Attorney General of Canada v. Michael Vecchio, Castlegar Savings Credit Union, Coast Paper Limited, Canadian Imperial Bank of Commerce, [1992] 2 CTC 169

MacDonald, J:—This is an application to confirm a registrar’s report ordering that the interest of the respondent in certain of his lands is liable to be sold under the petitioner's judgments.

The petition and affidavit material filed October 10, 1990 sets out the notices of assessment pursuant to the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") were mailed to the respondent in respect of Her Majesty the Queen in Right of Canada and payable to the Receiver General for Canada. The assessments were then certified by the Minister to the Honourable, the Federal Court of Canada under two certificates filed in that Court as follows:

The certificates in favour of Her Majesty the Queen in Right of Canada were registered in the land title office at Nelson, B.C. as follows:

as charges against the interest of the respondent as owner in fee simple of the following lands:

(a) Lot 2, District Lot 181, Kootenay District, Plan 2473

(b) Lot A, District Lot 181, Kootenay District, Plan 9041

Charge number XB022336 was subsequently renewed on August 17, 1990, as number XD027830.

The petitioner alleges that the amount owing by respondent Vecchio at January 28, 1991 on the Certificate No. ITA1302-88 was $21,151.62 and on Certificate No. ITA 652-90, $2,781.02.

The petitioner sought an order that the aforesaid lands belonging to the respondent, Michael Vecchio, be sold to realize the amounts payable under these two certificates and that the district registrar be empowered to find what lands are liable to be sold towards satisfaction of the certificates and to determine what judgments formed a charge against the said lands and the priorities of same.

The petition came on for hearing before the Supreme Court of British Columbia on November 8, 1990 and the Court ordered a reference before the registrar to:

(a) to find whether the land and premises more particularly described as

(i) Lot 2, District Lot 181, Kootenay District, Plan 2473;

(ii) Lot À, District Lot 181, Kootenay District, Plan 9041;

or any other lands which the judgment debtor, Michael Vecchio, may have an interest in the Land Title Office of Nelson are liable to be sold under the Petitioner's certificates, registered in the Honourable The Federal Court of Canada and having the same force and effect as a judgment obtained in that Honourable Court;

(b) to find what are the nature and particulars of the interest of the judgment debtor in the land and his title to the lands;

(c) to find what judgments form a lien and charge against the lands and priorities between the judgments;

The registrar conducted a hearing pursuant to the aforesaid Supreme Court order and the registrar's report set out the interest of the respondent in certain lands, that is to say Lot 2, District Lot 181, Kootenay District, Plan 2473, and Lot A, District Lot 181, Kootenay District, Plan 9041, were liable to be sold under the petitioner's deemed judgments, and set out how the sale proceeds were to be distributed, that is to say first to taxes, second to the balance owing under the Castlegar Savings Credit Union Mortgages, thirdly to costs, and fourthly to the balance due and owing to the petitioner under its judgments plus interest at such rate as the Court shall determine, the balance of sale proceeds to be distributed pro rata amongst the remaining judgment creditors pursuant to the Creditors Assistance Act.

Are The Two Certificates Registered in the Federal Court of Canada Judgments of that Court?

Pursuant to subsection 168(1) of Chapter 55 of the Act to Amend the Income Tax Act, and other federal statutes, section 223 of the Income Tax Act was repealed and subsections 223(1) (12) substituted therefore. The relevant sections for purposes of this application are subsections 223(1) to (8) and paragraphs 223(12)(a) and (b). These subsections read:

223. (1) Meaning of “amount payable”.—For the purposes of subsection (2), "an amount payable: by a person means any or all of:

(a) an amount payable under this Act by the person;

(b) an amount payable under the Unemployment Insurance Act, 1971 by the person;

(c) an amount payable under the Canada Pension Plan by the person; and

(d) an amount payable by the person under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act,

(2) Certificates.—An amount payable by a person (in this section referred to as a "debtor") that has not been paid or any part of an amount payable by the debtor that has not been paid may be certified by the Minister as an amount payable by the debtor.

