McQuarrie Bros. Motors Ltd. v. Fusilli Grill Ltd., 2018 BCSC 769
Earlier this month Aron Bookman and Amy Coad of Carfra Lawton successfully defended an action brought against the City of Campbell River. The corporate plaintiff failed to pay property taxes owing to the City for its commercial property for several years. The City sold the property at the annual tax sale under the Local Government Act, to recover delinquent taxes owed by the plaintiff. The plaintiff sued alleging that the City had breached the Act by failing to provide proper notice of the tax sale and redemption period.
When a property owner fails to pay property taxes, a municipality may sell the property at a tax sale to collect the amount owing, under the procedure set out in the Local Government Act. The property is sold to the highest bidder for an amount not less than the upset price, which is comprised of the delinquent taxes, taxes in arrears, the cost of the sale and interest payable to the purchaser. The property owner has one year from the tax sale to redeem the property by paying the upset price to the municipality.
The City had delivered notice of the tax sale and redemption period by registered mail to the plaintiff’s address as it appeared on the title for the property – which also happened to be the civic address of the property in question, and the delivery and operating address for the plaintiff company. In the action the corporate plaintiff argued that notice should have been given to its corporate “registered and records office” and served on its director(s) and/or officer(s). In essence, the plaintiff argued that effective “notice” under the Act required proof that the owner of the company had received it.
Mr. Justice J.K. Bracken rejected the plaintiff’s submissions and held that the City had effected proper notice and complied with the Act by serving notice to the plaintiff’s address on title to the property, and confirming delivery. The City had delivered tax notices to this address for over 30 years without objection from the plaintiff. Justice Bracken also concluded that the sole shareholder, director and officer of the plaintiff company had given unsatisfactory evidence as to his actual knowledge of the tax sale and redemption period and that he was in fact aware of the tax sale and date for redemption. Accordingly, the action against Campbell River was dismissed with costs.