Her Majesty the Queen v. Gerrit Jan Van De Wygerdand Dame Henderika Alida Ten Veen, Intervenant., [1983] CTC 99, 83 DTC 5159

Walsh, J:—A provisional order was issued in this matter against defendant on November 29, 1976, resulting from a certificate produced on November 25, 1976, for income tax arrears for the years of 1973, 1974 and 1975, total- ling $100,419.18, which together with penalty resulted in a total indebtedness at the time of $137,550.29* [1] attaching a property which was said to belong to defendant described as follows:

A certain emplacement situated in the City of Beaconsfield fronting on Sherbrooke Street, known and designated as the North-east part of Subdivision Two hundred and twenty-six of original lot number Twenty-five (25 NE pt 226) on the Official Plan and Book of Reference for the Parish of Pointe Claire, measuring Eighty feet (80’) in width by One hundred feet (100’) in depth and having an area of Eight thousand square feet (8000 sq ft) bounded in front to the North-west by Sherbrooke Street, in rear to the South-east by part of Subdivision Two hundred and twenty-four of the said original lot, on one side to the North-east by Subdivision One of Subdivision Seventy-seven of the said original lot and on the other side to the South-west by the residue of the said Subdivision Two hundred and twenty-six.

All of the above measurements are English Measure and more or less.

With the building thereon erected bearing Civic Number 136 Sherbrooke Street.

When an attempt was made to have this order made definitive a contestation was made by the defendant and also an intervention by Dame Henderika Alida Ten Veen both alleging that the owner of the said property was the intervenant who had purchased same from defendant for $75,000 by deed of sale dated August 19, 1976. It is plaintiff's contention that the sale by the debtor to his mother, the Intervenant, was made solely to enable him to avoid payment of his debts and especially the income tax liability. On April 23, 1979, the attorneys representing defendant and intervenant were authorized to cease representing them based on an affidavit from the attorneys that their clients no longer wished to be represented by them and that they had ceased to reply to communications from said attorneys. A notice to them to name new attorneys was duly served after judgment was rendered granting a special mode of service in the Netherlands where they resided.

On August 22, 1980, a typewritten letter apparently signed by the intervenant was written to the administrator of the Court explaining that she was now in an old peoples’ home in the Netherlands and could not afford a lawyer in Canada and asking for legal aid. The Registry answered her giving the address of the Legal Aid Office in Lachine, Quebec, but apparently, and understandably, Legal Aid was not forthcoming. On June 4, 1981, a letter was received from Johannes Van de Wygerd acknowledging receipt of a notice sent by plaintiff on May 27, 1981 indicating intention to file a motion of dismissal of the contestation for want of prosecution pursuant to Rule 440. Copy of the rule was enclosed. Mr Van de Wygerd states in his letter that his mother died on September 18, 1980, that he is the executor of her will, that he is the only one who can bring proceedings on for trial. He indicates his intention of contesting the validity of the privilege registered against the property by plaintiff. The Registry wrote him on June 26, 1981, enclosing copy of Rules 1724 and 1725 as to procedure to have his deceased mother replaced as intervenant, and suggesting that he appoint a solicitor to represent him or be present in person. On July 21, 1981, the defendant G J Van de Wygerd wrote counsel for the Department of Justice advising that the notice of the intention to apply Rule 440 came into his hands recently, and contending that it is only a defendant who can apply to the Court to dismiss an action for want of prosecution. On August 10, 1981, J Van de Wygerd wrote the Court advising that he would be abroad from August 20 until early December 1981 for business reasons and would have no address where he could be contacted so that any mail to him should be kept until his return to Holland.

On April 16, 1980, intervenant had written counsel for plaintiff asking for advice as to procedure, and on May 28, 1980, plaintiff’s counsel replied enclosing a copy of the Rules, and pointing out that counsel could not give advice on the way the case should be handled. Intervenant replied to this on June 27, 1980. At about the same period, on April 30, 1980, defendant had written plaintiff’s counsel requesting information as to procedure. This letter was replied to on May 20 giving information as to setting down of a case for hearing and provisions for translation.

Previously, on March 28, 1980, counsel for the plaintiff wrote intervenant apologizing for having written a letter in French which intervenant indicated she did not understand and sent the same letter in English. A similar letter was sent on the same date to defendant G J Van de Wygerd and in his letter of April 30, to which reference has already been made, he expressed his appreciation for the translation.