(3) Registration in Court.—On production to the Federal Court of Canada, a certificate made under subsection (2) in respect of a debtor shall be registered in the Court and when so registered has the same effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the Court against the debtor for a debt in the amount certified plus interest thereon to the day of payment as provided by law and, for the purposes of any such proceedings, the certificate shall be deemed to be a judgment of the Court against the debtor for a debt due to Her Majesty enforceable in the amount certified plus interest thereon to the day of payment as provided by law.

(4) Costs.—All reasonable costs and charges incurred or paid in respect of the registration in the Court of a certificate made under subsection (2) or in respect of any proceedings taken to collect the amount certified are recoverable in like manner as if they had been included in the amount certified in the certificate when it was registered.

(5) Charge on land.—A document (in this section referred to as a "memorial") issued by the Federal Court of Canada evidencing a certificate in respect of a debtor registered under subsection (3) may be filed, registered or otherwise recorded for the purpose of creating a charge or lien on or otherwise binding land in a province, or any interest therein, held by the debtor in the same manner as a document evidencing a judgment of the superior Court of the province against a person for a debt owing by the person may be filed, registered or otherwise recorded in accordance with the law of the province to create a charge or lien on or otherwise bind land, or any interest therein, held by the person.

(6) Idem.—Where a memorial has been filed, registered or otherwise recorded under subsection (5), a charge or lien is created on land in the province, or any interest therein, held by the debtor, or such land or interest is otherwise bound, in the same manner and to the same extent as if the memorial were a document evidencing a judgment of the superior Court of the province.

(7) Proceedings in respect of memorial.—Where a memorial of a certificate in respect of a debtor registered under subsection (3) is filed, registered or otherwise recorded as permitted under subsection (5), proceedings may be taken in respect thereof, including proceedings

(a) to enforce payment of the amount certified in the certificate, interest thereon and all costs and charges paid or incurred in respect of

(i) the filing, registration or other recording of the memorial, and

(ii) proceedings taken to collect the amount,

(b) to renew or otherwise prolong the effectiveness of the filing, registration or other recording of the memorial,

(c) to cancel or withdraw the memorial wholly or in respect of one or more parcels of land or interests in land affected by the memorial, or

(d) to postpone the effectiveness of the filing, registration or other recording of the memorial in favour of any right, charge or lien that has been or is intended to be filed, registered or otherwise recorded in respect of any land or interest in land affected by the memorial,

in the same manner and subject to the same restrictions and limitations as though the memorial were a document evidencing a judgment of the superior Court of the province except that, where in any such proceeding or as a condition precedent to any such proceeding any order, consent or ruling is required under the law of the province to be made or given by the superior Court of the province or a judge or official thereof and, when so made or given, has the same effect for the purposes of the proceeding as though made or given by the superior Court of the province or a judge or official thereof.

(8) Presentation of documents.—Where a memorial of a certificate registered under subsection (3) is presented for filing, registration or other recording as permitted under subsection (5), or any document relating to the memorial is presented for filing, registration or other recording for the purpose of any proceeding described in subsection (7), to any officer of a superior Court of a province or to any official in the land registry system of a province, it shall be accepted for filing, registration or other recording as though it were a like document issued from the superior Court of the province or prepared in respect of a document evidencing a judgment of the superior Court of the province for the purpose of a like proceeding, as the case may be, except that, where the memorial or document is issued by the Federal Court of Canada or signed or certified by a judge or officer thereof, any affidavit, declaration or other evidence required under the law of the province to be provided with or to accompany the memorial or document in such proceedings shall be deemed to have been provided with or to have accompanied the memorial or document as so required.

(12) Details in certificates and memorials.—Notwithstanding any law of Canada or of a province, in any certificate made under subsection (2) in respect of a debtor, in any memorial evidencing the certificate or in any writ or document issued for the purpose of collecting an amount certified, it is sufficient for all purposes

(a) to set out, as the amount payable by the debtor, the aggregate of amounts payable by the debtor without setting out the separate amounts making up that aggregate; and

(b) to refer to the rate of interest to be charged on the separate amounts making up the amount payable in general terms as interest at the rate prescribed under this Act applicable from time to time on amounts payable to the Receiver General without indicating specific rates of interest to be charged on each of the separate amounts or to be charged for any particular period of time.

