Royal Bank of Canada v. Samra et al.,

• Judge: Mason
• Neutral Citation: 2010 ABQB 699
• Subject Matter: EXECUTION,INCOME TAX,CROWN
• Citation: 2010 ABQB 699,(2010), 503 A.R. 256 (QBM),503 AR 256,(2010), 503 AR 256 (QBM),503 A.R. 256
• Date: 13 September 2010
• Court: Court of Queen's Bench of Alberta (Canada)

Royal Bk. v. Samra (2010), 503 A.R. 256 (QBM)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. NO.082

Royal Bank of Canada (plaintiff) v. Gurtej Samra, Bedaux Real Estate Inc., Khadim Hussain and Amtul Hussain (defendants)

(0901 03784; 2010 ABQB 699)

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

Alberta Court of Queen's Bench

Judicial District of Calgary

Mason, Master

November 8, 2010.

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; (3) whether the Crown had waived its prerogative.

A Master of the Alberta Court of Queen's Bench 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.

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 of the Alberta Court of Queen's Bench stated that the registration of the Crown's writ in Alberta accorded the certificate the status of a writ under the Civil Enforcement Act - The hallmark of a writ under the Act was pro rata sharing - The benefit gained by the Crown's registration was not purely defensible - Rather, the Crown actively relied on its registration to secure positive rights - Through the registration it attained status as a creditor and was entitled to notification and orderly payment of funds - That benefit was sufficiently linked to the related burden of pro rata sharing for the benefit/burden exception to Crown immunity to apply - By filing and relying on the writ, the Crown waived its prerogative of priority of payment - See paragraphs 29 to 47.

Crown - Topic 2261

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

Crown - Topic 2261

Crown privilege or prerogative - Priority of payment - General - Section 223 of the Income Tax Act dealt with, inter alia, issuance and registration of certificates and creation of charges on the property of debtors - A Master of the Alberta Court of Queen's Bench stated that s. 223 authorized the federal Crown to access the procedures available in the superior courts of the provinces for enforcement of writs - It did not go further and express that the Crown thereby gave up its prerogative of priority of payment among claims of equal degree - It did not in substance detract from that prerogative - Something more would be needed to achieve that result - See paragraphs 18 to 28.

Crown - Topic 3205

Prerogative remedies - Waiver of - [See Crown - Topic 410 ].

Execution - Topic 428

General principles - Priorities - Crown - [See Crown - Topic 410 and second Crown - Topic 2261 ].

Execution - Topic 1088

Writ of execution - Priorities and property affected - Crown - [See second Crown - Topic 2261 ].

Execution - Topic 1088

Writ of execution - Priorities and property affected - Crown - A Master of the Alberta Court of Queen's Bench held that, in the absence of a waiver, the rateable sharing regime set out in s. 99 of the Alberta Civil Enforcement Act did not bind the federal Crown - See paragraphs 8 to 16.

Income Tax - Topic 9326

Enforcement - Judgments - Certificate of Minister - General - [See Crown - Topic 410 and second Crown - Topic 2261 ].

Cases Noticed:

MacCulloch & Co., Calkin (T.P.) 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, refd to. [para. 6].

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

Royal Bank of Canada v. Bisset (2005), 386 A.R. 392; 14 C.B.R.(5th) 222; 2005 ABQB 700 (Master), refd to. [para. 6].

Gauthier v. R. (1918), 56 S.C.R. 176, refd to. [para. 13].

Pacific Western Airlines Ltd., Re, [1978] 1 S.C.R. 61; 14 N.R. 211; 2 A.R. 539, refd to. [para. 13].

R. v. Canadian Transport Commission - see Pacific Western Airlines Ltd., Re.

Investors Group Trust Co. v. Eckhoff et al., [2008] 9 W.W.R. 306; 307 Sask.R. 164; 417 W.A.C. 164 (C.A.), refd to. [para. 23].

Mutter (Bankrupt), Re (2010), 485 A.R. 175; 2010 ABQB 312, refd to. [para. 26].

Royal Bank of Canada v. Black and White Developments Ltd. (1988), 88 A.R. 340 (C.A.), dist. [para. 30].

Agriculture Financial Services Corp. v. Redmond (1999), 237 A.R. 152; 197 W.A.C. 152; 1999 ABCA 175, refd to. [para. 32].

CNCP Telecommunications v. Alberta Government Telephones and CRTC, [1989] 2 S.C.R. 225; 98 N.R. 161, refd to. [para. 32].

Sparling v. Quebec, [1988] 2 S.C.R. 1015; 89 N.R. 120; 20 Q.A.C. 174, refd to. [para. 34].

Canadian Commercial Bank (Liquidation), Re (1989), 105 A.R. 307 (C.A.), refd to. [para. 38].

Alberta v. Canadian Commercial Bank - see Canadian Commercial Bank (Liquidation), Re.

Hongkong Bank of Canada v. Canada (1989), 58 D.L.R.(4th) 385 (B.C.C.A.), refd to. [para. 41].

Crowther v. Canada (Attorney General) (1959), 17 D.L.R.(2d) 437 (N.S.S.C.), refd to. [para. 42].

Marten, Re (1981), 40 C.B.R.(N.S.) 46 (Ont. S.C.), refd to. [para. 42].

Resmor Trust Co. v. Wood (2006), 410 A.R. 355; 2006 ABQB 841 (Master), refd to. [para. 44].

Statutes Noticed:

Civil Enforcement Act, R.S.A. 2000, c. C-15, sect. 99 [para. 16]; sect. 223 [para. 28].

Authors and Works Noticed:

Alberta, Law Reform Institute, The Presumption of Crown Immunity, Report No. 71 (1994), p. 134 [para. 15].

Hogg, Peter W., Constitutional Law of Canada (5th Ed.) (Looseleaf Supp.), pp. 10 to 19, 20 [para. 13].

Counsel:

Jill Medhurst-Tivadar (Justice Canada), for the applicant, Her Majesty the Queen as represented by the Minister of National Revenue;

Inna Lazman (Fleming LLP), for the respondents, Liberty Mortgage Services Ltd. and DJ Will Holdings Ltd.

This application was heard in Chambers on September 13, 2010, by Mason, Master, of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following memorandum of decision on November 8, 2010.