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Collections — execution preventing sale of property

My clients were a married couple. The husband had been assessed close to a million dollars as a director of a corporation that had been assessed for GST. He had transferred a parcel of land to his wife, and the wife was assessed for over $127,000 under the "transfer of property" rules. As a result, an execution was filed against her name, and when they came to sell the property three years later, they could not sell it. Revenue Canada refused to lift the execution despite the request of my clients' lawyer.

At this point the clients asked me for help. They desperately needed to sell the property to pay various bills.

I determined that the assessment was wrongly issued because, due to two mortgages on the property at the time the husband transferred it to the wife, the value of what he transferred to her was really zero. So I filed a Notice of Objection (first applying for an extension of time, because the 90-day objection period had run out).

But this was not enough. The objection was to take almost two years to deal with (I was successful), but meanwhile the property still needed to be sold, and the Collections officer was unwilling to lift the execution.

After intense negotiations over two days with the Collections officer and other creditors, I convinced him to lift the execution temporarily so the wife could sell the property, with only $30,000 (instead of $127,000) paid to Revenue Canada. The balance went to pay my clients' other bills.

Two years later, after the assessment was cancelled, the execution was lifted permanently and the wife received the $30,000 back with interest.

(1998)