Despite all the information given to the parties nothing was done by them and on July 29, 1982, plaintiff presented a petition ex parte to fix a date for hearing of the opposition, for making the order definitive, and requiring the heirs of the intervenant to continue the suit before the date for hearing to be fixed by the Court and that in default of their doing so 15 days before the date fixed for hearing the intervention be struck. Permission was sought to serve Gerrit Jan Van de Wygerd, PO Box 40, 2240 AA Wassenaar, The Netherlands and Mr Johnannes Van de Wygerd, Testamentary Executor of the succession of Dame Henderika Alida Ten Veen at the same address. On August 19, 1982, the Associate Chief Justice granted this order modifying the petition only to the extent that intervention would be struck unless the executor of the estate of intervenant became a party to the proceedings thirty days before the date of hearing which was set for November 8, 1982. On the date fixed, since the registration receipts had not been returned for the documents sent by double registered mail it was felt that it would not be appropriate for the hearing to proceed. The hearing was therefore adjourned sine die in order that an attempt be made to effect personal service. On November 24, 1982, a date for hearing was set for March 8, 1983, the order providing that service might be made by leaving a copy to the persons concerned in person, or by leaving a copy under the door at the addresses mentioned, or by leaving a copy with a reasonable person residing at the abovementioned address.

A telex sent from the Department of External Affairs at The Hague advises that it has been advised by the Minister of Foreign Affairs that the Minister of Justice had been unable to serve the document by the requested date of February 9, due to the absence of the de Wygerds and that a certificate of service could not be issued if the documents were left at the PO Box address suggested as such procedure does not constitute legal service in Dutch law. The telegram states that the Department can have little influence on expediting service. In this instance however the double registration cards had been returned and entered in the Court record and initialled by initials which appear to be similar to those of Johannes Van de Wygerd who had signed various other documents and letters. I am satisfied that notice of the hearing was duly received by the parties concerned. While it is always important not only that justice be done but that justice be seen to be done I am satisfied that defendant, the tax debtor and his brother who claims to be the executor of the estate of the intervenant have been made well aware by voluminous correspondence of their legal position and of the date set for the hearing. It is evident that a defendant or intervenant cannot delay a plaintiff's action indefinitely by failing to take any steps whatsoever to protect his interest although duly advised as to what must be done. The matter has dragged on for over six years and both plaintiff’s counsel and the office of the Court have done everything reasonable and proper to assist defendant and intervenant who have, since their counsel withdrew from the record because of his inability to receive further instructions, done nothing save indulge in extensive correspondence. The Court cannot provide counsel to defend their interest, and even if it could such counsel would be powerless if they did not cooperate with him.

I therefore directed that the hearing proceed, all of the evidence submitted by plaintiff being examined carefully since the setting aside of the sale from defendant, the tax debtor, to the intervenant said to be fraudulent and in order to avoid defendant’s tax liability to plaintiff is a very serious matter.

The evidence adduced at the hearing disclosed that Gerrit Jan Van de Wygerd, defendant, bought the property in question on December 20, 1971. He sold it on August 19, 1976, to his mother Henderika Alida Ten Veen for $75,000 of which $69,452.34 was paid when signing the deed, $1,000 having been previously paid and a hypothec for $4,547.66 of London Life was assumed by the purchaser payable in monthly instalments, the last to be on December 26, 1981. The deed of sale was signed by the wife of Gerrit Jan Van de Wygerd by virtue of power of attorney and by Yves Levesque, notary, on behalf of Dame Henderika Alida Ten Veen by virtue of power of attorney.

