a judgment ordering the forced surrender and bulk sale by judicial order of the debtor's movable property and authorizing its sale by mutual agreement to the Coopérative Forestière for the sum of $145,000.00 was rendered by the Quebec Superior Court on November 9, 1998, in the defendant's favour in case 605-05-000421-987;

            WHEREAS the prior notice of exercise of the movable hypothecary right was published in the Register of Personal and Movable Real Rights ("RPMRR") on October 1, 1998;

            WHEREAS the plaintiff did not intervene in the Superior Court and made no objection to the forced surrender and judicial sale of the debtor's movable property;

            WHEREAS the said judgment directed that the proceeds of the sale, set at $145,000.00, be distributed between the creditors depending on their rank, allowing in addition to legal costs, for the following debts:

            (a)        the Quebec Department of Revenue (the Department) for its priority debt in the amount of $85,507.77;

            (b)        the Société d'aide au développement des collectivités Harricana Inc. (the Société d'aide) under its hypothecary rights in the amount of $13,285.92, plus interest accrued since September 10, 1998; and

            (c)        the defendant under its hypothecary rights in the amount of $36,314.83, plus interest accrued since October 8, 1998;

            WHEREAS on December 30, 1998, in accordance with the said judgment, Johnny Coutu, the person designated in the judgment for the sale (the notary), prepared a deed of sale by mutual agreement in favour of the Coopérative Forestière;

            WHEREAS before proceeding with distribution of the proceeds of sale the notary had to obtain a certified statement of the rights recorded in the RPMRR against the debtor's property;

            WHEREAS the plaintiff's name was not entered in the certified statement from the registrar;

            WHEREAS following that sale the notary, within the deadlines specified in the C.C.P., prepared a scheme of collocation providing that the proceeds of sale in the amount of $145,000.00 would be distributed as follows:

            (a)        the Department, for its priority debt in the amount of $85,507.77;

            (b)        the Société d'aide, under its hypothecary rights in the amount of $13,560.29;

            (c)        the defendant under its hypothecary rights in the amount of $37,387.85;

            (d)        costs to the notary of preparing the scheme, in the amount of $300.00;

            (e)        fees owed the notary, in the amount of $1,200.00; and

            (f)         fees owed counsel for the defendant in the amount of $3,155.00 and costs of sale, in accordance with their bill of costs, in the amount of $916.02;

            WHEREAS the plaintiff filed no claim or objection with the notary;

            WHEREAS following the expiry of the deadlines specified in the C.C.P., the notary proceeded to distribute the sum of $145,000.00 in the manner specified in the scheme of collocation;

            WHEREAS by letter of June 22, 2000, that is over 21 months after the exercise by the defendant of its hypothecary right, the plaintiff notified the defendant that the debtor owed Her Majesty source deductions totalling $35,977.46 and that amount was in fact covered by the deemed trust established by subsections 227(4) or (4.1) ITA and 86(2) or (2.1) EIA;

            WHEREAS by the same letter the plaintiff notified the defendant that it must forward in priority the sum of $35,977.46 from the proceeds of sale of any property whatever of the debtor, after deducting the costs of sale;

            WHEREAS, following the defendant's failure to comply with this notification, the plaintiff brought the instant personal action against the defendant;

FEDERAL PROVISIONS

            WHEREAS the burden of proving that this claim against the defendant is valid rests with the plaintiff;

            WHEREAS the plaintiff based her claim against the defendant on subsections 227(4) and (4.1) ITA and 86(2) and (2.1) EIA (the federal provisions);

            WHEREAS the federal provisions create a deemed trust;

            WHEREAS the federal provisions create certain legal presumptions;

            WHEREAS under subsections 227(4) ITA and 86(2) EIA, a tax debtor is deemed to hold any amount deducted or withheld under the ITA in trust for Her Majesty;

            WHEREAS under subsections 227(4.1) ITA and 86(2.1) EIA, Her Majesty enjoys beneficial ownership of any property covered by the deemed trust, and in that case the said property is deemed not to be part of the tax debtor's estate;

