Thunderbird Holdings Ltd. v. Date:, 2013 MBCA 78

Citation: Thunderbird Holdings Ltd. v. Date: 20130827 Manitoba et al., 2013 MBCA 78 Docket: AI 11-30-07681 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Madam Justice Holly C. Beard Mr. Justice Marc M. Monnin BETWEEN : ) R. M. Beamish and ) R. M. Caithness THUNDERBIRD HOLDINGS LTD. ) for the Appellant ) (Plaintiff) Appellant ) W. G. McFetridge ) for the Respondent The ) Government of Manitoba - and - ) ) S. D.

Boyd ) for the Respondent ) Winnipeg Land Titles THE GOVERNMENT OF MANITOBA ) Office, District Registrar and WINNIPEG LAND TITLES OFFICE, ) DISTRICT REGISTRAR ) Appeal heard: ) June 21, 2012 (Defendants) Respondents ) ) Judgment delivered: ) August 27, 2013 HAMILTON J.A. [ 1 ] This appeal is about whether the district registrar of the Winnipeg Land Titles Office (WLTO) had the power to grant an extension of time to registered owners to redeem their property from tax sale proceedings pursuant to s. 45(4) of The Real Property Act , C.C.S.M., c.

R30 (the RPA ): Power of district registrar 45(4) The district registrar, in a case where he deems it proper, may (

a) extend the time for redemption fixed by the notice; and (

b) order that the notice be served substitutionally, and such substitutional service has the same effect as personal service upon the person intended to be affected thereby. [ 2 ] The plaintiff, Thunderbird Holdings Ltd. (Thunderbird), purchased a tax sale certificate for 529 Kildare Avenue E. (the property) from the City of Winnipeg (the City). Thunderbird registered all necessary documents in the WLTO to effect the transfer of title into its name, but the transfer was never completed. The registered owners redeemed the property after receiving an extension of time from the district registrar to do so.

In addition to s. 45(4) of the RPA , the district registrar relied on s. 255(1) of The City of Winnipeg Act , S.M. 1989-90, c. 10 (the CWA ) (now repealed and replaced by The City of Winnipeg Charter , S.M. 2002, c. 39):

Redemption before issue of title 255(1) Notwithstanding anything to the contrary in this Act, a person having an interest in a parcel of land included in the return to the district registrar, or a person on behalf of the person, may at any time after one year from the date of the sale and before the issue of title pursuant to the sale, redeem the parcel of land by paying to the district registrar .... [ 3 ] Thunderbird sued the Government of Manitoba, the WLTO and the district registrar (collectively the Province) in negligence seeking compensation for its economic loss because it did not obtain ownership of the property.

The parties agree that this action brings into play s. 182(1) of the RPA (now repealed): Person damaged 182(1) A person, who sustains loss or damage through an omission, mistake, or misfeasance, of the district registrar in the execution of his duties under this Act [the RPA ], may bring action against the district registrar therefor. [ 4 ] After a trial, the judge dismissed Thunderbird’s claim.

He concluded that the district registrar had the authority to extend the time for redemption under s. 45(4) of the RPA and that the district registrar was obliged pursuant to s. 255(1) of the CWA to accept the redemption funds from the registered owners because they had the right to redeem before title issued to Thunderbird.

The judge assessed damages on a provisional basis. [ 5 ] Thunderbird appeals, arguing that the judge erred in law because he did not interpret s. 45(4) conjunctively, to the effect that the district registrar may only grant an extension of time under this provision in conjunction with an order of substitutional service. Thunderbird also appeals the judge’s provisional assessment of damages. [ 6 ] As I will explain, I am of the view that the judge erred in his

interpretation of s. 45(4) of the RPA and that Thunderbird was entitled to have the property registered in its name. Therefore, the district registrar made a “mistake” pursuant to s. 182(1) of the RPA and Thunderbird is entitled to damages for its loss. I would not disturb the judge’s assessment of damages. Statutory Provisions [ 7 ] The issue on this appeal is a question of statutory

interpretation and calls for a consideration of a number of the tax sale regime provisions of the RPA and the CWA . [ 8 ] I have already set out s. 45(4) of the RPA and s. 255(1) of the CWA . Other provisions will be referred to during the course of my reasons. The full text of these provisions is set out in the attached appendix. Background [ 9 ] The City acquired the property at a tax sale on December 1, 1999. In 2001, the property had an assessed value of $73,400.

In March 2001, the deputy district registrar served a notice under the RPA and the CWA dated March 16, 2001, on the registered owners with respect to their entitlement to redeem the property “within three months from the date of service.” The registered owners did not redeem the property within this time period. In June 2001, Thunderbird acquired a judgment registered against the property. The City assigned the tax sale certificate to Thunderbird on October 1, 2001, and issued a final certificate on October 15, 2001.

Thunderbird filed the certificate in the WLTO, along with other documents, to enable the district registrar to convey title to it. [ 10 ] On October 17, 2001, a lawyer for the registered owners asked the district registrar for the amount required to redeem the property. A series of communications followed involving the WLTO, the lawyer for the registered owners and Thunderbird. On October 19, 2001, the district registrar advised the lawyer that Thunderbird’s application to convey title would be held in abeyance until October 26, 2001, on certain conditions.

This correspondence, which was copied to Thunderbird, read in part as follows: We will hold [Thunderbird’s] application in abeyance until October 26, 2001. After that time, if the funds are not received from you and you have not provided us with a court order prohibiting us from proceeding, we will complete the processing of [Thunderbird’s] documents and issue title to [Thunderbird]. If the funds are received from you by October 26, 2001, we will not take further steps with respect to [Thunderbird’s] application for title until the matter of priority has been settled by the court.

[ 11 ] By Friday, October 26, 2001, the registered owners had not tendered the funds to redeem the property. However, on October 29, 2001, one of the registered owners and their lawyer attended the WLTO at 10:00 a.m. to tender the funds. At that time, the documents filed by Thunderbird were in the process of being examined by a deputy district registrar.

