Re Robert Charles Hokanson, [1995] 1 CTC 314, 94 DTC 6683

Citations
[1995] 1 CTC 314, 94 DTC 6683

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Text of decision

Hargrave, P.:—This is a motion dealt with in writing pursuant to Rule 324. It arises out of a challenge to a bailiff’s right to poundage where goods may have been seized under a writ of execution, but not realized upon, by reason of a subsequent payment of the debt to the Minister of National Revenue. The issues here are whether there was a seizure and a levy.

In the alternative, if there was a levy, the applicant asks that the Court exercise its discretion and decrease the poundage.

Pertinent evidence

In November 1993, the Crown obtained a writ of execution, based on an August 18, 1993 certificate under the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 (the "Act"), for some $54,000 against Robert Hokanson. The Crown, by letter of February 9, 1994, sent the writ to Pacific Court Bailiff Execution Services Inc. ("Pacific Bailiff') requesting the seizure of a vehicle. The letter instructed Pacific Bailiff that the seizure not be deferred by reason of any representation made by Robert Hokanson.

Robert Hokanson, in an affidavit sworn June 24, 1994, recounts the visit of a bailiff from Pacific Bailiff in or about the first week of March 1994. He says he advised the bailiff that real property, over which the Crown’s judgment was registered, was to be sold to meet the judgment and after about half an hour the bailiff left, apparently satisfied that the judgment would be paid.

Michael Cassidy, the attending bailiff, says that the meeting with Robert Hokanson occurred on March 8, 1994; that he seized a 1990 Nissan pickup truck; he then reviewed the notice of seizure and its man in possession provisions; and that Mr. Hokanson signed the notice agreeing, in consideration of Pacific Bailiff withdrawing their man in possession, that he would act as Pacific Bailiff’s bailee and further he agreed that the withdrawal of the man in possession did not constitute abandonment of the seizure.

Mr. Hokanson’s lawyer, in his affidavit, sets out that Mr. Hokanson sought legal advice in early March 1994.

By contract of purchase and sale dated March 11, 1994, Robert Hokanson agreed to sell his interest in property on Vancouver Island to Carrie Hokanson. The transfer was subsequently completed. The Crown’s judgment was paid out on April 20, 1994.

The lawyers for Robert Hokanson hold in trust the amount needed to meet Pacific Bailiff’s account. Robert Hokanson disputes the commission or poundage portion of Pacific Bailiff’s account on the grounds set out in his June 24, 1994 affidavit:

7. Mr. Cassidy had no involvement in the sale or distribution of proceeds.

9. Pacific Court Bailiff played no role in the sale of the subject property and as such has no valid claim to the commission of $1,758.11 as claimed by Pacific Court Bailiff Execution Services Inc.

In a subsequent affidavit sworn July 12, 1994, Kenneth Newcomb, lawyer for Robert Hokanson, sets out:

3. That Pacific Court Bailiff Execution Services Inc. was not involved in the satisfaction of judgment No. EG 112325. Mr. Hokanson retained our offices to assist him in this matter in early March 1994....

4. I have been advised by Mr. Hokanson, and very [sic] believe same to be true, that he had advised Mr. Cassidy of Pacific Court Bailiff Services Inc. that the property was to be sold and that the full amount of the judgment was to be paid from the sale proceeds of the property.

5. Mr. Cassidy of Pacific Court Bailiff Execution Services Inc. took no steps to effect the sale of the property, and did not participate in the subsequent disposal of same....

7. Pacific Court Bailiff Execution Services Inc. did not participate in either the sale of the subject property or the payment of $55,499.40 in satisfaction of judgment No. EG 112325.

Submissions

The argument on behalf of Robert Hokanson is that while Pacific Bailiff attended to execute the seizure, the attending bailiff, notwithstanding specific instructions to make the seizure, did not take possession of the vehicle by reason of Robert Hokanson’s representations that the judgment would be met from the sale of property; that payment was made to the Crown by an agreed compromise before the seizure was effected in full by the bailiff; and that the bailiff is entitled to reasonable cost of attending at the Hokanson premises to attempt to seize and sell the vehicle.

Robert Hokanson says that there was either no seizure, or if there was a seizure, no connection between the seizure of the vehicle and the subsequent payment of the judgment. Alternately, if there was a seizure, subsection 106(3) of the Court Order Enforcement Act, R.S.B.C: 1979, c. 75 applies:

(3) Where a sheriff has seized personal property of a debtor under a writ of execution, and the personal property is not sold and no money is levied on the execution of the writ, the sheriff is entitled to receive fees, expenses and poundage based on the smaller of the amount of the judgment or the amount settled for, at the same rate as allowed under the Supreme Court Rules, or where a court directs a smaller rate, at that rate.

Under this first alternative, because a compromise was agreed between the parties before seizure was completely effected and no monies were levied by the sheriff, poundage ought to be reduced.