            WHEREAS subsections 227(4.1) ITA and 86(2.1) EIA cover, first, the tax debtor's property, and second, the property held by his secured creditor within the meaning of subsection 224(1.3) ITA, which, in the absence of security within the meaning of that subsection, would be property of that person;

            WHEREAS these presumptions apply once a tax debtor fails to remit to Her Majesty the amounts contemplated by subsections 227(4) ITA and 86(2) EIA within the deadlines specified in the ITA;

            WHEREAS these presumptions apply despite other provisions of the ITA, the BIA (except subsections 81.1 and 81.2 BIA), any other legislative or provincial provision or any rule of law;

            WHEREAS the primary purpose of these presumptions is to facilitate recovery proceedings brought on behalf of Her Majesty against a tax debtor and prevent objections which exercise of Her Majesty's beneficial right may prompt from other creditors of the tax debtor, in particular secured creditors within the meaning of subsection 224(1.3) ITA;

            WHEREAS under subsections 227(4.1) in fine ITA and 86(2.1) in fine EIA, the proceeds of realization of this property are paid to the Receiver General in priority;

            WHEREAS the federal provisions do not indicate the manner or specific procedure whereby Her Majesty may assert her beneficial ownership and priority claim;

            WHEREAS under section 222 ITA, all taxes, interest, penalties, costs and other amounts payable under the ITA are debts due to Her Majesty and recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by the ITA;

            WHEREAS the source deductions specified in section 153 ITA were exclusively to be made by the employer, here the debtor, the tax debtor;

            WHEREAS under subsection 223(3) ITA the Minister may cause to be registered in the Federal Court on behalf of Her Majesty a certificate stating that a tax debtor who has not made certain source deductions is indebted for the amount indicated in the said certificate;

            WHEREAS subsections 223(5) and (6) ITA also authorizes the registration on behalf of Her Majesty, in the province where the debtor's property is located, as a charge on the said property, in accordance with provincial law, of a document issued by the Federal Court evidencing the content of the certificate registered in the Federal Court pursuant to subsection 223(3) ITA;

            WHEREAS when execution proceedings are brought on behalf of Her Majesty against a tax debtor following registration of a certificate in the Federal Court pursuant to section 223 ITA, unless otherwise provided in the Rules, writs of seizure and sale are to be executed as nearly as possible in the manner determined by the law of the province in which the property to be seized is located, as provided in subsection 56(3) of the Federal Court Act, R.S.C. 1985, c. F-7 (the Act) and Rule 448 of the Rules;

            WHEREAS it was not alleged nor proven that recovery proceedings were brought by the plaintiff against the debtor under the ITA;

PROVINCIAL PROVISIONS

            WHEREAS since no specific procedure has been provided in the ITA or the EIA to assert the beneficial ownership enjoyed by Her Majesty under the federal provisions, the provincial rules of law apply in the alternative and by analogy, mutatis mutandis;

Beneficial ownership and trust

            WHEREAS the expression "beneficial ownership" contained in subsections 227(4.1) ITA and 86(2.1) EIA has not been defined by the federal legislator;

            WHEREAS the concept of "beneficial ownership" is a concept originating in the common law;

            WHEREAS in the province of Quebec it is the civil law in effect which governs matters of property and civil rights;

            WHEREAS the concept of "beneficial ownership" is unknown to Quebec civil law;

            IN VIEW OF articles 947 et seq. and 1260 et seq. C.C.Q.;

            WHEREAS under article 1261 C.C.Q. the trust patrimony, consisting of the property transferred in trust, constitutes a patrimony by appropriation, autonomous and distinct from that of the settlor, trustee or beneficiary and in which none of them has any real right;

            IN VIEW OF article 1263 C.C.Q., by analogy, and also article 1290 C.C.Q.;

Priorities and hypothecs

            WHEREAS under article 2644 C.C.Q., the property of a debtor is charged with the performance of his obligations and is the common pledge of his creditors;

            WHEREAS under article 2646 C.C.Q., creditors may institute judicial proceedings to cause the property of their debtor to be seized and sold;

