[2]
At the hearing of the
motion, the Court directed that further written submissions be filed to address
the issue of the Court’s jurisdiction in respect to the relief sought and
particularly whether proceeding by way of motion was the proper procedure.
[3]
The parties filed
their written submissions and supporting materials on May 25, 2010 as directed.
Background
[4]
The applicant,
Ms. Kaur, is indebted to Her Majesty the Queen in Right of Canada in the amount
of $455,169.64 (and related interest) under the Excise Tax Act, R.S.C.
1985, c. E-15 (ETA) (the tax debt). The notice of assessment was issued on
December 24, 2009. On April 6, 2010, a certificate was registered with respect
to the tax debt in the Federal Court, pursuant to subsection 316(2) of the ETA (Federal
Court No. GST-2486-10).
[5]
On April
27, 2010, pursuant to subsection
316(4) of the ETA, a lien was registered against seven of the applicant’s
properties in British
Columbia.
Applicant’s
position
[6]
The applicant claims
that she is not the beneficial owner of four of the seven properties (the
disputed properties) but holds them as a bare trustee for other entities. These
properties are:
1. City of Vancouver, PID 026-091-569;
2. City
of Vancouver, PID 026-091-534;
3. City
of Coquitlam, PID 002-249-812;
4. Village
of Anmore PID 027-687-279.
[7]
The applicant
contends that since she is not the beneficial owner of the disputed properties,
it is not open to the respondent to execute against the said properties.
Further, she maintains that as a result of the execution proceedings initiated
by the respondent, the beneficial owners of the disputed properties are
suffering prejudice and financial harm.
[8]
The applicant
argues that the Federal Court has jurisdiction to deal with her request because
the motion relates to
the enforcement of the certificate, a judgment of the Federal Court. She argues
that pursuant to Rule 423 of the Federal Courts Rules, SOR/2004-283, s.
2, all matters relating to enforcement of orders must be brought before
the Federal Court.
[9]
The applicant
further argues that the Court has the jurisdiction to grant a mandamus order
sought, in this case, pursuant to subsection 17(5) and section 44 of the Federal
Courts Act, 2002, c. 8, s. 14. Alternatively, the applicant
requests the Court issue either or both of the following: an order granting a
stay of execution of the certificate against the disputed properties; and/or a
declaration that the applicant has no beneficial interest in the disputed
properties.
Respondent’s position
[10]
The respondent’s position
is that the applicant cannot obtain the relief sought on an interlocutory
motion. The respondent argues that
mandamus is an extraordinary remedy which can only be obtained on
application for judicial review made under section 18.1 of the Federal Courts
Act. Further, the respondent
invites the Court to exercise its discretion and decline jurisdiction in favour
of that available under provincial jurisdiction. It is submitted that this is a
matter concerning enforcement procedures set out in provincial legislation,
namely, the Court Order Enforcement Act (the COEA) which provides for
the registration of a judgment under the British
Columbia Land Title Act,
R.S.B.C. 1996 c. 250.
[11]
Alternatively, should
the Court exercise jurisdiction and regardless of the procedural vehicle, the respondent
seeks an adjournment, full documentary disclosure, an examination for discovery
and viva voce testimony. The respondent argues the credibility of the applicant
will need to be tested.
Legal Framework
[12]
Subsections
316(1) to 316(4) of the ETA state:
|
316.
(1) Any tax, net tax, penalty, interest or other amount payable or remittable
by a person (in this section referred to as the “debtor”) under this Part, or
any part of any such amount, that has not been paid or remitted as and when
required under this Part may be certified by the Minister as an amount
payable by the debtor.
(2) On
production to the Federal Court, a certificate made under subsection (1) in
respect of a debtor shall be registered in the Court and when so registered
has the same effect, and all proceedings may be taken thereon, as if the
certificate were a judgment obtained in the Court against the debtor for a
debt in the amount certified plus interest and penalty thereon as provided
under this Part to the day of payment and, for the purposes of any such
proceedings, the certificate shall be deemed to be a judgment of the Court
against the debtor for a debt due to Her Majesty and enforceable as such.
(3)
All reasonable costs and charges incurred or paid in respect of the
registration in the Court of a certificate made under subsection (1) or in
respect of any proceedings taken to collect the amount certified are
recoverable in like manner as if they had been included in the amount
certified in the certificate when it was registered.
(4) A
document issued by the Federal Court evidencing a certificate in respect of a
debtor registered under subsection (2), a writ of that Court issued pursuant
to the certificate or any notification of the document or writ (such
document, writ or notification in this section referred to as a “memorial”)
may be filed, registered or otherwise recorded for the purpose of creating a
charge, lien or priority on, or a binding interest in, property in a
province, or any interest in such property, held by the debtor in the same
manner as a document evidencing
(a) a
judgment of the superior court of the province against a person for a debt
owing by the person, or
(b) an
amount payable or required to be remitted by a person in the province in
respect of a debt owing to Her Majesty in right of the province
may be
filed, registered or otherwise recorded in accordance with or pursuant to the
law of the province to create a charge, lien or priority on, or a binding
interest in, the property or interest.