When the lawyer provided a certified cheque for the redemption amount, the deputy registrar accepted the registered owners’ documents to redeem the property and rejected the documents for transfer to Thunderbird. [ 12 ] The deputy registrar justified his actions on the basis that he had the discretion under s. 45(4) of the RPA to extend the registered owners’ time to redeem and that the registered owners had the “absolute” right to redeem under s. 255(1) of the CWA .

The Judge’s Decision [ 13 ] The judge explained that the issue was whether the district registrar had “the power to extend the notice in this case” (at para. 14) and, if so, whether “ he exercised [it] properly” ( ibid. ). [ 14 ] He did not accept Thunderbird’s position that ss. 45(4) (

a) and (

b) of the RPA are to be read conjunctively (at paras. 17- 20): In construing s. 45(4) of The Real Property Act , I must follow the modern principle of statutory

interpretation. .... I find that the powers of the District Registrar set out in paragraphs 45(4) (

a) and (

b) should be read disjunctively. These are two separate powers which the District Registrar can exercise independently. There is no rationale indicating that they are interconnected. I agree with the defendants’ submission that the redemption period does not start running until after service of the last notice required to be served has been effected ( s. 261(1) of the City of Winnipeg Act ). The fact that substitutional service is being considered in a given case means at least one of the notices has not been served. ... I do not find that the words “fixed by the notice” limit the words “extend the time for redemption”. When one looks at s. 45 in context, in paragraph 45(1)(

c) there is reference to “a notice requiring” persons interested in the land an opportunity “within the time limited by the notice to contest the claim of the tax purchaser or to redeem the land.” Subsection 45(2) sets out the effect of the notice, which is to bar any rights of the individuals, including the owners who have an interest in the land, from setting up a claim to the land, unless it is redeemed or a pending litigation order is filed.

An extension of the time for redemption under s. 45(4) is necessarily an extension of the time for redemption fixed by notice since such an extension involves extending the time for redemption which is originally fixed by the notice under paragraph 45(1)(c). I find, therefore, that the District Registrar had the power to extend the time for redemption under s. 45(4) of the Real Property Act in this case even though the extension did not relate to substitutional service. I do not find that the words “fixed by the notice” circumscribed the District Registrar’s power in any way.

I note that the power given to the District Registrar under that subsection is broad. The District Registrar is allowed to extend the time “in a case where he deems it proper”. In this case, the District Registrar had before him what he perceived as a credible request made through a solicitor. It was made in writing.

The extension was for a reasonably short period of time - seven working days. [emphasis added] [ 15 ] As for s. 255(1) of the CWA , he held that the registered owners were entitled to redeem the property as they did (at para. 22): …. … [P]ursuant to s. 255(1) of the City of Winnipeg Act , which gives an owner the ability to redeem prior to the issuance of title.

Upon the owners arriving with the funds on October 29, 2001, the District Registrar had no choice but to accept the monies and proceed with the redemption and reject the transmission documents of the plaintiff. [emphasis added] [ 16 ] The judge provisionally assessed damages in the amount of $73,307.25, explaining that (at para. 25):

….. This amount represents the difference between the fair market value of the property on October 29, 2001, less the plaintiff’s costs to acquire the property. The plaintiff submitted that the damages should reflect the rise in real estate values in Winnipeg over the past decade. However, I agree with the defendants’ submission that the evidence showed that the plaintiff had the ability to finance properties and I find it would have invested the amount that it was refunded on the assignment of the Tax Sale Certificate to invest in other properties.

The plaintiff would also have been entitled to pre-judgment interest at the rate of 3.5%. The Positions of the Parties Thunderbird [ 17 ] The fundamental ground of appeal is that the judge erred in law in how he interpreted s. 45(4) of the RPA . Relying on Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235 , Thunderbird says that this question of statutory

interpretation calls for the standard of review of correctness. Thunderbird also says that this error led the judge to err when he concluded on the facts of this case that the district registrar had the discretion to extend the time for redemption to the registered owners. [ 18 ] Thunderbird asserts that ss. 45(4) (

a) and (

b) are to be read conjunctively and, as a result, s. 45(4) only applies to situations of substitutional service. This is evident, it says, when s. 45(4) is read in the context of s. 45 in its entirety and in conjunction with s. 245(1) and s. 255(1) of the CWA .

Section 245(1) reads as follows: Redemption of land sold at tax sale 245(1) The owner of any land which is sold for non-payment of taxes or costs, or the heirs, executors, administrators, successors or assigns of the owner or any other person or the city on his or their behalf may within one year from the day of sale, redeem the land by paying or tendering to the treasurer the following monies: …. [ 19 ] Thunderbird points out that s. 245(1) concerns the right of an “ owner of any land which is sold for non-payment of taxes ... [to], within one year from the day of sale, redeem the land” (emphasis added).

It says that this provision limits an owner’s right of redemption to that one-year period. It contrasts s. 245(1) with s. 255(1) , which concerns the right of “ a person having an interest ” (emphasis added). Thunderbird asserts that the Legislature saw fit to distinguish between the right of redemption of the “owner” under s. 245(1) and of other persons having an interest in the land.

This, it says, is confirmed by s. 255(2) which refers to the right of redemption “by a person other than the registered owner”: District registrar may issue title 255(2) On the redemption by a person other than the registered owner taking place, the district registrar may proceed with the application and issue title thereunder …. [ 20 ] Thunderbird also points to the requirements set out in s. 259(7) and s. 259(9) of the CWA (which pertain to land that has an assessed value of less than $10,000), pursuant to which the district registrar is required to send notice by registered mail to all persons having an interest in the property to “redeem the land within the time limited by the notice.” In this case, it says that the district registrar’s notice was sent on March 16, 2001, and allowed three months from the date of service of that notice to redeem.