            WHEREAS if creditors rank equally the price is distributed proportionately to their claims, unless some of them have a legal cause of preference;

            WHEREAS under article 2647 C.C.Q., prior claims and hypothecs are the legal causes of preference;

            WHEREAS under article 2650 C.C.Q., a claim to which the law attaches the right of the creditor to be preferred over the other creditors, even the hypothecary creditors, is a prior claim;

            WHEREAS under article 2651(4) C.C.Q., claims of the State for amounts due under fiscal laws are a prior claim;

            WHEREAS under article 2655 C.C.Q., prior claims may be set up against other creditors, or all third persons if they constitute a real right, without being published;

            WHEREAS, further, under article 2725 C.C.Q., legal hypothecs of the State, including those for sums due under fiscal laws, may be charged on movable or immovable property;

            WHEREAS such hypothecs take effect only from their registration in the proper register;

WHEREAS registration by the State of a legal movable hypothec for sums due under fiscal laws does not prevent it from exercising its prior claim;

            WHEREAS under article 2732 C.C.Q., a creditor who has registered his legal hypothec preserves his right to follow it on movable property which is not alienated in the ordinary course of business of an enterprise, as though he was the holder of a conventional hypothec;

Rights of hypothecary creditors

            WHEREAS in the province of Quebec, under the C.C.Q., a hypothecary creditor is not owner of the property covered by the security;

            WHEREAS the situation is different in other provinces, where property subject to fixed and specific common law charges confers a right of ownership on the secured creditor;

            WHEREAS under article 2748 C.C.Q., in addition to their personal right of action and the provisional measures provided in the C.C.P., hypothecary creditors, when their debtor is in default and their claim is liquid and eligible, may exercise any of the following hypothecary rights:

            (a)        taking possession of the charged property to administer it;

            (b)        taking it in payment of their claim;

            (c)        having it sold by judicial authority; or

            (d)        selling it themselves;

WHEREAS under articles 2757 et seq. C.C.Q., before exercising one of these hypothecary rights a creditor must file a prior notice with the RPMRR, indicating the hypothecary right he intends to exercise on expiry of the period allowed in the notice for remedying the default;

            WHEREAS under article 2758 C.C.Q., the following formalities must be observed:

                         In a prior notice of the exercise of a hypothecary right, any failure by the debtor to fulfil his obligations shall be indicated, together with a reminder, where necessary, that the debtor or a third person has a right to remedy the default. In addition, the amount of the claim in capital and interest, if any, and the nature of the hypothecary right which the creditor intends to exercise shall be included in the notice, together with a description of the charged property and a call on the person against whom the right is to be exercised to surrender the property before the expiry of the period specified in the notice.

                         This period is of twenty days after registration of the notice in the case of a movable property, sixty days in the case of an immovable property, or ten days if the creditor intends to take possession of the property; however, the period is of thirty days in the case of a notice relating to movable property charged with a hypothec constituted by an act accessory to a consumer contract;

            WHEREAS the plaintiff in the case at bar did not dispute that the said formalities were observed by the defendant;

Forced surrender and sale under judicial authority

            WHEREAS forced surrender and bulk sale of property by judicial authority pursuant to the obtaining of a judgment in the province of Quebec are governed by articles 2763 et seq. and 2791 et seq. C.C.Q., and also by articles 795 et seq. and 910 and 910.1 et seq. C.C.P.;

            WHEREAS under article 2765 C.C.Q. and article 797 C.C.P., the Court may order forced surrender by the debtor;

            WHEREAS under article 796 C.C.P., an application for forced surrender must be accompanied by a recent statement from the appropriate register, certified by the registrar;

WHEREAS in such cases the court judgment sets the deadline in which the surrender must be made, determines the manner and designates the person to whom it is made;

            WHEREAS, when the sale takes place under judicial authority, the Court designates the person who will make it, determines the conditions and charges of the sale, indicates whether it is by mutual agreement, by call for tenders or at auction and, if it sees fit, sets a price after investigating the value of the property;

