Date: 19990329
Docket: ITA-4268-98
MONTRÉAL, QUEBEC, THE 29th DAY OF MARCH 1999
| Present: RICHARD MORNEAU, PROTHONOTARY |
In the matter of the Income Tax Act
- and -
| In the matter of an assessment or assessments by the Minister of National Revenue under one or more of: the Income Tax Act, the Canada Pension Plan and the Employment Insurance Act |
|
AGAINST:
2959-4660 QUÉBEC INC.
Judgment Debtor
AND
HONEYWELL LIMITED
Garnishee
ORDER
THE COURT ORDERS that all amounts due or becoming due by the garnishee to the judgment debtor be absolutely garnished, assigned and transferred to Her Majesty the Queen in right of Canada, and in particular, amounts for services rendered and goods sold and delivered for the sum of $35 407.02, in order to satisfy, and up to the amount owed under, the Certificate filed in the case at bar on May 28, 1998 pursuant to s. 223 of the Income Tax Act, namely the sum of $28 812.61, plus interest compounded daily at the rate prescribed in accordance with the Income Tax Act on the said amount for the period from March 25, 1999; plus costs of these garnishment proceedings, amounting to $2 457.59.
IT IS ACCORDINGLY ORDERED that the garnishee, Honeywell Limited, shall pay Her Majesty the Queen the sum of $28 812.61, plus interest compounded daily at the rate prescribed in accordance with the Income Tax Act on the said amount for the period from March 25, 1999 to the date of payment, plus costs of these garnishment proceedings, amounting to $2 457.59, the said amount to be awarded in priority to the amount evidenced by judgment, up to the amount of $35 407.02 owed by the garnishee to the judgment debtor.
Richard Morneau
Prothonotary
Certified true translation
Monica F. Chamberlain
Date: 19990329
Docket: ITA-4268-98
In the matter of the Income Tax Act
- and -
| In the matter of an assessment or assessments by the Minister of National Revenue under one or more of: the Income Tax Act, the Canada Pension Plan, and the Employment Insurance Act |
|
AGAINST:
2959-4660 QUÉBEC INC.
Judgment debtor
AND
HONEYWELL LIMITED
Garnishee
REASONS FOR ORDER
RICHARD MORNEAU, PROTHONOTARY:
[1] This is a decision on an application from the judgment creditor, Her Majesty the Queen, for a garnishment order against the garnishee. In reaction to this enforcement measure, the latter party filed a written objection with central argument to the effect that the second paragraph of
section 1673 of the Civil Code of Québec (C.C.Q.) now requires that the judicial compensation provided by the section has a retroactive effect to the day that it was applied for by a party.
[2] Section 1673 reads as follows:
| |
1673. Compensation is effected by operation of law upon the coexistence of debts that are certain, liquid and exigible and the object of both of which is a sum of money or a certain quantity of fungible property identical in kind. |
|
| |
A person may apply for judicial liquidation of a debt in order to set it up for compensation. |
|
[3] Despite the opposing position maintained by counsel for the garnishee, I believe that the approach of counsel for the judgment creditor must prevail. Hence, I conclude that when the second paragraph of section 1673 of the C.C.Q. was enacted, the Quebec legislature did not overturn the well-established case law concerning the lack of retroactivity in judicial compensation. I am also of the opinion that the legislature merely codified a practice established by the courts, specifically the right of a party to apply for judicial compensation through a counterclaim, while still maintaining the restriction found in section 1196 of the C.C.L.C. and reiterated in section 1681 of the C.C.Q. under which compensation may not be effected to the prejudice of the acquired rights of a third person.
[4] The following authorities examine this topic:
A.S.M. Canada Limited v. Créalise Conditionnement Inc., S.C., J.E. 97-1399, 14pp., p. 23
BEAUDOIN, Jean-Louis, Les Obligations, 4th edition, Yvon Blais Inc., Cowansville, 1993, pp. 555 et seq.
KARIM, Vincent, Commentaries sur les obligations, Volume 2, Yvon Blais Inc., Cowansville, 1997, pp. 495 et seq.
TANCELIN, M., GARDNER, D., Jurisprudence commentée sur les obligations, 6th edition, Wilson & Lafleur, Montréal, 1997, pp. 704 et seq.
TANCELIN, Maurice, Des obligations, actes et responsabilité, Wilson & Lafleur, Montréal, 1997, pp. 607 et seq.
VÉZINA, N., LANGEVIN, L., "L'extinction des obligations," Collection de droit 1997-1998 , Vol. 5 - Oligations et contrats - Yvon Blais Inc., Cowansville, pp. 133 et seq.
[5] In practical terms, these legal principles mean that the garnishee, who is indebted to the execution debtor, would become a creditor of the execution debtor only following a final judgment which has not yet been rendered and thus is subsequent to the judgment creditor"s instant application for a garnishment order. Consequently, the garnishee cannot claim compensation to the prejudice of the judgment creditor.
[6] This main conclusion means that, in my opinion, there is no need to rule on the other arguments raised by the garnishee, including the presence of sufficient relatedness between the garnishee's debt and its claim against the execution debtor.
[7] For these reasons, the garnishment order absolute requested by the judgment creditor will be issued.
Richard Morneau
Prothonotary
MONTRÉAL, QUEBEC
March 29, 1999
Certified true translation
Monica F. Chamberlain
| Federal Court of Canada Trial Division |
Date: 19990329
Docket: ITA-4268-98
Between:
| In the matter of the Income Tax Act |
| In the matter of one or more assessments by the Minister of National Revenue pursuant to one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Employment Insurance Act |
Judgment Debtor
Garnishee
REASONS FOR ORDER
FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NUMBER:
STYLE OF CAUSE:
ITA-4268-98
In the matter of the Income Tax Act
- and -
In the matter of an assessment or assessments by the Minister of National Revenue under one or more of: the Income Tax Act, the Canada Pension Plan and the Employment Insurance Act
AGAINST:
2959-4660 QUÉBEC INC.
Judgment debtor
AND
HONEYWELL LIMITED
Garnishee
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: March 23, 1999
REASONS FOR ORDER BY RICHARD MORNEAU, PROTHONOTARY
DATED: March 29, 1999
APPEARANCES:
Pierre Lamothe for Her Majesty the Queen
Alain Harvey for the judgment debtor
Claude Morency for the garnishee
SOLICITORS OF RECORD:
Morris Rosenberg for Her Majesty the Queen
Deputy Attorney General of Canada
Alain Harvey for the judgment debtor
Mascouche, Quebec
Byers Casgrain for the garnishee
Claude Morency
Montréal, Quebec
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