If not redeemed within that time period, Thunderbird asserts that the right to redeem is lost, pursuant to s. 259(9) of the CWA : When title may issue to city 259(9) All persons to whom the notice referred to in subsection (7) is sent, failing to comply with the requirements of the notice within the time limit, shall be forever estopped and debarred from setting up any claim … and the district registrar shall register The City of Winnipeg, or other person claiming to be entitled thereto as the owner …. ….

[ 21 ] Thunderbird says that the effect of s. 259(9) is to oblige the district registrar to register the City or its assignee (Thunderbird in this case) as owner if there is no redemption by any other interested parties, as was the case here. [ 22 ] Therefore, Thunderbird asserts that there is no statutory provision that provides the district registrar the power to extend the time for redemption, generally, under tax sale applications.

It argues that if the legislators had intended to grant such a general power, they would have done so. [ 23 ] Alternatively, Thunderbird argues that the district registrar was bound by the extension deadline of October 26, 2001, which was not met and that, thereafter, it had the right to have title issued in its name. [ 24 ] Finally, Thunderbird asserts that the judge erred in his apprehension of the evidence and the application of that evidence to the law in assessing damages.

In addition, it argues that the judge did not give sufficient reasons for not accepting the evidence that it would have bought the property, improved it, and held on to it as a rental unit and revenue source. It asserts that the value of the house and its increase in profit is the best measure of the loss incurred. The Province [ 25 ] The Province submits that the standard of review for the question of the

interpretation of s. 45(4) is not correctness. Relying on Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 S.C.R. 654 , the Province argues that deference is owed to how the district registrar interpreted s. 45(4) because he was interpreting his “home statute,” which calls for the standard of review of reasonableness. The Province acknowledges that if the district registrar’s

interpretation is unreasonable, then Thunderbird would have a claim under s. 182(1) of the RPA on the basis that the district registrar made a “mistake” in interpreting the governing provisions in the way that he did. However, it says that s. 182(1) does not contemplate liability for a bona fide exercise of discretion by the district registrar. [ 26 ] The Province asserts that s. 45(4) confers on the district registrar two distinct discretionary powers; the first being the power to extend the time to redeem fixed by the notice, and the second being the power to permit substitutional service of the notice. It says that this

interpretation is reasonable, if not correct, and that the judge was correct to uphold it. [ 27 ] The Province relies on s. 261(1) of the CWA : Issue of title 261(1) After the expiration of three months from the day of service of the last notice required to be served by or on behalf of the applicant, in cases where notice has been directed to be served, and in other cases after the expiration of three months, from the filing of the application, if the land is not redeemed, the district registrar, on being satisfied that the purchaser is entitled, subject to paying the balance, if any, of purchase money, to receive a certificate of title to the land comprised in the application or parcel thereof, shall notify the purchaser that the district registrar is prepared to issue a certificate of title under The Real Property Act to the applicant for the land or parcel on being satisfied, by the production of a certificate from the treasurer that the purchase money for the land has been paid in full by the purchaser, and shall, on being so satisfied, issue a certificate of title to the applicant, and the certificate of title shall in every respect have the same effect as, and considered to be, a certificate of title issued under The Real Property Act , and thereafter no person, except the tax purchaser or those claiming through or under the tax collector, shall be deemed to be entitled to the land included in the certificate of title or to any part of it, or to any interest therein or lien thereon, whose rights in respect thereof accrued before the issue of the certificate of title.

It then says that the redemption period does not start running until after service of the last notice required to be served is effected. It says that if Thunderbird’s

interpretation is accepted it would mean that, in every case where substitutional service is ordered, the time fixed in the notice would also have to be extended. [ 28 ] The Province argues that the district registrar’s

interpretation fits with a purposive and contextual

interpretation of the relevant and intertwined provisions of the RPA and the CWA . Although the tax sale regime is designed to enable the City to collect its tax debts, it says that a second and inter-related intent is the protection of an owner’s rights by providing opportunities throughout the process for the owner to pay outstanding taxes and keep their property. They point to s. 45(1) of the RPA , ss. 245 , 255(1) , 255(4) and 259(1) of the CWA , and say that s. 45(4) (

a) is simply another aspect of this principle. [ 29 ] The Province asserts that when the registered owners tendered the money to redeem to the district registrar, title to the property had not issued to Thunderbird and, therefore, they still had the right to redeem, which is a non-exclusive right with other interest holders to redeem “ before the issue of title pursuant to the sale” as provided in s. 255(1) of the CWA .

They assert that s. 255(2) is not of consequence here as it is simply a provision to enable title to be transferred when the redeeming party is not the owner registered on the title. [ 30 ] As for damages, the Province asserts that Thunderbird has not demonstrated that the judge proceeded upon a mistaken or wrong principle or that the calculation was erroneous. Therefore, it says that this court should not interfere with the assessment of damages. Analysis and Decision

[ 31 ] The fundamental issue in this appeal is the proper

interpretation of s. 45(4) of the RPA . It is a question of statutory

interpretation. [ 32 ] The Province argues that the standard of review should be reasonableness because the question of statutory

interpretation involves the

interpretation by the district registrar of his “home statute,” the RPA . In support of this contention, it refers to Alberta Teachers’ Association which had not been released at the time of the judge’s decision. The Province did not rely on other similar existing jurisprudence and argued before the judge that he should show deference to the district registrar’s

interpretation by applying the standard of review of reasonableness. Normally, a party is precluded from presenting a new argument not considered by the judge. However, because this is a standard of review argument that, in my view, can be addressed briefly, I will address it. [ 33 ] The concept of “home statute” is an administrative law concept. See Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190 . In my view, the Province’s reliance on Alberta Teachers’ Association , a judicial review case, is misplaced. This proceeding is a civil claim seeking damages, albeit pursuant to s. 182(1) of the RPA .