…
|
316.
(1) Tout ou partie des taxes, taxes nettes, pénalités, intérêts ou autres
montants à payer ou à verser par une personne — appelée « débiteur » au
présent article — aux termes de la présente partie qui ne l’ont pas été selon
les modalités de temps ou autres prévues par cette partie peuvent, par
certificat du ministre, être déclarés payables par le débiteur.
(2)
Sur production à la Cour fédérale, le certificat fait à l’égard d’un débiteur
y est enregistré. Il a alors le même effet que s’il s’agissait d’un jugement
rendu par cette cour contre le débiteur pour une dette du montant attesté
dans le certificat, augmenté des intérêts et pénalités courus comme le
prévoit la présente partie jusqu’au jour du paiement, et toutes les
procédures peuvent être engagées à la faveur du certificat comme s’il
s’agissait d’un tel jugement. Aux fins de ces procédures, le certificat est
réputé être un jugement exécutoire de la Cour contre le débiteur pour une
créance de Sa Majesté.
(3)
Les frais et dépens raisonnables engagés ou payés pour l’enregistrement à la
Cour fédérale d’un certificat ou de l’exécution des procédures de perception
du montant qui y est attesté sont recouvrables de la même manière que s’ils
avaient été inclus dans ce montant au moment de l’enregistrement du
certificat.
(4) Un
document délivré par la Cour fédérale et faisant preuve du contenu d’un
certificat enregistré à l’égard d’un débiteur en application du paragraphe
(2), un bref de cette cour délivré au titre du certificat ou toute notification
du document ou du bref (ce document ou bref ou cette notification étant
appelé « extrait » au présent article) peut être produit, enregistré ou
autrement inscrit en vue de grever d’une sûreté, d’une priorité ou d’une
autre charge un bien du débiteur situé dans une province, ou un droit sur un
tel bien, de la même manière que peut l’être, au titre ou en application de
la loi provinciale, un document faisant preuve :
a)
soit du contenu d’un jugement rendu par la cour supérieure de la province
contre une personne pour une dette de celle-ci;
b)
soit d’un montant payable ou à remettre par une personne dans la province au
titre d’une créance de Sa Majesté du chef de la province.
[…]
|
Analysis
[13]
For the
following reasons, I am satisfied the Court has jurisdiction to dispose of the
questions raised on the within motion.
[14]
The motion
concerns relief against execution of a registered certificate, which by law is
a deemed judgment of this Court (subsection 316(2) of the ETA).
[15]
The main
issue on the motion is whether the respondent can execute against the applicant’s
interest in the disputed properties. In order to determine this issue, the
Court will need to consider the various interests in the disputed properties,
including the effects of the impugned trust agreements.
[16]
These
issues, to be decided, are in my view incidental to the Court’s power to ensure
the execution of its judgments (Le
Bois de Construction du Nord (1971) Ltée v. The Queen, [1986] 2 CTC 227 (F.C.A.), at 233; Canada (Minister of
National Revenue) v. Gadbois, 2002 FCA 28, at paras. 14 and 27).
[17]
Although the relief requested by the applicant in her
notice of motion is framed in the nature of mandamus, it
is in reality a request for an order discharging a lien against the
disputed properties. The applicant should not be denied an
appropriate remedy when the substance of the relief requested is
clear.
[18]
In
my view, it is open to the Court to grant such relief on an
interlocutory basis, in the appropriate circumstances. The matter can be
adequately dealt with by way of a motion, and need not proceed by way of
an application.
[19]
Further,
the issue of whether the respondent can execute against the applicant’s
interest in the disputed properties can be adequately argued on the basis of
documentary evidence, affidavit evidence and cross-examination of the affiant (Gadbois,
at para. 29). The respondent has the right to cross-examine the applicant
on her affidavit, pursuant to Rule 83 of the Federal Courts Rules. To
that end, the respondent’s request for an adjournment will be granted. Following
the cross-examination of the applicant, it will be open to the respondent to
seek leave from the Court for further disclosure, if the respondent so
requires.
ORDER
THIS COURT ORDERS that
1. The parties are to
proceed with the cross examination of the applicant’s affidavit as soon as
possible and, in any event, no later than within two weeks of the date of the
within reasons for order and order.
2. Subsequent to the
cross examination, it will be open for either party to request that the matter
be set down for hearing.
“Edmond P. Blanchard”
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