IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Re Bankruptcy of Justis Raynier, |
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2005 BCSC 82 |
Date: 20050124
Docket: No. 215086 VA01
Registry: Vancouver
In the Matter of the Bankruptcy of Justis Raynier
Before: The Honourable Madam Justice Allan
Reasons for Judgment
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Counsel for the Applicant Attorney General of Canada on behalf of Her Majesty the Queen in Right of Canada
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Donnaree Nygard |
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Counsel for Ms. Malonie Raynier |
Paul Jaffe |
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Date and Place of Hearing: |
January 18, 2005 |
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Vancouver, B.C. |
[1] The Applicant Attorney General of Canada on behalf of Her Majesty the Queen in Right of Canada applies for an order under Rule 46 of the Rules of Court that one half of the sale proceeds from the sale of Co-operative shares of property located at 303 – 1131 West 11th Avenue, Vancouver, B.C. (the “ Co-op Shares”), be held in trust or paid into Court, pending the outcome of proceedings to be commenced by Canada Customs Revenue Agency (“CCRA”) against Malonie Raynier pursuant to s. 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c.B-3 (the “Act” ) or further order of the Court. Ms. Raynier is the wife of the Bankrupt Justis Raynier and the owner of the Co-op Shares.
[2] On January 18, 2005, immediately before this application was heard, Master Scarth granted an order under s. 38 of the Act authorizing CCRA to commence proceedings in its own name advancing claims of constructive and resulting trust or, in the alternative, fraudulent conveyance against the proposed defendant Malonie Raynier. That action would seek a declaration as to the Bankrupt’s interests in certain property, including the proceeds of the Co-op Shares and related relief.
This application
[3] Rule 46 provides:
46(1) The court may make an order for the detention, custody or preservation of any property that is the subject matter of a proceeding or as to which a question may arise and, for the purpose of enabling an order under this rule to be carried out, the court may authorize a person to enter upon any land or building.
(2) where the right of a party to a specific fund is in dispute in a proceeding, the court may order the fund to be paid into court or otherwise secured.
Whether this application is brought in a proceeding
[4] In my opinion, the proposed action is not a “proceeding” within the meaning of Rule 46. While the definition of “proceeding” in Rule 1 is broad: “’proceeding’ means an action, suit, cause, matter, appeal or originating application”, it does not contemplate a proposed action that has not been commenced. The Applicant seeks relief in the nature of a Rule 46 order in the proposed action, not in the current Bankruptcy proceedings.
[5] That conclusion is fatal to the Applicant’s motion. However, I would go on to add my opinion, albeit in obiter, as to why the application, if renewed in the action against Ms. Raynier, cannot succeed.
The applicability of Rule 46
[6] The purpose of Rule 46 is to preserve “property” that is either the subject of the dispute between the parties or “a specific fund” and that is threatened with disposition or transfer to another jurisdiction. In my view, the sale proceeds of the Co-op Shares do not constitute disputed property or a specific fund. Further, as Madam Justice Gray stated, in Osooli-Talesh v. Emami, [2003] B.C.J. No. 2904, 2003 BCSC 1924 at para. 51:
The requirement to show that there is evidence to render reasonable the belief that the property is threatened with disposition or transfer is another formulation of the question of whether the applicant would suffer irreparable harm if the application were refused.
[7] There is no evidence upon which to conclude the Applicant would suffer irreparable harm if this application were refused.
[8] I conclude that there is no basis upon which to grant the extraordinary relief provided by Rule 46, which in this case would amount not just to execution before judgement, but execution before any action was commenced.
[9] The application is dismissed.
“M.J. Allan, J.”
The Honourable Madam Justice M.J. Allan