Subsection 223(12) sets out that subsections 223(1), (8) and (12) of the 1988 amended Act are applicable with respect to certificates made under the old section 223 of the Income Tax Act after the year 1971, and with respect to documents evidencing such certificates that were issued by the Federal Court of Canada (memorials) filed or registered in a province after 1977, unless and except the certificate was subject of an action pending in court February 10, 1988 or subject of a court decision given on or before that date, then the old section 223 would apply. The amended Income Tax Act was assented to on September 13, 1988. I would conclude that certificates number ITA-1302-88 certified February 25, 1988 would have been certified under the old section 223 of the Income Tax Act. As this certificate was issued after 1971 and as there is no evidence that any action was pending on the certificate before February 10, 1988 or that the certificate was subject of any Court decision on or before February 10, 1988, that the provisions of the current section 223, subsections (1)—(8), and subsection (12) would apply to this certificate.

As certificate number ITA-652-90 was certified December 16, 1989, this was subsequent to the date of ascent September 13, 1988 and the provisions of the current subsections 223(1)-(8) and subsection (12) would apply.

I have referred myself to the old section 223 as contained in the 1985 amendment Act, S.C. 1985, c. 45, section 114. The old subsection 223(2) read as follows:

Judgments.—On production to the Federal Court of Canada, a certificate made under this section shall be registered in the Court and when registered has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the said Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.

In Deputy Sheriff v. Canada (1989), 39 B.C.L.R. (2d) 41 (S.C.) [aff'd, 66 B.C.L.R. (2d) 371, [1992] 4 W.W.R. 432 (C.A.)] D.B. MacKinnon, J. considered the status of a certificate holder under the old subsection 223(2) and stated, at page 44;

Subsection 223(2) of the Income Tax Act provides:

(2) On production to the Federal Court of Canada, a certificate made under this section shall be registered in the Court and when registered has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the said Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.

The question of what is meant by the term "same force and effect” was addressed in Re Jung [1978], 1 F.C. 709, [1977] C.T.C. 630, 77 D.T.C. 5371 (sub nom. Re Taehoon Jung). At page 5377, the trial judge said:

All statutes are to be construed so as to give effect to the intention which is expressed by the words used in the statute. But that is not to be discovered by considering those words in the abstract but by inquiring what is the intention expressed by those words used in a statute with reference to the subject matter and the object with which the statute was enacted.

At page 45, MacKinnon, J. went on to say:

For the purpose of enforcing its rights, I find the holder of this certificate is of equal status to a judgment holder.

The wording of the present subsection 223(3) of the Income Tax Act has the added words: “The certificates shall be deemed to be a judgment of the Court.”

In Hong Kong Bank of Canada v. The Queen et al. (1989), 36 B.C.L.R. 373, Lambert, J.A. stated at page 387:

The Crown's claim was for income taxes. The Crown invoked section 223 of the Income Tax Act, as it existed in 1985:

Certificates

223.1 (1) An amount payable under this Act that has not been paid or such part of an amount payable under this Act as has not been paid may be certified by the Minister.

Judgments

(2) On production to the Federal Court of Canada, a certificate made under this section shall be registered in the Court and when registered has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the said Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.

The claim was certified by the minister and the certificate was produced to the Federal Court and registered in that Court. By that process the certificate was given the same force and effect as a judgment of the Federal Court. But it must be noted that the certificate does not become a judgment of the Federal Court, nor is it deemed to be a judgment of the Federal Court. It merely has the same force and effect as a judgment: see The Queen v. Bolduc, [1961] C.T.C. 265 (Ex. Ct.) and M.N.R. v. Simard, [1962] C.T.C. 310, 62 D.T.C. 1192 (Ex. Ct.).

The Court notes that Lambert, J.A. implies here that there is a difference between a "certificate that has the same force and effect as a judgment of the Federal Court of Canada" and a certificate that is deemed to be a judgment of that Court.

