PRACTICE |
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Steckmar Corp. v. Steckmar National Realty and Investment Corp.
ITA-1096-99
2004 FC 1568, Beaudry J.
26/11/04
16 pp.
Motion to appeal order made pursuant to Federal Court (Rules) 1998, s. 51(1) making final order of garnishment in favour of Her Majesty the Queen (creditor) against Steckmar National Realty and Investment Corporation (garnishee)-- Final order of garnishment obtained to recover debt of $126,666.39 plus interest owed Her Majesty by Steckmar Corporation (judgment debtor)--Judgment debtor advanced sum totalling $4,255,534.41 to garnishee over 25-year period without interest--Garnishee used $1,929,767 of this amount to make loan to Marina Development Inc., wholly owned by one of judgment debtor's shareholders--Judgment debtor and garnishee related companies--No documentation confirming loan, but parties agreeing loan would be repayable when garnishee's financial situation permitted--Garnishee and judgment debtor in financial difficulty and debt held by judgment debtor regarded as bad debt--Prothonotary relied inter alia on Rules, s. 453 and decided payability important aspect of debt, as it concerns time term expires--As term of obligation uncertain, prothonotary applying Civil Code of Quebec (C.C.Q.), art. 1512 to determine term--In prothonotary's opinion, Federal Court having power necessary to resolve questions of provincial law incidental to principal application--Court must redo analysis de novo in order to exercise its discretion--Federal Court deriving powers to enforce judgment from federal legislation which expressly confers Federal Court's jurisdiction--Creditor obtained certificate confirming amount owed to her by debtor under federal legislation, filed certificate in Federal Court to have registered--As registration deemed to give certificate same effect as if order made by Court, creditor could obtain enforcement of judgment--Under s. 449, possible to obtain garnishment for payment of debt recorded in judgment--Federal Court having jurisdiction to consider questions of provincial law when such questions incidental to principal application--Under s. 449(1)(a), question of payability of debt incidental to garnishment and Federal Court having power to resolve this kind of question--Dispute between parties involving determining when obligation became payable since agreement between parties provided term was "as the garnishee's financial situation permits"-- Evidence showing no procedure created to determine time of repayment--Federal Court may accordingly decide question of expiry of term, relying on C.C.Q., art. 1512--When judgment debtor negligent, Federal Court could exercise in debtor's name rights and actions latter had regarding garnishee pursuant to C.C.Q., art. 1627--Under Rules, s. 453, prothonotary could decide by summary proceeding since garnishee disputed existence of debt not obligation to pay-- To determine payability of debt, necessary to consider that judgment debtor began making advances to garnishee 25 years ago without interest and some $749,330 had been repaid on loan of $4,255,534.41--In circumstances, debt was due-- Prothonotary not erring in law or fact requiring Court's intervention--Motion dismissed--Federal Court Rules, 1998, SOR/98-106, s. 51(1), 449, (1)(a), 453--Civil Code of Quebec, S.Q. 1991, c. 64, art. 1512, 1627.