Gerrit Jan Van de Wygerd had some years earlier registered at the Court House in Montreal a declaration that he was carrying on business as a sole trader under the style of Tradex Marine since July 1966. This has never been dissolved. On August 5, 1976, Tradex Marine had transferred Canadian dollars 19,752 from Canadian Account 2402-14 in the Bank of Nova Scotia, Dorchester-University Street, Montreal, to purchase US $20,000 to deposit in its US dollar Account 3122-15 and on the same day had by telegraph sent US $72,000 to the Chase Manhattan Bank in Panama City to credit to the account of Sunimar SA. Apparently the $20,000 transfer from Canadian to the US dollar accounts was to provide sufficient additional funds in the latter account to permit this transfer of $72,000 to Panama City. A photostat of a ledger sheet of the current account of Tradex Marine shows that on August 19, 1976, the sum of $69,822.07 was deposited in Account No 2402-14 and on the same day two sums of $30,000 and $40,000 respectively were withdrawn from said account. Various written notations on the ledger cannot be referred to as there is no indication who made them. It is evident however that the deposit of $69,822.07 on August 19 corresponds closely to the balance of $69,452.34 resulting from the sale to intervenant on that date and that the money was no sooner deposited in the account of Tradex Marine than it was withdrawn for undisclosed purposes. Also it is by no means without significance that only two weeks previously on August 5, $72,000 US had been sent by Tradex to Panama. The bank manager who testified stated that records for these accounts which have long since been closed are no longer available and cancelled cheques would have in any event been sent to the client, it being a current account, so that the evidence is of necessity circumstantial. The similarity of the amounts however is not without significance. Evidently Tradex Marine, operated as a sole proprietorship by Gerrit Jan Van de Wygerd, was obliged to send some $72,000 US to Panama, and Mr Van de Wygerd shortly thereafter obtained this money for Tradex Marine by the sale of the property in question to his mother, which funds were then immediately withdrawn from the Tradex Marine account for undisclosed purposes.

A real estate agent, Irene Apinee of the Montreal Trust with whom Gerrit Jan Van de Wygerd dealt, testified that he signed a listing agreement on behalf of his mother, the intervenant, on September 30, 1976, listing the property for sale at $125,000. This agreement was produced. On September 1, 1976, the intervenant, on the advice of her son, Gerrit Jan Van de Wygerd, had written Mrs Apinee requesting documents for her to sign in connection with the sale of the house at this price, the letter from her being typed but signed by her.

On October 13, 1976, the price was reduced to $95,000 the document in connection with same being signed by Gerrit Jan Van de Wygerd. In August 1976 (the exact date not being on the letter) he had written Mrs Apinee to the effect that he would be absent from Canada for a lengthy period of time and requesting that as of September 1, 1976 until further notice all correspondence be addressed to G J Van de Wygerd, PO 40, Wassenaar, The Netherlands. Despite this it was he himself who signed the listing on September 30, 1976 and the reduction of the price on October 13, 1976, so apparently he was still in Canada. On July 19, 1977, a listing was made with the Montreal Trust Company for the rental of the property at $500 a month, the agreement apparently being signed by the intervenant herself.

The intervenant had a bank account No 3133-870 at the Bank of Montreal, CIL Building branch and on August 13, 1976, had signed a power of attorney form in connection with said account in favour of Gerrit Jan Van de Wygerd and Johannes Van de Wygerd. She had also signed a specimen signature card authorizing either of them to make withdrawals from the said account. This account, according to the testimony of the bank manager, is still operating and the bank has been given no notice of her death. The property was leased in due course to Mr A R Ferrie, whose wife testified, from August 20, 1977, to August 19, 1978, for $450 a month and they still occupy the house by virtue of renewals of said lease. The original lease appears to have been signed by the intervenant as owner who subsequently carried on correspondence with the tenant, the letters being typed and signed by her. Other letters to Mrs Apinee in July and August 1978, although the name H A Van de Wygerd Ten Veen is typed in are signed with what appear to be the initials of Joahnnes Van de Wygerd. A letter sent on March 25, 1977, to Mrs Apinee suggesting the leasing of the property since the real estate market is in a slump is clearly signed with these initials with the words “For H A Van de Wygerd Ten Veen signed by John Van de Wygerd”. In May 1982 he wrote Mr and Mrs Ferrie suggesting that they pay the rent six months in advance instead of increasing it to $550 per month which they readily complied with. On April 21, 1981 he had written suggesting that the tenants deal directly with him rather than with the Montreal Trust so as to save the annual commission on the renewal. He never at any time apparently advised the tenants of his mother’s death.