In The Queen v. Verrette, [1978] 2 S.C.R. 838, 3 C.R. (3d) 192, Beetz, J. stated:

A deeming provisions is a Statutory fiction; as a rule it implicitly admits that a thing is not what it is deemed to be but decrees that for some particular purpose it shall be taken as if it were that thing although it is not or there is doubt as to whether it is. A deeming provision artificially imports into a word or an expression an additional meaning which it would not otherwise convey beside the normal meaning which it retains where it is used; it plays a function of enlargement analogous to the word "includes" in certain definitions.

In The Queen v. Sutherland, Wilson and Wilson, [1980] 2 S.C.R. 451, 113 D.L.R. (3d) 374 the Court was concerned with interpretation to be placed on the meaning of section 49 of the Wildlife Act of Manitoba, R.S.M. 1970, section 49 reads:

49. For all purposes in respect of the hunting or killing of wildlife, land set aside or designated as

(a) a refuge;

(b) a provincial recreation area;

(c) a provincial forest;

(d) a wildlife management area; or

(e) a community pasture;

under this Act or under any other Act of the Legislature shall be conclusively deemed to be occupied Crown lands to which Indians do not have a right of access for purposes of exercising any rights bestowed upon them under paragraph 13 of the Memorandum of Agreement approved under the Manitoba Natural Resources Act.

Dickson, J., as he then was, stated at page 379:

The purpose of any "deeming" clause is to impose a meaning, to cause something to be taken to be different from that which it might have been in the absence of the clause. In the present instance, the patent purpose of section 49 is to cause provincial forests, wildlife management areas, and the like, to be regarded as occupied whether or not, on the facts, they can properly be said to be occupied.

In St. Leon Village Consolidated School District No. 1425 v. Ronceray et al. (1960), 31 W.W.R. 385, 23 D.L.R. (2d) 32, Schultz, J. stated at page 391:

21 think a consideration of these cases indicates that in deciding whether or not the use of the words "deem" or" deemed" establishes a conclusive or a rebuttable presumption depends largely upon the context in which they are used, always bearing in mind the purpose to be served by the statute and the necessity of ensuring that such purpose is served.

I would conclude that use of words in subsection 223(3) of the current Income Tax Act"for the purposes of any such proceedings the certificate shall be deemed to be a judgment of the Court" does not actually make the certificate a judgment of the Federal Court of Canada, in the general sense. The certificate is deemed to be a judgment of the Court for a specific purpose, that is to take proceedings against debts on the certificate as if same were a judgment of the Federal Court.

I would conclude that the Attorney General of Canada has done that in this case, he has invoked the provisions of subsections 223(5) and (6) and proceeded to register the certificates (memorial) against the respondent Vecchio's land in B.C. The registrar of land titles in Nelson has recorded this memorial as a judgment and the Attorney General of Canada has taken execution proceedings on the judgment pursuant to provisions of the Court Order Enforcement Act.

What Interest Rate is Payable by the Respondent on these Certificates (deemed judgments)?

There are three time frames that the Court should consider in this issue.

1. The time before the certificate is registered in the Federal Court.

2. The time after the certificate was registered in the Federal Court, but before Revenue Canada begins execution proceedings, and

3. The time after the commencement of execution proceedings.

With regard to the time before the certificate is registered in the Federal Court, subsection 161(1) of the Income Tax Act reads as follows:

General.—Where at any time after the day on or before which a taxpayer is required to pay the remainder of his tax payable under this Part for a taxation year,

(a) the amount of his tax payable for the year under this Part

exceeds

(b) the aggregate of all amounts each of which is an amount paid at or before that time on account of his tax payable and applied as at that time by the Minister against the taxpayer's liability for an amount payable under this Part for the year,

the person liable to pay the tax shall pay to the Receiver General interest at the prescribed rate on the excess computed for the period during which that excess is outstanding.

I would hold it up until the time that the certificates were registered in the Federal Court of Canada, the rate of interest payable on the debt from time to time would be that set out under the Income Tax Act and Regulations. Does this same rate of interest apply after the certificate has been registered in the Federal Court? The old section 223 of the Income Tax Act designated that interest on the amount owing in the certificate was as provided in the Income Tax Act. The 1988 amendment designated that interest on the amount owing in the certificate was to be as provided by law.