            WHEREAS under article 2793 C.C.Q., the person entrusted with the sale of the property is bound to observe the rules prescribed in the C.C.P. for the sale of the property of another;

            WHEREAS the procedure for the sale of the property of another is determined in articles 897 et seq. C.C.P.;

            WHEREAS under articles 901 and 902 C.C.P., a sale by agreement is made on the conditions and terms fixed in the judgment authorizing it;

            WHEREAS under article 902 C.C.P., the proceeds of sale are distributed to persons who are entitled, in accordance with the instructions of the judge or clerk, if any;

            WHEREAS under article 910.1 C.C.P., the person designated by the Court to proceed with a sale prepares a scheme of collocation in accordance with articles 712 to 723 C.C.P.;

            WHEREAS under article 713 C.C.P., subject to article 578 C.C.P., the scheme of collocation is prepared by the person designated in accordance with the rights of the parties, as shown by the statement certified by the registrar and other documents in the record;

            WHEREAS by analogy, under article 715 C.C.P., after the law costs must be collocated according to their rank claims of those who had a real right but filed their objections late, as well as those of prior creditors and those who filed a statement of their claims, supported by an affidavit and vouchers, deducting debts which such claimants were bound to pay and which became payable in consequence of the sale;

            WHEREAS when a sale under judicial authority takes place at the initiative of a creditor other than Her Majesty, the effect of subsections 227(4.1) in fine ITA and 86(2.1) in fine EIA is to allow Her Majesty to be collocated in priority to the proceeds of realization of the sale;

            WHEREAS under article 910.1, the person designated must notify the proposed scheme to the debtor and creditors listed in the statement certified by the registrar;

            WHEREAS under article 910.2 C.C.P., the person designated may, on his own initiative or at the request of an interested person, correct the proposed scheme of collocation, upon determining that it contains an error;

            WHEREAS under article 910.2 C.C.P., any interested person may, by motion, object to the proposed scheme of collocation and ask the Court to determine to whom the proceeds of the sale should be distributed;

            WHEREAS under article 910.2 C.C.P., this remedy must be exercised within 15 days of the date of notification of the proposal;

            WHEREAS under article 910.3 C.C.P., if 30 days after notification of the proposed scheme of collocation there has been no objection, the person designated must distribute the proceeds of the sale as provided in the proposed scheme;

WHEREAS the provincial provisions are neither contrary to nor inconsistent with the federal provisions, and do not prevent Her Majesty from asserting her beneficial right and from relying on her preferred claim;

            WHEREAS the federal provisions do not exempt Her Majesty from the duty to assert her beneficial right and preferred claim at the proper time, within the deadlines and in the manner specified in the Act;

CROWN IN RIGHT OF CANADA BOUND BY CIVIL CODE OF QUEBEC

AND CODE OF CIVIL PROCEDURE

            IN VIEW OF the argument cited by counsel for the plaintiff, that Her Majesty is not bound by the provisions of the C.C.Q. and the C.C.P. which may apply in the case at bar;

            IN VIEW OF sections 1, 42 and 61 of the Interpretation Act (Quebec), R.S.Q., c. I-16;

            IN VIEW OF sections 2, 17 and 35 of the Interpretation Act (Canada), R.S.C. 1985, c. I-21;

            IN VIEW OF the general rules laid down by the case law and commentary;

            WHEREAS the Crown may be subject to legislation not only in the event of an express provision binding it, but also when the context of a provision or its purpose indicates that Parliament intended to bind the Crown;

            WHEREAS subsections 227(4.1) ITA and 86(2.1) EIA refer expressly to the BIA, any other enactment of Canada or a province or any other rule of law;

            WHEREAS a contrario Her Majesty is bound by subsections 81.1 and 81.2 BIA, and by necessary implication by any other federal or provincial legislation or any rule of law relating to the purpose of the federal provisions, the trust, the property, securities and priorities, and which is also not contrary to or inconsistent with exercise of the beneficial ownership and priority conferred on Her Majesty by subsections 227(4.1) ITA and 86(2.1) EIA;

