Canada (National Revenue) v. Shaker

Canada (National Revenue) v. Shaker

The interim charge was discharged because a trustee's legal title to trust property does not constitute an 'interest in real property' under Rule 458 for the purpose of charging trust property to satisfy the trustee's personal tax debt; trust property is not available to the trustee's personal creditors and the Rule must be applied consistent with trust law distinctions between legal and beneficial ownership.

Citation
2022 FC 408
Parties
Applicant / Judgment Debtor / Moving Party: Charles Shaker; Respondent / Judgment Creditor: Attorney General of Canada on behalf of Her Majesty the Queen in Right of Canada (Canada Revenue Agency)
Court
Federal Court
Jurisdiction
Canada
Judgment Date
24 March 2022
Procedural Posture
Tax Enforcement Charging Order Under Income Tax Act / Show Cause Hearing on Interim Charge (rule 458); Motion to Discharge Under Rule 462
Outcome
Motion granted. Interim Charge discharged. Respondents' request to pay net proceeds into court refused. Costs awarded to Mr. Shaker in the amount of CAD 12,000.00.
Legal Topics
Charging Order, Trustee Liability, Beneficial Vs Legal Ownership, Interim Charge, Costs
Source Language
English
Trusts Tax Law Civil Procedure Property Law Charging Order Trustee Liability Beneficial Vs Legal Ownership Interim Charge +1 more

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Parties

Charles Shaker

Applicant / Judgment Debtor / Moving Party

Attorney General of Canada on behalf of Her Majesty the Queen in Right of Canada (Canada Revenue Agency)

Respondent / Judgment Creditor

Procedural Posture

Tax Enforcement Charging Order Under Income Tax Act / Show Cause Hearing on Interim Charge (rule 458); Motion to Discharge Under Rule 462

Legal Issues

  1. 1 Whether an interim charging order under Rule 458 should be made absolute or discharged where the judgment debtor's only interest in the charged property is as a trustee
  2. 2 Whether the court should order payment into court of net proceeds of sale pending cross-examination to determine existence of any beneficial interest

Ratio Decidendi

The interim charge was discharged because a trustee's legal title to trust property does not constitute an 'interest in real property' under Rule 458 for the purpose of charging trust property to satisfy the trustee's personal tax debt; trust property is not available to the trustee's personal creditors and the Rule must be applied consistent with trust law distinctions between legal and beneficial ownership.

Court Disposition

Motion granted. Interim Charge discharged. Respondents' request to pay net proceeds into court refused. Costs awarded to Mr. Shaker in the amount of CAD 12,000.00.

Orders

  • Motion to set aside the Interim Charge is granted
  • Interim Charge against Blue Jays Way Property (PIN 12555-0192 (LT)) is discharged