Section 41 of the Federal Court Act read :

Unless otherwise ordered by the Court, a judgment, including a judgment against the Crown, bears interest from the time of giving the judgment at the rate prescribed by section 3 of the Interest Act.

It can be argued that the words as provided by law means that the in terms and payable would be that rate set out in section 41 of the Federal Court Act which is prescribed by section 3 of the Interest Act—five per cent.

The Court was presented with a Department of Justice memorandum on judgment interest and in that memorandum the writer submitted that Revenue Canada did not intend the rate of interest to change after the 1988 amendment. He submitted that replacing the words "as provided for in this Act" with words "as provided by law” was consequential to the fact that subsection 223(1) of the Income Tax Act applied, not only to an amount payable under the Income Tax Act, but also became applicable to amounts payable under the Unemployment Insurance Act, Canada Pension Act and an amount payable by the person under an act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under this Act. That no change was intended as to rate of interest after applicable certificates were filed or registered pursuant to section 223 in the Federal Court of Canada.

The Court has referred itself to paragraph 223(12)(b) of the current Income Tax Act. This paragraph reads as follows:

(12) Details in certificates and memorials.—Notwithstanding any law of Canada or of a province, in any certificate made under subsection (2) in respect of a debtor, in any memorial evidencing the certificate or in any writ or document issued for the purpose of collecting an amount certified, it is sufficient for all purposes

(b) to refer to the rate of interest to be charged on the separate amounts making up the amount payable in general terms as interest at the rate prescribed under this Act applicable from time to time on amounts payable to the Receiver General without indicating the specific rates of interest to be charged on each of the separate amounts or to be charged for any particular period of time.

Paragraph 223(12)(b) focuses on simplification of details to be set out in the certificates and memorials, more specifically 223(12)(b) states it is sufficient to describe the rate of interest as that payable under this Act without indicating specific rates of interest. The paragraph does not designate what rate of interest is payable under subsection 223(3).

One has to ask the question, why was parliament not more specific? Why did they not set out that interest would be payable pursuant to the provisions of the Acts set out in subsection 223(1). This argument would have much more weight were it not for the fact that I have found that these two certificates obtained against the respondent Vecchio are not actually judgments of the Federal Court of Canada and they would have to be judgments of the Federal Court of Canada before the provisions of section 41 of the Federal Court Act could apply.

I have concluded that the rate of interest payable by the respondent Vecchio on the two certificates up until the time they were registered in B.C. would be that provided for in the current Income Tax Act.

I go now to the rate of interest payable on the two judgments after the Crown took execution proceedings on these judgments. Subsection 223(5) of the current Income Tax Act read as follows:

(5) Charge on land—a document (in this section referred to as a “ memorial”) issued by the Federal Court of Canada evidencing a certificate in respect of a debtor registered under subsection (3) may be filed, registered or otherwise recorded for the purpose of creating a charge or lien on or otherwise binding land in a province, or any interest therein, held by the debtor in the same manner as a document evidencing a judgment of the superior Court of the province against a person for a debt owing by the person may be filed, registered or otherwise recorded in accordance with the law of the province to create a charge or lien on or otherwise bind land, or any interest therein, held by the person.

Subsection 223(6) of the current Income Tax Act reads as follows:

(6) Idem.—Where a memorial has been filed, registered or otherwise recorded under subsection (5), a charge or lien is created on land in the province, or any interest there, held by the debtor; or such land or interest is otherwise bound, in the same manner and to the same extent as if the memorial were a document evidencing a judgment of the superior Court of the province.

The petitioner, the Attorney General of Canada, availed himself of the provisions of subsections 223(5) and (6) and proceeded to register these two memorials against the lands of the respondents in British Columbia in the land title office in Nelson, B.C. The certificates were not entered in the Supreme Court of British Columbia, they remain certificates (deemed judgments) in the Federal Court of Canada. I would conclude that the interest rate payable under the Income Tax Act for the reasons already set out would still apply until such time as the judgments have been paid.

