Canada (Minister of National Revenue) c. Entreprises Forestières PS Inc.

Canada (Minister of National Revenue) c. Entreprises Forestières PS Inc.

The appeal is dismissed because art. 604 C.C.P. bars a hypothecary creditor from taking seized property in payment once another creditor has effected a seizure; such creditors are limited to claiming against the proceeds of sale, rendering Newcourt's objection under art. 597 C.C.P. inadmissible. It was unnecessary to decide the constitutional or full scope issues of s. 227(4.1) ITA, though the prothonotary's interpretation that the Crown could assert priority was accepted as unnecessary to resolve the appeal.

Citation
2002 FCT 968
Parties
Respondent / Plaintiff: Canada (Minister of National Revenue); Judgment Debtor: Les Entreprises Forestières P.S. Inc.; Objector Appellant: Newcourt Financial Ltd.
Court
Federal Court
Jurisdiction
Canada
Judgment Date
13 September 2002
Procedural Posture
Tax Enforcement Seizure in Execution Appeal / Appeal From Prothonotary Order (motion to Judge)
Outcome
Appeal dismissed with costs
Legal Topics
Deemed Trust, Seizure in Execution, Hypothec / Taking in Payment, Priority of the Crown, Interplay of Federal and Provincial Law, Third‑party Revendication
Source Language
English
Tax Employment Insurance Civil Procedure Property Law Constitutional Law Deemed Trust Seizure in Execution Hypothec / Taking in Payment +3 more

Case Brief

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Parties

Canada (Minister of National Revenue)

Respondent / Plaintiff

Les Entreprises Forestières P.S. Inc.

Judgment Debtor

Newcourt Financial Ltd.

Objector Appellant

Procedural Posture

Tax Enforcement Seizure in Execution Appeal / Appeal From Prothonotary Order (motion to Judge)

Legal Issues

  1. 1 Whether a hypothecary creditor can take seized property in payment after a seizure by another creditor or is limited to claiming proceeds under art. 604 C.C.P.
  2. 2 Whether Newcourt acquired ownership of the seized timberjack via prior notice and voluntary surrender under arts. 2757 et seq., 2764 and 2783 C.C.Q.
  3. 3 Whether subsections 227(4) and 227(4.1) ITA (deemed trust) defeat provincial property rights and give the Crown priority over secured creditors

Ratio Decidendi

The appeal is dismissed because art. 604 C.C.P. bars a hypothecary creditor from taking seized property in payment once another creditor has effected a seizure; such creditors are limited to claiming against the proceeds of sale, rendering Newcourt's objection under art. 597 C.C.P. inadmissible. It was unnecessary to decide the constitutional or full scope issues of s. 227(4.1) ITA, though the prothonotary's interpretation that the Crown could assert priority was accepted as unnecessary to resolve the appeal.

Court Disposition

Appeal dismissed with costs

Orders

  • Motion in appeal by Newcourt Financial Ltd. dismissed with costs