            WHEREAS when the federal provisions at issue are interpreted in the context of the other provisions of the ITA - such as sections 222 and 223 ITA and the Federal Court Act, supra, p. 10 - which refer to the application of rules of provincial law in matters of recovery, execution of judgments, registration and publication of rights -, it is clear that Parliament intended to bind the Crown in right of Canada, to the extent that the applicable provincial rules are not inconsistent with the provisions of the ITA;

            WHEREAS further the federal provisions and sections 222 and 223 ITA would lose all meaning if Her Majesty were not bound by the said rules of provincial law;

            WHEREAS making the rule of the Crown in right of Canada subject to the ordinary law is a requirement of the rule of law;

            WHEREAS in the province of Quebec the C.C.Q. and C.C.P. are the "ordinary law" of the province, although they are legislation;

            WHEREAS a distinction must be made between the nature of a right and the way in which that right is exercised;

            WHEREAS the provincial provisions of a general nature applicable in the case at bar apply to all creditors;

            WHEREAS the said provisions do not diminish the beneficial ownership and do not negate the priority claim Her Majesty enjoys under the federal provisions;

            WHEREAS, therefore, Her Majesty is bound by these provincial provisions;

            WHEREAS, in the action at bar brought against the defendant, the plaintiff is seeking to rely on the provisions of the C.C.Q., since in the conclusions of her action she asks, inter alia, that the Court order the defendant to pay her, in addition to the amount of the claim, the additional indemnity mentioned in article 1619 C.C.Q.;

WHEREAS when the Crown chooses to rely on the law, it assumes the obligations and disadvantages of so doing;

            WHEREAS under subsection 39(1) of the Federal Court Act, except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions in force in any province between subject and subject apply to any proceedings in the Court in respect of any cause of action arising in that province;

            WHEREAS since the federal provisions indicate no deadline for asserting Her Majesty's beneficial ownership and priority claim, she should have asserted them within the deadlines which the creditors of a debtor must observe;

            WHEREAS if Her Majesty decided not to institute a personal action herself against the tax debtor or not to exercise the remedies conferred on her by the ITA for realizing her priority claim, she cannot assert her beneficial right unless she herself observes the provincial provisions applicable in the case at bar;

LEGAL ACTS WHICH MAY BE SET UP AGAINST HER MAJESTY

            WHEREAS forced surrender and judicial sale of the debtor's movable property were carried out in accordance with the conditions laid down in the C.C.Q. and C.C.P.;

            WHEREAS the plaintiff filed in this Court a certified statement from the RPMRR dated February 3, 1999, (exhibit 1 of the affidavit of documents dated October 18, 2000, signed by Henri Bégin);

            WHEREAS the said statement clearly indicates that prior notice of the exercise of a hypothecary right was registered by the defendant in the RPMRR on October 10, 1998;

            WHEREAS according to the certified statement from the RPMRR dated February 3, 1999, Her Majesty's name does not appear therein;

            WHEREAS the plaintiff submitted no claim to the person designated and the deadlines laid down in articles 910.2 and 910.3 C.C.P. have expired;

            WHEREAS at the hearing counsel for the plaintiff mentioned that the Crown is frequently unaware that she has a claim against a tax debtor at the time proceedings are brought at the initiative of other creditors for a judicial sale of a tax debtor's property;

            WHEREAS in the case at bar this allegation is not based on any evidence;

            WHEREAS, further, the Crown's ignorance clearly would not as such prevent the application of the general provisions of the C.C.Q. and C.C.P. on the exercise of hypothecary remedies and judicial sales;

            WHEREAS it would have been advisable for Her Majesty to take recovery proceedings against the debtor under the ITA or to register a legal hypothec against the debtor's property;

            WHEREAS, unlike the situation considered by the Federal Court in the decision rendered on September 13, 2002, in Les Entreprises Forestières P.S. Inc. andNewCourt Financial Ltd., 2002 FCT 968, now on appeal, there was no seizure by Her Majesty of the debtor's movable property;