The Court has been asked to confirm the registrar's report. Paragraph 3 of the report reads as follows:

The sale proceeds after proper adjustments to the sale price shall be distributed as follows:

(a) taxes;

(b) the balance due and owing to the Castlegar Savings Union pursuant to its mortgages registered under numbers W18547 and U16799 respectively, filed in the Nelson Land Title Office;

(c) cost of the petitioner, including costs of sale;

(d) the balance due and owing to the petitioner under its judgments, plus interest at such a rate as the Court shall determine;

(e) the balance of sale proceeds to be distributed prorata amongst the remaining judgment creditors pursuant to the Creditor Assistance Act;

(f) Any remaining sale proceeds to the respondent, Michael Vecchio;

Pursuant to paragraph 3, the registrar has given the Crown priority over the other judgment creditors in that she has provided for payment of the petitioner's judgments out of sale proceeds prior to pro-rata distribution among the remaining judgment creditors.

I have some concern as to whether the Crown, once it has invoked the provisions of the Court Order Enforcement Act, Revised Statutes of B.C. 1979, chapter 75 can claim any priority over other judgment creditors. The material indicates that an order nisi of foreclosure was granted to the Castlegar Saving and Credit Union against the respondent on the subject properties on July 18, 1989 in the Nelson Registry of the Supreme Court of British Columbia. The six- month redemption period granted to the respondent pursuant to the order nisi granted has elapsed and there have been no further steps taken by the Castlegar Saving and Credit Union in the foreclosure proceedings to date.

The following charges and holders of charges are registered against the respective properties of the respondent and I set same out below:

The proceedings herein for an order for sale were not taken in the ongoing foreclosure action, but are proceedings taken under sections 84 through 106, of the Court Order Enforcement Act. The Court has referred itself to a recent decision of the British Columbia Court of Appeal Hong Kong Bank of Canada v. The Queen, supra.

The facts in that case were that the personal defendant was indebted to the federal Crown for income tax. The certificate having the effect of a judgment had been registered in the Federal Court and the judgment was registered against the defendant's interest in certain land in 1985. The plaintiff bank also obtain judgment against the personal defendant for debt. The judgments obtained by other creditors of the defendant were registered later. In 1987, pursuant to an order obtained by the bank in proceedings brought under the Court Order Enforcement Act, the land was sold and the defendant's share of the proceeds was paid into Court. The Crown sought payment to it of the entire fund in Court, claiming priority on the basis that its judgment was registered first or, alternatively, by virtue of the Crown's prerogative. Chambers judge dismissed the application and ordered the funds be distributed rateably among the defendant's creditors. The Crown appealed.

Lambert, J.A. gave the judgment of the Court and at page 379 he stated:

There can be no doubt about the general principle that if there are a number of creditors of equal degree and the Crown is one of them, then subject to contrary legislation, the Crown is entitled to be paid in priority to the other creditors: see Crowther v. the Attorney General of Canada, 42 M.P.R. 269, [1959] I.L.R. 1-326, 17 D.L.R. (2d) 437 (N.S.C.A.), and Household Realty Corp. v. the Attorney General of Canada; MacCulloch & Co. v. the Attorney General of Canada, [1980] 1 S.C.R. 423,9 R.P.R. 145, 105 D.L.R. (3d) 266, 34 N.S.R. (2d) 583, 59 A.P.R. 583, 29 N.R. 174.

However, there are a number of exceptions to the general principle. It may perhaps, be excluded by "necessary implication". It may not apply to the Crown when the Crown is engaged in a ''commercial enterprise". The exception with which we are concerned in this case is the “benefit-burden” exception. The “benefit-burden” exception was recently explained in the reasons of Mr. Justice La Forest for the Supreme Court of Canada in Sparling v. Quebec (Caisse de Dépôt et Placement due Qué.), S.C.C., No. 19377, 15th December 1988 [now reported at 41 B.L.R. 1, 55 D.L.R. (4th) 63, 20 Q.A.C. 174, 89 N.R. 120]. If the Crown has taken advantage of legislation in order to attain its status as a creditor of the same degree as the other creditors over which it is asserting priority, then it cannot have the benefit of that legislation without also being subject to those burdens which are so closely associated with the benefits that they limit the scope of the very right that is being asserted.

