Canada (National Revenue) v. Baroud

Canada (National Revenue) v. Baroud

The escrow agreements did not remove the sale proceeds from the judgment debtor's patrimony or create a trust/patrimony by appropriation that could defeat enforcement; a garnishment after judgment prevails over a garnishment before judgment; accordingly the garnishee notaries are liable to account and pay the proceeds to Her Majesty, and the third parties' challenge is dismissed with costs.

Citation
2011 FC 508
Parties
Judgment Creditor: Canada (National Revenue); Judgment Debtor: Tony Baroud; Garnishee (notary): Charles Toupin; Garnishee (notary): Francine Lewis; Garnishee (notary): Richard Lupien; Third Party Plaintiff: 9210-5089 Québec Inc.; Third Party Plaintiff: Fatima Abdelmoutalib
Court
Federal Court
Jurisdiction
Canada
Judgment Date
2 May 2011
Procedural Posture
Income Tax Garnishment Enforcement Arising From Certificate Under the Income Tax Act / Decision on Third Parties' Challenge to Interim Garnishment; Final Garnishment Order Issued
Outcome
Third parties' challenge dismissed; final garnishment order issued in favour of Her Majesty (Canada (National Revenue)); costs awarded against the third parties.
Legal Topics
Garnishment Before Judgment, Garnishment After Judgment, Escrow Agreements, Priority of Creditors, Liability of Garnishee Notaries, Income Tax Act Enforcement
Source Language
English
Tax Law Civil Procedure Garnishment Law Trusts and Escrow Garnishment Before Judgment Garnishment After Judgment Escrow Agreements Priority of Creditors +2 more

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Parties

Canada (National Revenue)

Judgment Creditor

Tony Baroud

Judgment Debtor

Charles Toupin

Garnishee (notary)

Francine Lewis

Garnishee (notary)

Richard Lupien

Garnishee (notary)

9210-5089 Québec Inc.

Third Party Plaintiff

Fatima Abdelmoutalib

Third Party Plaintiff

Procedural Posture

Income Tax Garnishment Enforcement Arising From Certificate Under the Income Tax Act / Decision on Third Parties' Challenge to Interim Garnishment; Final Garnishment Order Issued

Legal Issues

  1. 1 Effect of escrow agreements on proceeds of sale subject to garnishment before judgment
  2. 2 Priority between garnishment before judgment and garnishment after judgment
  3. 3 Whether garnishee notaries are liable to the judgment debtor for amounts held in escrow and therefore payable to the judgment creditor

Ratio Decidendi

The escrow agreements did not remove the sale proceeds from the judgment debtor's patrimony or create a trust/patrimony by appropriation that could defeat enforcement; a garnishment after judgment prevails over a garnishment before judgment; accordingly the garnishee notaries are liable to account and pay the proceeds to Her Majesty, and the third parties' challenge is dismissed with costs.

Court Disposition

Third parties' challenge dismissed; final garnishment order issued in favour of Her Majesty (Canada (National Revenue)); costs awarded against the third parties.

Orders

  • Dismissal of the third parties' challenge to the garnishment proceedings
  • Garnishee notaries (Charles Toupin, Francine Lewis, Richard Lupien) held liable to the judgment debtor and ordered to pay amounts owing to Her Majesty (Canada (National Revenue))