Date: 19980731
Docket: T-104-97
BETWEEN:
CAROLE L. BARRONS
Plaintiff
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
(MINISTER OF NATIONAL REVENUE)
Defendant
REASONS FOR ORDER
TEITLEBAUM J.
[1] On July 7, 1998, the applicant, Carole L. Barrons, who represents herself, filed into the Federal Court Registry in Toronto, a notice of motion for an order quashing a garnishment issued, as she states in her notice of motion, improperly, on February 27, 1998; or in the alternative, for an order staying the Requirement to Pay dated February 27, 1998 or, in the alternative, "a declaration that the defendant ought reasonably to have acquired the back taxes owing from plaintiff's RRSP and the Requirement to Pay is therefore stayed".
[2] As her grounds, the applicant (plaintiff) states, in her notice of motion:
| 1. under Rule 1910 of the Federal Court Rules, where a Certificate has been issued, no process outside of Rule 1900 may be issued to compel payment of any debt or obligation, and the defendant has not properly proceeded to garnishment under Rule 1900; or in the alternative |
| 2. following the Reasons of the Honourable Mr. Justice Gibson dated the 17th day of December, 1997, this Honourable Court has jurisdiction over Requirements to Pay issued under s.224 of the Income Tax Act, and there is good and reasonable cause to stay the Requirement to Pay; or in the further alternative |
| 3. there is no legislation in Ontario that prevents the defendant from acquiring monies to cover back taxes owing from the plaintiff from an RRSP so long as the plaintiff does not object to or resist the said acquisition. |
[3] The above notice of motion was filed pursuant to Rule 369 of the Federal Court Rules. On June 26, 1998, Madame Justice McGillis, concluded, following a review of the materials, that the issue should be argued orally. On July 13, 1998, this matter came up for hearing.
[4] In her affidavit filed with the present notice of motion, Ms. Barrons states:
| 1 By correspondence dated December 15, 1997, and received be me on or about December 23, 1997, I was advised by Crown Life that my application for long term disability benefits had been approved. |
| Attached to this my Affidavit as Exhibit A is a true copy of the correspondence of Crown Life Dated December 15, 1997. |
| 2. By Requirement to Pay dated February 27, 1998, the defendant garnished my long term disability benefits payments from Crown Life. |
| Attached to this my Affidavit as Exhibit B is a true copy of the Requirement to Pay dated February 27, 1998. |
| 3. The Attending Physician's Supplementary Statement completed by D. H. Marcus on February 23, 1998 shows that I have cancer, and with it is a form showing the date of surgery as March 10, 1998. |
| Attached to this my Affidavit as Exhibit C are true copies of the forms identifying the cancer and showing the surgery date. |
| 4. I attach as Amended Statement of Income and Expense in support of my claim that there is no ability to pay a third party demand of approximately $400 per month. |
| Attached to this my Affidavit as Exhibit D is a true copy of my Amended Statement of Income and Expense. |
[5] The issue of Ms. Barrons owing money to the defendant has been ongoing for a number of years. In the affidavit of David Courtney sworn May 25, 1998, it is apparent that Ms. Barrons is indebted to Her Majesty the Queen (Crown) in the sum of $3,407.30 as of May 25, 1998. This debt is in respect of the 1987-94 taxation years. On December 4, 1996, she was indebted to the Crown in the amount of $7,378.13. As a result of a Requirement to Pay issued pursuant to s. 224 of the Income Tax Act, and served on Ms. Barrons' employer, monies which would otherwise be payable to Ms. Barrons, up to a maximim of 20% of these monies, would be paid to the Crown to repay Ms. Barrons's income tax debt.
[6] On February 27, 1998, the Crown caused to be issued and served a Requirement to Pay on Crown Life Insurance Company as the company was paying long term disability benefits to Ms. Barrons.
[7] Ms. Barrons now asks, as I have stated, the Court to quash the garnishment because, as she states in her written submission, "Barrons' ability to pay is non-existent at this time."
[8] I am satisfied that pursuant to s. 224 of the Income Tax Act the Crown was and is permitted to garnish 20% of the monies owing by Crown Life to Ms. Barrons.
[9] I cannot, with all due respect to Ms. Barrons, see anything illegal or unjust in the Crown attempting to recover monies owing to it for past income tax.
[10] Having said this, after reading the written submissions of Ms. Barrons and after listening to her, I can and do understand her serious financial concern. I am also satisfied that Ms. Barrons is making a gallant attempt to not only pay the Crown but her other creditors as well.
[11] Unfortunately because of the conditions attached to her RRSP account, that money is "locked in" and cannot now be withdrawn.
[12] I would suggest, as I did in open Court, that the parties attempt to arrive at a settlement as to how much money should be paid to the Crown on a weekly or monthly basis.
[13] Nevertheless the debt to the Crown must be paid.
[14] The present application is denied.
Judge
OTTAWA, Ontario