In this case it may well have been open to the Crown to issue a writ of execution from the Federal Court and to seek to have the sheriff enforce the writ by sale of Mr. Whitson's interest in land without any involvement with British Columbia legislation. I have not considered fully how that could have been done because the Crown did not adopt that course. Instead it invoked the Court Order Enforcement Act and sought to have its certificate treated as a judgment under that Act and registered as a judgment under that Act. Without that Act, the certificate could not nave been registered in that way. Nor could it have been registered in amy other way against the land. In my opinion, the benefit of registration against land conferred by section 79 of the Court Order Enforcement Act is so closely associated with the requirement of rateable treatment of registered judgment creditors imposed by ss. 103 and 104 of the same Act that the burden of rateable treatment sets the limit on the benefit of registration within the meaning of the Sparling case.

It would seem on the authority of the above-mentioned decision, any distribution of the proceeds of sale of the respondent's properties would, after the mortgagee had been paid out, be on a pro-rata basis between all judgment creditors.

The respondent has applied to the Court to defer the sale of these two properties and to allow the respondent to make monthly payments on his indebtedness as he is presently doing.

Subsection 88(1) of the Court Order Enforcement Act reads as follows:

88 (1).—Where in a summary way or on the trial of an issue, or as the result of inquiries under sections 84 to 87 . . . any land or the interest of any judgment debtor in it is found liable to be sold, an order shall be made by the Court declaring what land or what interest in it is liable to be sold, and directing the sale of it by the sheriff, but where a premises situated on the land . . . is the home of the debtor, the Court may defer the sale, subject to the performance by the judgment debtor of terms and conditions of payment or otherwise as the Court imposes.

In the petition Lot A—D.L. 181—K.D. Plan 9041 is described as a commercial building.

Lot 2—D.L. 181—K.D. Plan 2473 is described as a triplex rental property.

I have perused the affidavit of Michael Vecchio sworn February 1, 1991 and it makes no mention that either of these properties is the matrimonial home.

On the basis of material before Court, the Court cannot make a finding that either of these properties is the matrimonial home of the respondent. In this event, the Court would not have the power under subsection 88(1) of the Court Order Enforcement Act to defer the sale.

Subsections 42.1(1) and (2) of the Court Order Enforcement Act read:

42.1 (1).—Where an order has been obtained for a sum of money, the sum shall be payable immediately unless the Court orders otherwise.

(2) The Court may provide that an order is payable by instalments or may suspend execution for the time it considers proper.

Rule 42(21)(a) of the Supreme Court Rules reads:

42 (21)(a) The Court may, at or after the time of making an order,

(i) stay the execution of the order until such time as it thinks fit, or

(ii) provide that an order for the payment of money is payable by instalments.

It would appear that the Court would have power to stay execution on the sale of the respondent's properties at this time or order that he pay monthly instalments on his indebtedness to Revenue Canada.

Counsel for the Attorney General of Canada is opposed to any order allowing for payment of debt to Revenue Canada by instalments.

The Court would note the amount of indebtedness on these two certificates I.T.A.-1302-88 and I.T.A.-652-90 according to the affidavit of Paul Dechane filed May 9, 1991. The balance due on ITA-1302-88 was $21,475.63 as of March 11, 1991. The balance due on ITA-652-90 was $2,882.46 as of March 11, 1991.

The amount of these two certificates (deemed judgments) today, including accrued interest would be, approximately $26,000.00

I would conclude from material filed that the charges and amount thereof against Lot 2 D.L. 181-K.D.—Plan 2473 are:

Castlegar Savings and Credit Union—Mortgage—

$31,273.89 as of January 16, 1991 plus per diem interest of $11.91 since that date, amounting to approximately $3,600.00

Coast Paper Limited judgment—

$7,418.00. Material did not indicate date of judgment or date of interest accrued.

The two certificates (deemed judgments) held by Revenue Canada—

$26,000.