It is not a judicial review. The law distinguishes between judicial review and civil claims. In a civil claim, a question of statutory

interpretation is a question of law that calls for the standard of review of correctness. See Housen , and Telecommunication Employees Association of Manitoba Inc. et al. v. Manitoba Telecom Services Inc. et al. , 2012 MBCA 13 at paras. 67 , 69, 275 Man.R. (2d) 185. Housen , like this case, involved a claim relating to a breach of statutory duty arising out of a statutory regime. [ 34 ] In New Brunswick Liquor Corp. v.

Small , 2012 NBCA 53 , 390 N.B.R. (2d) 203 , another judicial review case, Robertson J.A., wrote about this distinction (at para. 17): This leaves for consideration the standard of review to be applied to pure questions of law, which fall under one of two umbrellas: (1) the identification of a common law or equitable principle or rule, or analytical framework; and (2) the

interpretation of a contractual or statutory provision. It is trite to acknowledge that no deference is owed to a trial, application or motion judge’s ruling involving a pure question of law. An appellate court is free to arrive at its own opinion ( see Housen v. Nikolaisen , at para. 8 ). While correctness has always been the accepted review standard for questions of law decided within the context of civil proceedings, the same cannot be said when it comes to determinations by an administrative tribunal performing adjudicative functions. …. [emphasis added] [ 35 ] Therefore, the question of statutory

interpretation of s. 45(4), in this case, is a question of law that calls for the standard of review of correctness. [ 36 ] To determine the correct

interpretation of s. 45(4), one must employ the well-known modern approach to statutory

interpretation. This approach entails considering “the words that are used and the context in which they are used, the scheme of the Act and both the object of the Act and the intention of the Legislature in enacting the legislation” ( Stuart v. Toth , 2011 MBCA 42 at para. 17 , 268 Man.R. (2d) 50 ). See also Ruth Sullivan in Sullivan on the Construction of Statutes , 5th ed. (Markham: LexisNexis Canada Inc., 2008) . Therefore, in addition to the wording of s. 45(4) , it is necessary to consider other provisions of the complex tax sale regime set out in the RPA and CWA , including s. 255(1) of the CWA . As will be explained, I conclude that ss. 45(4) (

a) and (

b) are to be read conjunctively, and not disjunctively, as the judge held. The registered owner no longer had a right to redeem long before October 26, 2001. As a result, the district registrar did not have the discretion to extend the time for the registered owners to redeem the property. Given that, the judge erred when he concluded that s. 255(1) of the CWA obliged the district registrar to accept the registered owners’ money and proceed with redemption. [ 37 ] I start my analysis with a consideration of s. 45 of the RPA , which applies to tax sales involving land with a value in excess of $10,000.

The pertinent parts of s. 45 read as follows: Appl. by tax purchaser 45(1) In case of an application under a tax sale, where the value of the land ... exceeds $10,000, (

a) the treasurer of the municipality or the collector of the school district shall furnish the district registrar with a certificate showing the years for which there were taxes due and in arrear for which the land was sold at the sale; (

b) the district registrar shall satisfy himself that the sale was fairly and openly conducted; and (

c) subject to subsection (6), the district registrar shall cause to be served upon all persons appearing to be the persons, who other than the tax purchaser or the assigns of the tax purchaser, are interested in the land, a notice requiring them, within the time limited by the notice to contest the claim of the tax purchaser or to redeem the land, if it is open to redemption.

Effect of notice 45(2) In default of a pending litigation order being filed and in default of redemption, before the registration as owner of the person entitled under the tax sale, all persons, so served, are forever estopped and debarred from setting up any claim to, or in respect of, the land so sold for taxes; and the district registrar shall register the person entitled under the tax sale as owner of the land. . . . . . [emphasis added] [ 38 ] Because s. 45(4) of the RPA is at the heart of this appeal, I repeat it here: Power of district registrar 45(4) The district registrar, in a case where he deems it proper, may (

a) extend the time for redemption fixed by the notice; and (

b) order that the notice be served substitutionally, and such substitutional service has the same effect as personal service upon the person intended to be affected thereby. [emphasis added] [ 39 ] Not surprisingly, the RPA is one of the oldest statutes in Manitoba. Despite this, there is little judicial or academic commentary specifically on s. 45 of the RPA . What exists is often in the context of applications to overturn tax sales rather than issues related to redemptions.

Nonetheless, it is helpful to the extent that it underscores, for the most part, the importance of respecting the strict rules of the tax sale regime. [ 40 ] The current wording of s. 45 was introduced in 1934 as The Real Property Act , S.M. 1934, c. 38, s. 46 (the 1934 Act ), and subsequently enacted in nearly identical form as R.S.M. 1940, c. 178, s. 48 (the 1940 Act ), R.S.M. 1954, c. 220 s. 48, and R.S.M. 1970, c.

R30 s. 45. [ 41 ] The objects of the 1934 Act were described in s. 3: Objects of the Act 3 The objects of this Act are to simplify the title to land, to give certainty thereto, to facilitate the proof thereof and to expedite dealings therewith; and the Act shall be construed in a manner to best give effect to those objects. [ 42 ] This provision is identical to s. 3 of the present-day RPA . [ 43 ] Aside from this case, it appears that s. 45 has only been mentioned in two other cases: Bellemare v. La Caisse Populaire de Saint Boniface Ltee. , [1998] M.J. No. 582 (QL) (C.A.) , and Heber v.

Winnipeg (City) et al. , 2000 MBQB 235 , 152 Man.R. (2d) 280 . Neither of these cases provides specific comment on s. 45(4). [ 44 ] The facts in Bellemare were (at para. 1): The plaintiff lost the title to his property in tax sale proceedings. He has sued to set aside the title the defendant Teillet obtained as a result of those proceedings. He appeals against the order of the motions court judge dismissing his application for

summary judgment and allowing, in part, the application of the defendant Teillet for

summary judgment dismissing the plaintiff’s claim. The motions court judge dismissed those portions of the plaintiff’s claim for relief related to the title to real property. His claim for damages remains alive.