Mrs Ferrie testified that rental cheques were sent to H A Van de Wygerd Ten Veen at PO Box 40, 2240 AA Wassenaar, The Netherlands and were not returned. On one occasion a cheque was lost in the mail and replaced and for a year in 1979 payments were made to said intervenant’s bank account in Montreal and mailed in the same way. The cheques were never made out to Gerrit Jan Van de Wygerd. Some of the said cheques were filed as exhibits and are unendorsed but have typed on the back “For deposit only to Account 3133-870 Montreal CIL Branch”. Most have the initials, however, under this of what appear to be J V de Wygerd. This is particularly so with respect to the cheque of August 21, 1982, for $2,700 for six months’ rent on which his name is typed in with the initials above. This is of course after the death of the intervenant which apparently took place in September 1980. Johannes Van de Wygerd as executor of his mother’s estate should most certainly have notified the Bank of her death and not continued to operate her bank account as if she were still alive, not even advising the lessees of her death. However all correspondence after the date of her death, although signed by him, does not indicate that he is signing on behalf of his mother. He uses the term “we” throughout all this correspondence which might perhaps be taken as referring to the beneficiaries of her estate. Since he also had power of attorney for her along with the defendant Gerrit Jan Van de Wygerd during her lifetime and he claims to be the executor of her estate there is no indication that he has done anything fraudulent. In fact even during her lieftime it was he who appears to have carried on most of the correspondence, the typed letters either being initialled by him or signed by his mother the intervenant during her lifetime, the defendant Gerritt Jan Van de Wygerd corresponding primarily with respect to the proceedings against him. It may well be that Johannes and his brother Gerrit are the beneficiaries of their mother’s estate and this may be why he has not advised the bank nor produced any documentation for transfer of the bank account nor registered any will or declaration of transmission with respect to the property with which we are concerned as, if Gerrit inherited an interest in the property as one of the heirs of this mother such interest could then be seized whether or not the sale of the property by him to his mother was fraudulent as plaintiff contends. The same would apply to the bank account or rental payments. While this may explain the reason for the total failure to take any steps in Canada with respect to the death of the intervenant, although two and one half years have elapsed, it is purely speculative and cannot form the basis of a judgment. All that can be said is that the Court, having been advised that the mother is dead and no steps having been taken to continue the suit by her representatives despite extensive correspondence and advise from plaintiff’s counsel and information for the Registry of this Court as to the appropriate procedure, no consideration can now be given to the contestation by the intervenant.

This would dispose of the matter save for the fact that defendant Gerrit Jan Van de Wygerd himself made substantially the same allegations in his contestation of the seizure. Since he is still alive and therefore a party to the proceedings, although unrepresented either in person or by counsel these allegations have to be considered, which is why the evidence to which reference has been made was permitted.

It is especially significant that the tax certificate was only registered on November 25, 1976, some three months after the sale of the property in question by defendant to his mother, the intervenant. While the certificate was for taxes for 1973, 1974 and 1975 years and he would no doubt be aware of the said indebtedness at the time of the sale to his mother, the fact remains that he was still free to dispose of his assets, and if he used the proceeds of the sale to his mother to re-establish the bank account of his company Tradex Marine following a payment by that company to its creditor and then immediately withdrew the sums received in payment for the property sale from his mother for undisclosed purposes this does not of itself indicate a fraudulent sale. In fact the documents indicate clearly that the intervenant did actually pay the purchase price which may have been somewhat below the market value since the property was first listed for $125,000 which was later reduced to $95,000, but sale was never effected even at the reduced figure. The intervenant may well have purchased the property from him to accommodate him and provide him with funds which he required, since, as the property was immediately listed for sale by her it appears that she did not wish to retain ownership of it. Defendant Gerrit Jan Van de Wygerd acted as her duly authorized agent in connection with listings with the real estate company, although some of the documentation is also signed by her personally. There is nothing surprising nor improper in this, however, since she was elderly and in the Netherlands while he was in Montreal at the time. It is not surprising that an elderly woman should allow her son or sons to represent her in business transactions. The sale by defendant to her was certainly not an arm’s length transaction, but that does not of itself indicate that it was fraudulent or done with intent to avoid payment by plaintiff of a tax liability which had not yet been confirmed by registration of the tax certificate. The funds arising from the sale were used by Gerrit Jan Van de Wygerd for his own purposes but there is no legal obligation to pay taxes rather than use available funds for business or personal purposes. The fact is that he sold an asset and received payment for it at a price probably somewhat lower than its real value in a normal non arm’s length transaction. In all other respects the sale appears to be valid and not fraudulent. Even in the absence of defendant therefore the defence must be maintained and plaintiff’s seizure set aside and the Registry Office for the Registration Division of Montreal be ordered to record the judgment to be rendered here and radiate the privilege charge registered against the property in the books of record in the Registry Office. Under the circumstances there will be no costs.