Royal Bank of Canada v. Samra et al., (2012) 533 A.R. 356

• Judge: Paperny, Slatter and O'Ferrall, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: June 14, 2012
• Citations: (2012), 533 A.R. 356;2012 ABCA 225

Royal Bk. v. Samra (2012), 533 A.R. 356; 557 W.A.C. 356 (CA)

MLB headnote and full text

Temp. Cite: [2012] A.R. TBEd. JL.080

Royal Bank of Canada (not a party to the appeal/plaintiff) v. Gurtej Samra and Bedaux Real Estate Inc. and Khadim Hussain and Amtul Hussain (not a party to the appeal/defendant) and Liberty Mortgage Services Ltd. and DJ Will Holdings Limited (respondents/appellants) and Her Majesty the Queen in Right of Canada as Represented by the Minister of National Revenue (appellant/respondent)

(1101-0285-AC; 2012 ABCA 225)

Indexed As: Royal Bank of Canada v. Samra et al.

Alberta Court of Appeal

Paperny, Slatter and O'Ferrall, JJ.A.

July 19, 2012.

Summary:

A mortgagor defaulted on his mortgage and the mortgaged lands were sold by judicial process in this foreclosure action. After payment of the mortgage and costs, the balance was paid into court. Several writs were registered on title following the mortgage, including those filed by Her Majesty the Queen, as represented by the Minister of National Revenue. Her Majesty the Queen applied for an order directing that the money be paid to the Receiver General of Canada based on the Crown prerogative of priority to payment among creditors of equal degree. Two of the other creditors opposed the Crown's priority and asserted that the Crown had to share pro rata along with the other writ holders pursuant to s. 99(3)(g) of the Alberta Civil Enforcement Act (CEA) and as contemplated by s. 223 of the Income Tax Act (ITA). The following issues arose: (1) whether s. 99(3)(g) of the CEA was binding on the federal Crown in these circumstances; (2) whether s. 223 of the ITA contemplated the application of s. 99(3)(g) of the CEA to the federal Crown; and (3) whether the Crown had waived its prerogative.

A Master of the Alberta Court of Queen's Bench, in a decision reported at 503 A.R. 256, held that (1) the CEA did not bind the federal Crown in these circumstances; (2) s. 223 of the ITA did not contemplate the application of the priority provisions of the CEA to the federal Crown; and (3) the Crown had waived its prerogative. Accordingly, the Crown did not have priority to the funds. Her Majesty the Queen appealed.

The Alberta Court of Queen's Bench, in a decision reported at 527 A.R. 233, dismissed the appeal. Her Majesty the Queen appealed.

The Alberta Court of Appeal allowed the appeal. The Crown was entitled to payment.

Crown - Topic 410

Statutes affecting the Crown - General principles - Where Crown accepts benefits - The federal Crown issued a certificate in respect of a debtor's unpaid taxes - The Crown registered the certificate in the Federal Court resulting in it being deemed to be a Federal Court judgment - The Crown filed the writ in the Alberta Land Titles System and Personal Property Registry - The debtor's property was sold in a foreclosure action - After payment of the mortgage and costs, the balance was paid into court - The Crown claimed priority to the funds based on its prerogative of priority to payment among creditors of equal degree - A Master applied the benefit/burden test and concluded that, in filing its writ of execution under the Civil Enforcement Act, the Crown had taken the benefit of the statutory scheme and had to also take the burden thereof, which included the pro rata sharing with other writ holders under s. 99(3)(g) - The Queen's Bench affirmed the decision - The Alberta Court of Appeal allowed the Crown's appeal - Section 99(3)(e) of the Act gave priority of distribution to " ... eligible claims that by virtue of any other enactment or law in force in Alberta are entitled to priority over the eligible claims of enforcement creditors generally" - Section 99(3)(e) preserved the common law prerogative for priority of payment, provided that the Crown's and the subject's claims were of equal degree - All the competing claims were registered as writs against title - There was no suggestion or basis to suggest that the other creditors' claims took precedence over the Crown's claim - The claims were of equal degree - Therefore, reliance on the Act's mechanisms did not eliminate the Crown prerogative by virtue of the terms of the Act.

Crown - Topic 2261

Crown privilege or prerogative - Priority of payment - General - [See Crown - Topic 410 ].

Execution - Topic 428

General principles - Priorities - Crown - [See Crown - Topic 410 ].

Income Tax - Topic 9326

Enforcement - Judgments - Certificate of Minister - General - [See Crown - Topic 410 ].

Cases Noticed:

CNCP Telecommunications v. Alberta Government Telephones and CRTC, [1989] 2 S.C.R. 225; 98 N.R. 161; 61 D.L.R.(4th) 193, refd to. [para. 7].

Sparling v. Quebec, [1988] 2 S.C.R. 1015; 89 N.R. 120; 20 Q.A.C. 174; 55 D.L.R.(4th) 63, refd to. [para. 7].

Hongkong Bank of Canada v. Canada (1989), 58 D.L.R.(4th) 385 (B.C.C.A.), refd to. [para. 7].

Bahcheli v. Yorkton Securities Inc. et al. (2012), 524 A.R. 382; 545 W.A.C. 382; 2012 ABCA 166, refd to. [para. 8].

R. v. Bank of Nova Scotia (1885), 11 S.C.R. 1, refd to. [para. 12].

MacCulloch & Co., T.P. Calkin Ltd. and Royal Bank of Canada v. Canada (Attorney General) et al., [1980] 1 S.C.R. 423; 29 N.R. 174; 34 N.S.R.(2d) 583; 59 A.P.R. 583; 105 D.L.R.(3d) 266, refd to. [para. 12].

Household Realty Corp. v. Canada (Attorney General) - see MacCulloch & Co., T.P. Calkin Ltd. and Royal Bank of Canada v. Canada (Attorney General).

Royal Bank of Canada v. Bisset (2005), 386 A.R. 392; 2005 ABQB 700 (Master), refd to. [para. 14].

Royal Bank of Canada v. Black & White Developments Ltd. (1988), 88 A.R. 340; 52 D.L.R.(4th) 120 (C.A.), not folld. [para. 15].

Marten, Re (1981), 34 O.R.(2d) 399 (Div. Ct.), refd to. [para. 19].

Farley v. Badley (1991), 97 Sask.R. 21; 12 W.A.C. 21; 87 D.L.R.(4th) 178 (C.A.), refd to. [para. 19].

CNCP Telecommunications v. Alberta Government Telephones and CRTC, [1989] 2 S.C.R. 225; 98 N.R. 161; 68 Alta. L.R.(2d) 1, refd to. [para. 22].

Alberta Government Telephones v. CRTC - see CNCP Telecommunications v. Alberta Government Telephones and CRTC.

Statutes Noticed:

Civil Enforcement Act, R.S.A. 2000, c. C-15, sect. 99(3)(e) [para. 9].

Authors and Works Noticed:

Alberta, Law Reform Institute, Enforcement of Money Judgments, Report No. 61 (1991), vol. 1, pp. 351 [para. 26]; 355 [para. 30]; 356 [paras. 30, 31].

Mirth, E., Case Comment on CNCP Telecommunications v. Alberta Government Telephones and CRTC (1989), 68 Alta. L.R.(2d) 83 [para. 19].

Counsel:

J. Medhurst-Tivadar, for the appellant;

I. Lazman, for the respondents.

This appeal was heard on June 14, 2012, by Paperny, Slatter and O'Ferrall, JJ.A., of the Alberta Court of Appeal. Paperny, J.A., delivered the following reasons for judgment reserved for the court on July 19, 2012.