[45] This court upheld most of the motion judge’s orders, but reinstated the plaintiff’s claims seeking title to the propertybased on the facts pleaded, notwithstanding the language of s. 45(2). The case later settled. [46] In Heber, there was a purchase through a tax sale. As in Bellemare, the property’s original owner sought to overturnthe sale. However, McCawley J. found that the RPA, specifically s. 45(2), estopped and barred the original owner from “taking anyactions to recover the land in question” (at para. 19) since title to the property was obtained in a bona fide manner.

In the result, theoriginal owner’s application to set aside the tax sale was dismissed, and the tax sale purchaser was granted an order for possession. [47] I note that s. 48(2) of the 1940 Act (a predecessor of s. 45) was the subject of comment in Manitoba Farm LoansAssociation v. Chapple (1944), (MB KB), 52 Man.R. 117 (K.B.). In that case, the court simply commented on thefinal nature of tax sales, and how they extinguish prior rights.

Again, no comments were made regarding s. 45(4). [48] In his text, Victor Di Castri, Q.C., Registration of Title to Land, looseleaf (Toronto: Thomson Reuters Canada Limited,1987) vol. 2, notes that tax sale procedures across Canada are not uniform (see para. 693). With respect to Manitoba, he observes that“[t]he Manitoba registrar’s involvement in the tax sale procedure is greater than that of his counterparts in other jurisdictions” (at para.701).

American historical academic commentary provides the perspective that the right of redemption has always depended uponexercising it within time frames fixed by law and the importance of notice in fixing that time. See, for example, Robert S. Blackwell &Frank Parsons, A Practical Treatise on the Power to Sell Land for the Non-Payment of Taxes, 5th ed. (Boston: Little, Brown andCompany, 1889); and Henry Campbell Black, A Treatise on the Law of Tax Titles: Their Creation, Incidents, Evidence, and LegalCriteria (St.

Louis: West Publishing Co., 1893). [49] The policy issue at the root of this appeal involves balancing the interests of original owners and the interests of taxpurchasers in obtaining clear title to lands purchased through tax sales. Early jurisprudence from this court indicates that, at that time,the balance favoured the tax purchaser and not the owner. See for example, McRae v. Corbett (1890), 1890 CanLII 117 (MB CA), 6Man.R. 426 (Q.B.), and Shewchuk v. Seafred, (MB CA), [1927] 3 D.L.R. 280 (Man. C.A.).

My colleague, Beard J.A.,in her dissent, correctly distinguishes the facts in these cases from the facts in this case. As noted earlier, these cases are indicative of theimportance of the strict rules of the tax sale regime, and, in my view, provide context for the issues in this appeal. [50] The tension between the interests of original owners and subsequent purchasers is evident in the more recent decision ofthe Supreme Court of Canada in Zeitel v. Ellscheid, (SCC), [1994] 2 S.C.R. 142. The three-judge majority emphasizedthat finality and certainty of title were the driving forces behind tax sale legislation.

Major J., for the majority, wrote (at pp. 152-53): Finally, it is necessary to consider the objects of the MTSA [Ontario’s Municipal Tax Sales Act, R.S.O. 1990, c. M60]. The statute existsto allow property which is the subject of tax arrears to be sold by a municipality. As purchasers must be assured of the integrity of title,the legislature has stated that, with few exceptions, once a tax deed is issued, it is final and binding. In recent years, the legislation hasbeen amended to better ensure finality. ….

Recognition of the proper roles of the legislature and the judiciary requires that the courts give effect to the plain meaning of the wordsof a duly enacted statute.

It is beyond the power of a court to interfere in a carefully crafted legislative scheme merely because it doesnot approve of the result produced by a statute in a particular case. …. [51] The minority agreed that “a primary goal of the legislature in enacting the MTSA must have been to create certainty andfinality in tax sales, thereby insuring that municipalities would have an effective mechanism for collecting tax arrears” (at p. 159). [52] The undercurrent of the majority’s reasons echoes the sentiments of this court in McRae, intimating that if the originalowners had been more diligent, they could have prevented this result.

On the other hand, the two dissenting judges in Zeitel felt that theprimary object of the legislation needed to be balanced against the “depth of the interests affected by municipal sales of the property ofindividuals” (at p. 160). They would have found the tax sale deed void in the circumstances. [53] The majority’s approach in Zeitel was applied by the Ontario Court of Appeal in Elliott v. Toronto (City) (1999), (ON CA), 43 O.R. (3d) 392, also involving the Municipal Tax Sales Act, R.S.O. 1990, c. M60.

Morden A.C.J.O., writingfor the court, wrote about the need to uphold the integrity of the tax sale process (at p. 401): … [T]here is no right to redeem after the one-year period simply upon paying the cancellation price because ss. 3(2), 5(1) and 9(2) makeit clear that the cancellation price may be paid within the year but that thereafter the land “shall be sold”.

The cut-off point is clearlyexpressed and there is no reasonable basis for thinking that the right which existed during the year continues after its expiration. …. . . . . . … I note that there is a good policy reason why there should be no right after the expiration of the year. .… The integrity of the saleprocess would be substantially impaired. There would be fewer potential purchasers and the bids could well be lower.

[ 54 ] He also observed, applying the Supreme Court of Canada’s dicta in Zeitel , that “[t]his is ‘a carefully-crafted legislative scheme’ which, of course, must be interpreted fairly in favour of persons whose rights are affected by it” (at p. 408). In the result, the claims of the original owners of the property were dismissed. [ 55 ] This court considered similar provisions in The Municipal Act , C.C.S.M., c. M225, in Pollock et al. v. Pedersen et al. , 2001 MBCA 25 , 153 Man.R. (2d) 255 . In that case, the original owner of property sold through a tax sale, unsuccessfully attempted to set aside the sale.