As a second alternative, if there was a levy, section 9 of Tariff "A" of the Federal Court Rules, allowing the Court to decrease poundage at its discretion, ought to be applied.

Analysis

The issues are first, whether there was a seizure of the vehicle; second, if there was a seizure, was there a levy; and third, ought the poundage to be reduced either under the provincial legislation because there was no levy under the writ of execution, or if the seizure was instrumental in levying money, that is the agreed settlement, whether the poundage ought to be reduced under the discretion provided for in Tariff "A" of our rules.

I. Seizure

Whether there has been a seizure is a question of fact, or as elaborated upon by Edmond Davies J. in Lloyds and Scottish Finance Ltd. v. Modern Cars and Caravans (Kingston) Ltd., [1966] 1 Q.B. 764, [1966] 2 All E.R. 732, at page 776 (Q.B.):

Seizure vel non is a question of fact, turning upon the circumstances of each particular case, but certain guiding principles have been evolved over the years, and these are conveniently summarized in Halsbury’s Laws of England, 3rd ed. (1956), Vol. 16, page 55, in this way-and I am reading from the volume: "For an act of the sheriff or his bailiff to constitute a seizure of goods, it is not necessary that there should be any physical contact with the goods seized; nor does such contact necessarily amount to seizure. An entry upon the premises on which the goods are situated, together with an intimation of an intention to seize the goods, will amount to a valid seizure, even where the premises are extensive and the property seized widely scattered, but some act must be done sufficient to intimate to the judgment debtor or his servants that seizure has been made, and it is not sufficient to enter upon the premises and demand the debt. Any act which, if not done with the authority of the court, would amount to a trespass to goods, will constitute a seizure of them when done under the writ.

In the Lloyds and Scottish case, supra, the sheriff attended on the owner of a caravan with a writ of execution and explained to the owner why he was there. The owner said that he proposed to negotiate payment with the judgment creditor’s solicitor. The owner of the caravan refused to sign a "walking possession" agreement, a form of bailment agreement. The sheriff took no further steps, other than to come by from time to time to see that the caravan was still there and at some point found it missing, the caravan having been sold by the owner to a third party.

One of the arguments made in the Lloyds and Scottish case was that the walking possession agreement having been refused by the owner and the sheriff then leaving, the caravan had never been seized. However, the judge interpreted the incident differently, taking the request for a walking possession agreement as consistent with the view that the sheriff was then levying execution. The judge rejected the submissions that the sheriff ought to have done more and held that there had been a seizure and the fact that the sheriff did nothing further after the date of the seizure, than to check from time to time to see the caravan was still there, did not prejudice the seizure.

The facts in favour of finding a seizure are stronger in the present instance in that Pacific Bailiff, in contrast with the sheriff in the Lloyds and Scottish case, obtained a bailment agreement from the vehicle owner, Robert Hokanson. All of this is consistent with a seizure, which I find took place on March 8, 1994.

II. Was there a levy?

Counsel for Robert Hokanson correctly points out that the onus is on Pacific Bailiff to show that payment of the debt, from the proceeds of the sale of land, was a consequence of the seizure of the vehicle. Counsel submits that Pacific Bailiff must overcome Robert Hokanson’s advice, at the time of the seizure, that steps were being taken to pay the debt.

In Bean v. Pauker, Shull and Wudy (1980), 20 B.C.L.R. 244, 17 C.P.C. 230 (B.C.S.C.), at page 246 (B.C.L.R.), Judge van der Hoop considered whether payment of the balance of a debt was compelled by the seizure:

It seems to me that the sheriff makes out a prima facie case by proof of seizure and payment thereafter, and it is up to the judgment debtor to establish, as was done in the Richards case, that the payment was not compelled by the seizure.

In the Bean case affidavit material set out diverse opinions, on the one hand, that other factors, not the seizure, were responsible for the payment and on the other hand, that the sheriff believed that payments by the judgment debtor were at least partially consequent upon the seizure.

Judge van der Hoop discarded the opinions set out in the affidavit material as of no real assistance (at page 246):

what is of significance is the fact of the seizure, the payments and the dates thereof and the sworn evidence of the applicant that he did not make payments by reason of the seizure.

He then summarized the case:

The payments made after seizure in this case are consistent with compulsion and I am not satisfied that the statement by the judgment debtor is, by itself, sufficient to displace the presumption of compulsion. It may be that other factors weighed more heavily with the judgment debtor in making the payments, but the element of compulsion arising from the seizure still existed.

The judge dismissed the application to fix poundage at a lesser rate.

