ITA-6675-96
MONTRÉAL, QUEBEC, THIS 6th DAY OF JUNE 1997
PRESENT: RICHARD MORNEAU, PROTHONOTARY
| In the matter of the Income Tax Act, |
- and -
| In the matter of an assessment or assessments made by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Unemployment Insurance Act, |
AGAINST:
ANTOINE ZABAL,
Judgment Debtor,
AND
HISHAM EL SHÉRIF,
Opposant.
ORDER
The motion by the opposant is dismissed.
Richard Morneau
Prothonotary
Certified true translation
C. Delon, LL.L.
ITA-6675-96
| In the matter of the Income Tax Act, |
- and -
| In the matter of an assessment or assessments made by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Unemployment Insurance Act, |
AGAINST:
ANTOINE ZABAL,
Judgment Debtor,
AND
HISHAM EL SHÉRIF,
Opposant.
REASONS FOR ORDER
RICHARD MORNEAU,
PROTHONOTARY:
The issue here is the opposition filed by the opposant under article 597 of the Code of Civil Procedure against the seizure of a sailboat by the judgment creditor (the "creditor").
The facts
The opposant, who had lent $3,400 to the judgment debtor over the previous six years, had the judgment debtor sign an acknowledgment of debt in that amount in April 1996; according to the terms used by the parties, the judgment debtor thereby gave the opposant the aforementioned sailboat as security for the repayment of the $3,400.
When that sum had not been repaid, as agreed, before the end of August 1996, the parties signed a juridical act on September 5, 1996, which they described as a contract of sale by which ownership of the sailboat passed to the opposant.
On December 7, 1996, the creditor seized the sailboat at the yacht club where the sailboat was berthed.
On December 18, 1996, the opposant took the opposition in issue here, claiming to be the owner of the sailboat on the basis of the transactions that took place in April and September 1996 between him and the judgment debtor.
Analysis
Counsel for the opposant pointed out at the hearing that the creditor should not have seized the sailboat on December 7, 1996, since the judgment debtor had signed a form on September 3, 1996, in which he did not state that he was the owner of the sailboat. According to the opposant, given the statement by the judgment debtor, the creditor should have conducted a judgment debtor examination rather than seizing a movable that was not, according to the debtor, part of his patrimony.
I cannot accept that argument. I do not believe that a creditor is required to conduct itself solely on the basis of the statements made by its debtor when attempting to enforce a judgment against the property of the debtor.
Moreover, the opposant contended that his bona fides was not in doubt in respect of the transactions of April and September 1996, and that on that basis the sale to him in September 1996 should be opposable against the creditor.
In a rigorous analysis, counsel for the creditor contended, first, that it must be found that despite the juridical act of September 5, 1996, the contradictory testimony and statements in the record identified by counsel mean that it must be concluded that there was never any sale of the sailboat between the parties.
Although there is evidence in the record to support that position, I cannot conclude that it was not the intention of the parties to transfer ownership of the sailboat on September 5, 1996. It remains to be determined whether the transfer is opposable against a stranger to the transaction.
The creditor's second argument was that if there was in fact a transaction on September 5, 1996, the juridical act in which it is set down cannot, despite its title, constitute an act of sale, but is certainly rather a giving in payment within the meaning of article 1799 of the Civil Code of Québec (C.C.Q.). That article reads as follows:
| Art. 1799. Giving in payment is a contract by which a debtor transfers ownership of property to his creditor, who is willing to take it in place and payment of a sum of money or some other property due to him. |
Because the sailboat was not delivered by the judgment debtor as required by article 1800 C.C.Q., which refers by implication to articles 1717 and 1719 C.C.Q., the giving must be regarded as not having been perfected and the sailboat must be considered to have continued at all material times to be part of the patrimony of the judgment debtor, and therefore subject to seizure on December 7, 1996, for a tax debt certified in an amount of over $14,000. Article 1800 C.C.Q. reads as follows:
| Art. 1800. Giving in payment is subject to the rules pertaining to contracts of sale and the person who so transfers property is bound to the same warranties as a seller. |
| Giving in payment is perfected only by delivery of the property. |
I concur in the approach taken by the creditor. Based on that argument, the opposition filed by the opposant deserves to be dismissed.
Moreover, even if we were to consider the giving in payment to have been perfected here, I find that counsel for the creditor has established, and this was her third argument, that the elements of articles 1631 and 1632 C.C.Q. were present here, and accordingly that the juridical act of September 5, 1996, was not opposable against the creditor.
It seems plain to me that by the juridical act dated September 5, 1996, the debtor - to the knowledge of the other contracting party, the opposant - was making or trying to make himself insolvent, or was giving a preference to another creditor, the opposant, at a time when he was insolvent. On this point, it must be recalled that on September 3, 1996, two days before the juridical act dated September 5, 1996, the debtor signed a form in which his liabilities exceeded his assets, even though the form did not include the debtor's tax debt for the 1987 to 1990 taxation years. The transcript of the examination of the opposant on his affidavit shows that he was aware of the judgment debtor's precarious financial situation at all material times.
The creditor's third argument is also sufficient to result in dismissal of the opposition in issue here.
The opposition will therefore be dismissed with costs.
Richard Morneau
Prothonotary
Montréal, Quebec
June 6, 1997
Certified true translation
C. Delon, LL.L.
Federal Court of Canada
Court file No. ITA-6675-96
between
| In the matter of the Income Tax Act, |
- and -
| In the matter of an assessment or assessments made by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Unemployment Insurance Act, |
AGAINST:
ANTOINE ZABAL,
Judgment Debtor,
AND
HISHAM EL SHÉRIF,
Opposant.
REASONS FOR ORDER
FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO: ITA-6675-96
STYLE OF CAUSE: In the matter of the Income Tax Act,
- and -
| In the matter of an assessment or assessments made by the Minister of National Revenue under one or more of the following statutes: the Income Tax Act, the Canada Pension Plan and the Unemployment Insurance Act, |
AGAINST:
ANTOINE ZABAL,
Judgment Debtor,
AND
HISHAM EL SHÉRIF,
Opposant.
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: June 2, 1997
REASONS FOR ORDER BY: Richard Morneau, Prothonotary
DATED: June 6, 1997
APPEARANCES:
Hélène Beaumont for the judgment creditor
Benoit Tremblay for the opposant
SOLICITORS OF RECORD:
Hélène Beaumont for the judgment creditor
Department of Justice Canada
Montréal, Quebec
Benoit Tremblay for the opposant
Montréal, Quebec