Helper J.A. made the following comments regarding the legislative intent animating the scheme (at para. 8): What appears clear from a review of Division 6 and both the enactment which preceded it and the subsequent amendments to the Act is that Division 6 was enacted solely to enable a municipality to recover tax arrears and costs owing to it by a property owner. The municipality’s obligation is to follow the statutory scheme and ensure the property owner is given every reasonable opportunity to protect his equity within a stated time frame.

The legislation imposes no duty upon a municipality to the public or further duty to the property owner except to ensure that the actual sale is “conducted in a fair and open manner”. I attribute a restrictive meaning to the phrase taken from s. 377(1) of the Act in accordance with the jurisprudence and in accordance with what I find to be the spirit and intent of the legislation. See McRae v. Corbett (1890), 1890 CanLII 117 (MB CA) , 6 Man.R. 426 at p. 449 (C.A.) . [emphasis added] [ 56 ] Questions of statutory

interpretation can be aided by the bilingual

interpretation process. Chartier C.J.M. recently explained this process in R. v. Dickson (W.A.) , 2013 MBCA 58 . This process is summarized in the text of The Honourable Mr. Justice Michel Bastarache et al., The Law of Bilingual

Interpretation (Markham: LexisNexis Canada Inc., 2008) (at p. 42): …. When presented with two versions of a statutory provision, an interpreter should immediately ask himself or herself a series of questions: 1. Do the versions say the same thing? 2. If the two versions differ, how do they differ? Absolutely? Or in a manner that is susceptible to reconciliation by way of shared meaning? 3. If the two versions are in absolute conflict, and there is no shared meaning, which of the two versions ought to be taken to represent the true meaning of the provision?

Or, if there is a shared meaning, is it compatible with the intention of parliament disclosed through other factors? [ 57 ] The French version of s. 45(4) reads as follows: Pouvoir du registraire de district 45(4) Le registraire de district peut, s’il le juge à propos :

a) proroger le délai imparti dans l’avis pour le rachat;

b) ordonner des modes substitutifs de signification de l’avis, auquel cas la signification vaut, pour le destinataire, signification à personne. [ 58 ] I note that there is no equivalent to the English word “and” at the end of s. 45(4)(

a) of the French version of s. 45(4). This, in combination with the permissive introductory wording (“peut, s’il le juge à propos”), would seem to support the view that subss. (

a) and (

b) were intended to be disjunctive; that is, separate powers that the district registrar could exercise independently from one another.

[ 59 ] However, when I consider s. 45(2) of the RPA , I can only conclude that the right to redeem is inextricably linked with the time period set out in the district registrar’s notice sent pursuant to s. 45(1) (c). The wording of s. 45(2) is somewhat cumbersome, but when I read it in the context of s. 45(1) , its meaning is clear: “in default of redemption … all persons, so served, are forever estopped and debarred from setting up any claim ” (emphasis added).

After their rights have been extinguished, the district registrar is required to register the tax purchaser as the owner of the property. [ 60 ] Given the history and purpose of the RPA , and when I consider the other provisions of that legislation, I conclude that the powers set out in s. 45(4) are to be read conjunctively, linking service of the notice with the power to extend the time for redemption fixed by the notice.

Section 45(4) addresses situations where there is a concern that an interested party has not received the district registrar’s notice that substitutional service is ordered and the time for redemption fixed by that particular notice for that recipient is extended. [ 61 ] In my view, if the Legislature had intended to grant the district registrar broader powers regarding extending the time for redemption, it would have used broader language, like it did in s. 138(5) of the RPA with respect to redemption from mortgage foreclosures: Extending time for redemption 138(5) Upon the application of a person appearing to be interested in the land, and upon sufficient cause being shown, the district registrar may extend the time for redemption.

This power is in addition to the power to order substitutional service, as set out in s. 138(6) of the RPA . [ 62 ] To summarize , it is my view that s. 45 of the RPA was intended to operate as follows: 1. Land with a value of more than $10,000 is purchased pursuant to a tax sale. 2. The municipal treasurer provides the district registrar with the certificate required by s. 45(1)(a). 3. The district registrar discharges his obligation under s. 45(1)(

b) that the tax sale was fairly and openly conducted. 4. The district registrar serves notice under s. 45(1)(

c) on all persons interested in the land requiring them, within the time limited by the notice, to contest the claim of the tax purchaser or to redeem the land. 5. If no pending litigation order is filed and the land is not redeemed within the time set out in the notice, all persons served with the notice are “forever estopped and debarred from setting up any claim to, or in respect of, the land so sold for taxes.” 6. The district registrar must register the tax purchaser as the owner of the land. [ 63 ] Applying the foregoing to this case, the extension of time to redeem was granted after the notice period under s. 45(1) (

c) had expired (approximately June 16, 2001, the notice being dated March 16, 2001). In other words, the extension was granted after the registered owner’s rights had already been extinguished. The extension by the district registrar was not related to substitutional service and, therefore, was not merely procedural. Rather, the extension affected Thunderbird’s substantive rights as tax purchaser to become owner of the property. [ 64 ] The judge held that s. 255(1) of the CWA obliged the district registrar to permit the redemption by the registered owners on October 29, 2001.

While I am not persuaded by Thunderbird’s arguments as to how s. 255(1) should be interpreted, s. 255(1) does not impact on my conclusions with respect to s. 45(4). [ 65 ] Section 255(1) formed part of the City of Winnipeg’s former tax sale regime in effect at the time. To put this

section in context, I think it helpful to briefly examine some of the surrounding provisions. [ 66 ] Thunderbird relies on s. 259(7) and s. 259(9) of the CWA , but these provisions only applied to tax sales of land valued under $10,000, which is not the case here. However, both s. 259(9) of the CWA and s. 45(2) of the RPA contemplate the expiry of the right to redeem after the expiry of the time limit in the notice sent pursuant to these sections.

