Scotia Mortgage Corporation v Gladu, 2017 BCSC 1182

The petitioners, who as mortgagees had foreclosed on properties of non-resident debtors, petitioned by Court for a declaration that a purchaser acquiring the property from them would not thereby be acquiring the property from a non‑resident person so that for the purpose of s. 116(5), such property would not be "acquired from a non‑resident person." In this regard they relied (para. 25) on the proposition that “foreclosure law in British Columbia makes clear that upon a foreclosure, the mortgagee holds the legal estate to the land, subject only to the mortgagor's right of redemption, and so the mortgagee, not the mortgagor, is the vendor of the property to a subsequent purchaser.”

In finding that he lacked the jurisdiction to make this declaration, Macintosh J stated (at paras 9, 28):

If the requested declarations are to have any practical effect, the Petitioners intend that they would bind the Minister of National Revenue in her administration and enforcement of the ITA pursuant to s. 220(1) of that legislation.

[quoting at para. 15 from Felsen Foundation v. Jabs Construction, 98 D.T.C. 6454 (BCSC) at para. 7:] “This Court is not in the business of deciding issues solely for the purposes of instructing other courts."

… The petitions before me are directed exclusively at the interpretation of the Income Tax Act for the sole eventual purpose of determining whether there needs to be a remission to the Receiver General of the 25 per cent tax applicable to non‑residents under s. 116(5) of the ITA.

Two banks which had foreclosed on properties of non-resident debtors, petitioned the B.C. Supreme Court for a declaration that a purchaser of the foreclosed properties would be considered to be acquiring them from the (resident) banks rather than from the non-residents (so that s. 116(5) would not apply.) In this regard they relied (para. 25) on the proposition that “foreclosure law in British Columbia makes clear that upon a foreclosure, the mortgagee holds the legal estate to the land, subject only to the mortgagor's right of redemption, and so the mortgagee, not the mortgagor, is the vendor of the property to a subsequent purchaser.”

Macintosh J found that he lacked the jurisdiction to make the requested declaration given that, as a practical matter, it related solely to a federal income tax issue.