TOTAL APPROXIMATELY—$68,300 plus accrued interest on Coast Paper judgment.

A real estate firm in Castlegar appraised this property on drive-by appraisal as $58,000.00-$61,000.00 in November of 1989.

The charges and amounts thereof against Lot “A” District Lot 181 Kootenay District Plan 9041 are as follows:

Castlegar Savings and Credit Union—Mortgage

$47,259.00, as of January 16, 1991 and per diem interest thereafter at $18.89 a day

= approximately $5,700.00.

Coast Paper Limited—Judgment

$7,418.71, plus accrued interest. Material does not indicate date of judgment or rate of accrued interest.

Canadian Imperial Bank of Commerce—Judgment

$3,541.00, plus accrued interest. Material did not indicate date of judgment or rate of accrued interest.

The two certificates (deemed judgments) held by Revenue Canada

$26,000.

TOTAL AMOUNT OF CHARGES—$88,659.00 plus accrued interest on Coast Paper and C.I.B.C. judgment.

A real estate firm from Castlegar, B.C. appraised the property on a drive by appraisal at $75,000-$78,000 in November of 1989.

In deciding whether to stay execution on sale of these properties or one of them, the Court is required to consider whether staying execution and allowing the respondent Vecchio to make instalment payments would result in a risk to the petitioner's security.

In this regard, the Court has to consider that Revenue Canada does not stand in priority to the other judgment holders and it must also consider the fact that these mortgages held by Castlegar Credit Union are increasing by the amount of the per diem interest in the amounts set out above. The judgments of C.I.B.C. and Coast Paper Limited are also increasing because of the interest payable thereon.

There is also the fact the mortgagee, Castlegar Savings and Credit Union, is in a position to apply for an order absolute at any time and this could result in further Court costs and possibly a sale in the foreclosure proceedings.

I have considered staying execution and allowing the respondent to make monthly instalments, however, in circumstances that presently exist, I am not prepared to make such an order.

The Court would confirm the registrar's report save and except for the provisions of paragraph 3(d) and paragraph 3(e) and would substitute therefor a new paragraph 3(d) to read:

The balance of sale proceeds to be distributed pro-rata amongst the remaining judgment creditors pursuant to the provisions of section 103 and 104 of the Court Order Enforcement Act and the relevant provisions of the Creditors Assistance Act.”

Pursuant to subsection 88(1) of the Court Order Enforcement Act the Court would declare that:

Lot 2-District Lot 181 Kootenay District Plan 2472

and

Lot A-District Lot 181 Kootenay District Plan 9041 be sold, and direct the sale of these lands by the sheriff.

The Court has referred itself to the decision of the B.C. Court of Appeal in First Western Capital Ltd. v. Wardle et al. (1991), 59 B.C.L.R. 309, 50 C.P.C. 318. In that case Hutcheon, J.A. held that sections 88 to 106 of the Court Order Enforcement Act do not constitute a complete code respecting execution against lands. He ruled that the Court in making an order directing the sale of land, retains jurisdiction over the sale of land and may require the sale to be subject to court approval.

I would rule that the sale of these properties is to be subject to court approval.

During the hearing of the application before the Court, the respondent alleged the balance of money owing on the certificates as set out in Paul Decnane's affidavit of January 28, 1991 is incorrect. The allegations were answered in Paul Dechane's affidavit of March 8, 1991. It may be that by this point in time the respondent's monthly rental receipts attached by way of demands on tenants and applied on the respondent's debt to Revenue Canada on a writ filed in the B.C. Supreme Court under #A890336 and on balance outstanding in respect of unremitted 1987 payroll deductions have been satisfied. In the event that any of the recent rental receipts have been applied on the two certificates in this case, it would seem that the balance owing on same could be adjusted and arrived at by agreement of counsel. If this cannot be done, the Court would order an accounting before the registrar to determine the balance owing under these two certificates. The said accounting to take place before the distribution of any funds realized on sale of the aforementioned properties.

Costs are awarded to the petitioner as set out in paragraph 6 of the registrar's report now confirmed by the Court.

Order accordingly.