            WHEREAS, in the absence of a judgment rendered by a competent court quashing the sale under judicial authority and scheme of collocation prepared by the notary, these legal acts must be considered valid and capable of being set up against the plaintiff and Her Majesty with their full effect;

NO REAL RIGHT OR RIGHT OF PURSUIT OVER MOVABLE PROPERTY

            WHEREAS subsections 227(4.1) in fine ITA and 86(2.1) in fine EIA apply to cases of judicial sales or other similar cases where the proceeds of realization of property must be shared between creditors;

            WHEREAS the beneficial right specified in subsections 227(4.1) ITA or 86(2.1) EIA does not as such confer any real right or right of pursuit over the property;

NO PERSONAL ACTION AGAINST THE DEFENDANT

            WHEREAS the federal provisions confer no right to a personal remedy against a bona fide purchaser of property subject to the deemed trust, whether the latter is a creditor of the tax debtor or not;

            WHEREAS in the absence of clear language in the ITA the Court cannot accept the interpretation suggested by the plaintiff of the effect of the federal provisions, which in the absence of fraud or collusion amounts to holding secured or unsecured creditors and bona fide third party purchasers severally and personally liable for the non-payment of source deductions, which must be made exclusively by the tax debtor under section 153 ITA;

            WHEREAS the scheme of movable guarantees set out in the C.C.Q. is designed to ensure certainty in commercial transactions;

            WHEREAS the Court must interpret the federal provisions consistent with, first, the achieving of predictable results in commercial transactions, and second, the distribution of the exclusive powers assigned to Parliament and the provincial legislatures by sections 91 and 92 of the Constitution Act, 1867;

            WHEREAS if the Court accepted the interpretation suggested by the plaintiff of the federal provisions, this would be likely to create legal uncertainty that would be harmful to the security of commercial transactions and would also compromise the operation and effectiveness of the provincial provisions in the province of Quebec;

            WHEREAS when the federal Parliament decides to allocate liability for payment to a third party other than the tax debtor, it does so expressly, providing that a request for payment shall be sent to the third party, as in the case of section 224 ITA, where inter alia it has conferred a right of seizure in execution on the Minister when the particular conditions mentioned in that provision have been met;

            WHEREAS it would have been desirable for the federal Parliament to intervene clearly and to specify the joint liability of persons other than the tax debtor, as indicated inter alia in sections 160 or 227.1 ITA;

            WHEREAS Her Majesty has no right of action against a third party unless the latter was in a position in which he could have been held jointly and severally liable in a personal action brought by Her Majesty against the tax debtor;

            WHEREAS the sum of $35,977.46 claimed from the defendant personally is not a tax, interest, penalty, costs or any other amount payable by the defendant personally under section 222 ITA;

            WHEREAS the plaintiff has no cause of action under the federal provisions against the defendant and her claim is without basis;

            FOR THESE REASONS, THE COURT ORDERS THAT:

            The plaintiff's action is dismissed;

The whole with costs against the plaintiff.

Certified true translation

Suzanne M. Gauthier, C. Tr., LL.L.

                                                    FEDERAL COURT OF CANADA

                                                                 TRIAL DIVISION

                              NAMES OF COUNSEL AND SOLICITORS OF RECORD

COURT No.:                                                                  T-1422-00

STYLE OF CAUSE:                                                     Attorney General of Canada and Caisse Populaire D'Amos

PLACE OF HEARING:                                                Montréal, Quebec

DATE OF HEARING:                                                  JUNE 11, 2002

REASONS FOR ORDER AND ORDER BY:         MARTINEAU J.

DATED:                                                                           OCTOBER 11, 2002

APPEARANCES:

Nadine Dupuis                                                                  FOR THE PLAINTIFF

Patrick Vézina

Jocelyn Geoffroy                                                               FOR THE DEFENDANT

SOLICITORS OF RECORD:

Morris Rosenberg                                                              FOR THE PLAINTIFF

Deputy Attorney General of Canada

Jocelyn Geoffroy                                                               FOR THE DEFENDANT

Geoffrey, Matte, Kélada & Associés

Amos, Quebec