In my view, this underscores the legislative intention to create a clear demarcation as to when the right of an original owner gives way to the right of the tax purchaser to obtain title. [ 67 ] As noted earlier, s. 245 of the CWA provided the right of redemption to an owner within the first year after the tax sale. If the land was not redeemed within a year, s. 253 of the CWA required the City treasurer to prepare a return certifying information regarding the non-redeemed lands, which was to be forwarded to the district registrar.

Section 255(1) would then kick-in, once the one- year redemption period created by s. 245 had expired. As well, upon the expiry of the s. 245 redemption period, the tax purchaser was

entitled to bring an application for title to the land (within two years), pursuant to s. 259(1). Three months from the date of service of thelast notice, if the land was not redeemed, the district registrar was to issue a certificate of title to the applicant (tax sale purchaser),pursuant to s. 261(1). [68]

Section 255, like s. 45 of the RPA, has a fairly lengthy history that can be traced back to 1894 and subsequentlegislation. See

An Act to Amend “The Assessment Act” S.M. 1894, c. 21, s. 5(d); The Winnipeg Charter, S.M. 1902, c. 77, s. 435; TheWinnipeg Charter, 1918, S.M. 1918, c. 120, s. 432; The Winnipeg Charter, S.M. 1940, c. 81, s. 414(1); The Winnipeg Charter, 1956,S.M. 1956, c. 87, s. 414(1); and The City of Winnipeg Act, S.M. 1971, c. 105, s. 270(1). [69] As described in Canadian Northern Railway v.

Rural Municipality of Springfield (1919), (MB CA),30 Man.R. 82 (C.A.) (at p. 83): The issue of tax-sale deeds by municipalities was abolished and a new method of making title to land sold at tax sales by application tothe district registrar was instituted in 1894 by sec. 5, ch. 21, 57 Vict.

The district registrar was authorized and bound to proceed in themanner therein prescribed, and issue a certificate of title unless it was shown to his satisfaction that the land was not liable for “the taxesor any portion of the taxes for which the same was sold.” …. [70] Di Castri’s only comment regarding these provisions is that “[t]he municipal legislation also contains provisionscomplementary to, but sometimes overlapping with, the registration procedure under the Real Property Act” (at para. 702) [71] There is no case law that has considered s. 255. [72] Thunderbird has attempted to draw a distinction between the opening language of ss. 245 and 255, arguing that s. 255does not apply to an original owner of property sold through a tax sale.

To review, s. 245(1) refers to “[t]he owner of any land which issold for non-payment of taxes or costs, or the heirs, executors, administrators, successors or assigns of the owner or any other person orthe city on his or their behalf”; s. 255(1) refers to “a person having an interest in a parcel of land … or a person on behalf of the person.” [73] I agree with the Province that s. 255 of the CWA merits a broader

interpretation. I can find no reason to conclude thatan original owner was meant to be excluded from the extended right of redemption provided by s. 255. The narrow

interpretationadvocated by Thunderbird is contrary to one of the policy objectives of the statute, which is to “ensure the property owner is given everyreasonable opportunity to protect his equity within a stated time frame” (Pollock at para. 8). Allowing a mortgagee or other creditor withan interest in the land to pursue redemption while barring the original owner from doing so would not accomplish this important policyobjective. [74] There is nothing in either the RPA or the CWA to support the view that the original owner’s right of redemption isextinguished at any earlier point in the process.

In my view, much clearer language would have been employed if the intention of theLegislature was to exclude the original property owners from the second phase of the right of redemption. [75] Moreover, the clearer wording of the subsequent The City of Winnipeg Charter, S.M. 2002, c. 39 (the Charter) supportsthe broader

interpretation advanced by the Province.

Section 386 of the Charter (similar to s. 245 of the CWA) is preceded by theheading “Redemption Through City,” while s. 390 (the equivalent of s. 255) is preceded by the heading “Redemption Through LandTitles Office.” Section 386(1) refers to “[a]ny person who has an interest in real property that has been sold for unpaid taxes, or anyother person on his or her behalf.”

Section 390 refers to “[a]ny person who has an interest in real property that has been sold for unpaidtaxes, or a person on their behalf.” While this language arguably broadens the initial right of redemption vis-à-vis the City (as comparedto the CWA), it makes it clear that the original owners of the property were intended to be encompassed by both sections. [76] I find no additional insight from the French versions of these provisions, which closely track the English phrasing.

They read as follows: s. 245(1) – “Le propriétaire d’un bien-fonds vendu pour non-paiement des taxes ou des frais, ses héritiers, sesexécuteurs testamentaires, ses administrateurs, ses successeurs ou ses ayants droit, toute autre personne ou la Ville, en son nom ou enleur nom”; s. 255(1) – “toute personne ayant un intérêt dans une parcelle mentionnée dans le rapport envoyé au registraire de district, outoute personne agissant en son nom.” [77] However, the right to redeem under s. 255(1) cannot override the very clear wording in s. 45(2) of the RPA, the effect ofwhich is that an original owner of property (worth more than $10,000) sold through a tax sale retains a right of redemption, but only untilthe expiry of the notice period set out in the notice issued by the district registrar pursuant to the RPA.

This is consistent with the three-month notice period pursuant to s. 261(1) of the CWA. To conclude otherwise would be to disregard the legislative objective of ensuringcertainty, simplicity and expediency of the Torrens land registry system created under the RPA and the indefeasibility of the taxpurchaser’s title to the land.

See Di Castri vol. 1 at para. 13 for commentary on the objects of the Torrens system. [78] Given all of this, the district registrar made a “mistake” under s. 182 of the RPA when he extended the time for theregistered owners to redeem the property and did not register Thunderbird’s transmission documents to transfer title into its name. Therefore, Thunderbird is entitled to damages pursuant to this section. Damages [79] Thunderbird asserts that the judge erred in his provisional assessment of damages, as explained earlier.