In Richards v. Producers Rock and Gravel Co. (1914), 17 D.L.R. 588, 27 W.L.R. 890 (B.C.S.C.), the Court reached a different result. In that case the debtor promised, on September 24, to pay on the 26, noting that two days were required to send the cheque by mail from Victoria to Vancouver, for a second signature and to have it returned by CPR steamer by mail. However, the cheque was not delivered by the post office until the 27. In the meantime, the creditor’s lawyers delivered a writ of execution to the sheriff on September 26, resulting in Mr. Richards, the sheriff for the County of Victoria, suing to recover poundage, fees and expenses on the basis of having levied the payment.

The judge, given the evidence that the cheque had been sent for the second signature and the fact that it had been mailed, from Vancouver, with the second signature on it, before the purported seizure, would have found that if there had been a seizure, payment was not as a result of that seizure. However, the case was not decided on this point, for unknown to the parties an Ontario court had made a winding-up order as against the debtor before the payment agreement and the seizure.

In the present instance and being guided by the Bean case I have looked carefully at the affidavit of Robert Hokanson. He does not say, in plain words, that the seizure was not a factor in the payment of the debt. He says that the bailiff "had no involvement in the sale or the distribution of the proceeds" and that "Pacific Court Bailiff played no role in the sale of the subject property and as such has no valid claim to the commission...". He also relies upon his advice to the bailiff, at the time of the seizure, that he intended to satisfy the judgment by sale of property; on attendance to obtain legal advice sometime in early March; and on an interim sale and purchase agreement, for the property, signed after the seizure.

The facts in the present case may be distinguished from those in the Richards case: in the latter there was more than just an undocumented intent to satisfy the judgment, for the cheque in payment, as agreed, had in fact been signed and was on the way back to the judgment creditor before the seizure.

In the present instance, Robert Hokanson has not satisfactorily rebutted the presumption that the seizure had something to do with the payment. For example, it would have been easy for him, if it had been the case, to get into evidence that he had attended for legal advice, as to the sale of the land to satisfy the judgment, before the seizure on March 8, and not merely that he obtained legal advice in early March. It is too much of a coincidence that the sale and purchase agreement for the land was entered into three days after the seizure.

I find that the seizure was an effective cause in levying money, through the sale of real property, to satisfy the judgment.

III. Relief as to poundage

The final issue is whether there ought to be relief in the amount of poundage payable to Pacific Bailiff.

Subsection 106(3) of the Court Order Enforcement Act, set out in full above, which would allow poundage at a lesser rate in some instances, does not apply. Application of that section depends upon there being no levy: Workers’ Compensation Board v. Island Cash Buyers Ltd. (1980), 10 B.C.L.R. 190 (B.C.S.C.). However the matter does not end there.

Section 9 of Tariff "A" to our rules provides in part that even though the sheriff (or bailiff in this case) is entitled either to fees or allowances under provincial legislation:

The fee or allowance or fee for realization on execution, or "poundage", that may be taken and received by a sheriff may be increased or decreased in the discretion of the Court on the application thereto of any interested party.

In The "Saturna Maid", 100 D.L.R. (3d) 100, [1979] 2 F.C. 342 at page 344, the Court of Appeal considered an appeal from the Trial Division which had confirmed the taxation of a marshall’s bill of costs. In passing, Chief Justice Jackett noted that:

With regard to a taxation where section 7 is invoked, it should not be overlooked that section 9 provides a safeguard against absurd results.

In the present instance, the poundage claimed by the sheriff would not lead to absurd results, however "absurd results" may be a rather difficult measure to apply and perhaps too high a standard, all things considered.

In Smerchanski v. M.N.R., [1979] 1 F.C. 801 (F.C.A.), Chief Justice Jackett dealt with an increase in fees under our Tariff "B". He set a standard that I find easier to apply, being "...a reasonably arguable case for an exercise of judicial discretion increasing the fees of solicitors and counsel in connection with this appeal. Such a direction must be based on relevant considerations and must not be made on an arbitrary basis" (page 805).

Counsel for Robert Hokanson submits that poundage ought to be decreased on the facts of the case. I assume these facts would include the work done by Pacific Bailiff and the extent to which the levy was instrumental in producing payment.

Leaving the vehicle with Robert Hokanson on a bailee’s undertaking, showed initiative on the part of the bailiff and a willingness to make a reasonable decision outside of his instructions. The bailiff’s decision was later approved by the Crown as judgment creditor. This avoided the expense of bringing in the seized vehicle and, if Robert Hokanson’s payment came through, returning the vehicle. This is indicative of a job properly done by Pacific Bailiff.

I now turn to the second aspect, whether there ought to be an abatement in poundage on the basis that there was another factor in Robert Hokanson making payment, being the judgment registered against Robert Hokanson’s real property.

Both parties referred me to Bean, supra. In that case the judgment creditor said that the seizure by the sheriff of shares did not cause any hardship: rather it was the registration of judgments in the land registry office that precipitated payment. In dismissing the application, in the Bean case, to fix poundage at a lower rate, the judge commented on registration of the judgments in the land registry as the main reason for the payments: