Canada (National Revenue) v. Digiuseppe

Canada (National Revenue) v. Digiuseppe

The Federal Court dismissed Romspen's appeal because the Prothonotary's factual findings — that DiGiuseppe was the beneficial owner using nominees, that Romspen dealt with or was wilfully blind to him, and that Romspen's accounting was unreliable — were supported by the record and not palpably and overridingly erroneous; consequently the Prothonotary correctly treated the Crown executions as attaching to the properties and properly limited recoverable legal fees under the Mortgages Act.

Citation
2018 FC 1095
Parties
Applicant (mortgage Holder): Romspen Investment Corporation; Respondent (crown Creditor): Her Majesty the Queen as represented by the Minister of National Revenue; Respondent (crown Creditor): Public Prosecution Service of Canada; Assessed Person / Subject of Proceedings: Rocco R. DiGiuseppe
Court
Federal Court
Jurisdiction
Canada
Judgment Date
31 October 2018
Procedural Posture
Appeal From Prothonotary Order Concerning Priority of Surplus Funds From Mortgage Power of Sale / Motion to Federal Court (appeal of Prothonotary Order Dated February 2, 2017)
Outcome
Motion dismissed (appeal of Prothonotary Order dismissed)
Legal Topics
Priority of Claims, Mortgage Power of Sale, Piercing Corporate Veil, Nominee/bare Trustee, Recovery of Legal Fees, Crown Priority, Standard of Review
Source Language
English
Tax Law Property Law Corporate Law Civil Procedure Equity Priority of Claims Mortgage Power of Sale Piercing Corporate Veil +4 more

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Parties

Romspen Investment Corporation

Applicant (mortgage Holder)

Her Majesty the Queen as represented by the Minister of National Revenue

Respondent (crown Creditor)

Public Prosecution Service of Canada

Respondent (crown Creditor)

Rocco R. DiGiuseppe

Assessed Person / Subject of Proceedings

Procedural Posture

Appeal From Prothonotary Order Concerning Priority of Surplus Funds From Mortgage Power of Sale / Motion to Federal Court (appeal of Prothonotary Order Dated February 2, 2017)

Legal Issues

  1. 1 Standard of review applicable to Prothonotary findings
  2. 2 Whether Romspen was wilfully blind to fraud or improper conduct
  3. 3 Whether court properly pierced the corporate veil of 1642848 Ontario Ltd

Ratio Decidendi

The Federal Court dismissed Romspen's appeal because the Prothonotary's factual findings — that DiGiuseppe was the beneficial owner using nominees, that Romspen dealt with or was wilfully blind to him, and that Romspen's accounting was unreliable — were supported by the record and not palpably and overridingly erroneous; consequently the Prothonotary correctly treated the Crown executions as attaching to the properties and properly limited recoverable legal fees under the Mortgages Act.

Court Disposition

Motion dismissed (appeal of Prothonotary Order dismissed)

Orders

  • The motion is dismissed
  • The Respondents shall have their costs in accordance with Column III of Tariff B of the Federal Courts Rules