An appellatecourt owes deference to a judge’s assessment of damages unless there has been an error in principle or palpable and overriding error. SeeNaylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58 at para. 80, [2001] 2 S.C.R. 943, and H.L. v. Canada (Attorney

General), 2005 SCC 25, [2005] 1 S.C.R. 401. [80] The judge explained his reasoning, albeit briefly. He did not accept Thunderbird’s submission that its damage was theloss of the increase in fair market value of the property, best determined by the difference between the assessed values of the property in2001 ($80,000) (less the amounts paid to purchase the judgment and paid to the City) and in 2008 ($180,000), plus a further interestfactor to the date of judgment.

Rather, the judge concluded that Thunderbird’s loss was only its loss of equity that it would haveobtained if the property had been transferred to it by the district registrar. He accepted the Province’s argument that becauseThunderbird was in the business of purchasing properties, it could have purchased another similar property that would have provided thatincrease in value over the years that it sought from the Province. [81] I see no palpable and overriding error, as argued by Thunderbird, in how the judge approached his assessment ofdamages.

Given the evidence before the judge, his assessment of damages is entitled to deference. Conclusion [82] I would allow the appeal with respect to liability pursuant to s. 182 of the RPA and award damages as assessed by thejudge. [83] I would order costs in favour of Thunderbird for this appeal and for the trial. J.A. I agree: J.A. BEARD J.A. (dissenting) I. THE ISSUE [84] I agree with my colleague, Hamilton J.A., that this appeal is about whether the district registrar of the Winnipeg LandTitles Office (WLTO) had the power under s. 45(4) of The Real Property Act, C.C.S.M., c.

R30 (the RPA) to grant an extension of timeto the registered owners to redeem their property from tax sale proceedings. In addition, however, this appeal also requires this court toaddress the

interpretation of s. 45(2) of the RPA and the question of when the right to redeem a property from tax sale expires. Theresolution of both questions requires the application of the principles of statutory

interpretation. II. THE FACTS [85] I take no issue with the brief review of the facts as set out in Hamilton J.A.’s reasons. I may, however, add to them in thecourse of my reasons, as required. III. STANDARD OF REVIEW [86] I am not convinced that the applicable standard of review is that of correctness. I have some hesitation because, whilethis matter has been commenced as an action against, inter alia, the district registrar as is contemplated by ss. 182(1) and (2) of the RPA(now repealed), it has many of the hallmarks of a judicial review of an administrative decision. The principal issue is certainly thequestion of whether the district registrar erred in the

interpretation and application of his “home statute or statutes closely associated withit.” (See, for example, Manitoba v. Russell Inns Ltd. et al., 2013 MBCA 46, 291 Man.R. (2d) 244.) [87] Given that I have concluded that the district registrar and the application judge were both correct in their

interpretation ofthe statutes, which is the highest standard of review with the lowest level of deference for an administrative decision, it is not necessaryfor me to undertake an analysis to determine whether a lower standard with more deference should apply. IV. PRINCIPLES OF STATUTORY

INTERPRETATION [88] Because this matter deals with the

interpretation and application of a taxation statute, it is necessary to consider the rulesof

interpretation that are applicable to that specific type of legislation. Pierre-André Côté, with the collaboration of Stéphane Beaulac &Mathieu Devinat, The

Interpretation of Legislation in Canada, 4th ed. (Toronto: Thomson Reuters Canada Ltd., 2011) state (at p. 516): Historically, the courts have given a strict and literal

interpretation to taxation statutes. Today, however, they are interpreted in thesame manner as other legislation; however, in cases of reasonable doubt, the enactment is applied “in the favour of the subject”. [89] The authors further explain this approach as follows (at pp. 522-23): In [Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, (SCC), [1994] 3 S.C.R. 3 at para. 20],Gonthier J., for the Court, set out the principles which are to govern

interpretation of tax legislation. There are three propositions: 1)“the

interpretation of tax legislation should follow the ordinary rules of

interpretation”; 2) the choice between a strict or liberal reading of

the texts must not be guided by presumptions favourable to the State or the taxpayer, but by reference to the goal which underlines theprovision under

interpretation; 3) “only a reasonable doubt, not resolved by the ordinary rules of

interpretation, will be settled byrecourse to the residual presumption in favour of the taxpayer.” See also Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham: LexisNexis Canada Inc., 2008) at p. 534. [90] Given that the

interpretation of taxation statutes is to begin with the ordinary rules of

interpretation, I agree with mycolleague, Hamilton J.A., that the

interpretation of a statute begins with the modern approach to statutory

interpretation as explained bySullivan (quoting Elmer A. Driedger, The Construction of Statutes (Toronto: Butterworths, 1974) at p. 67), that being (at p. 1): … [T]he words of

an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with thescheme of the Act, the object of the Act, and the intention of Parliament. [91] Hamilton J.A. acknowledges that s. 45(4) of the RPA must be considered together with the other provisions of the tax salescheme set out in the RPA and The City of Winnipeg Act, S.M. 1989-90, c. 10 (the CWA) (now repealed) (at para. 36 herein). This bringsinto play the rules of statutory

interpretation applicable to related legislation, which were explained by Sullivan as follows (at p. 412): Statutes on the same subject (statutes in pari materia). Statutes enacted by a legislature that deal with the same subject are presumed tobe drafted with one another in mind, so as to offer a coherent and consistent treatment of the subject. The governing principle was statedby Lord Mansfield in R. v.

Loxdale [(1758), 1 Burr. 445, 97 E.R. 394]: Where there are different statutes in pari materia though made at different times, or even expired, and not referring to each other, theyshall be taken and construed together, as one system, and as explanatory of each other. The provisions of each are read in the context of the others and consideration is given to whether they are part of a single scheme. Thepresumptions of coherence and consistent expression apply as if the provisions of these statutes were part of a single Act.

Definitions inone statute are taken to apply in the others and any purpose statements in the statutes are read together. In referring to two or more statutes on the same subject the courts rarely inquire which statute was enacted first. When the issue doesarise, however, it sometimes causes confusion. The correct view is that previously enacted legislation may be considered and relied onin the same manner and to the same degree as subsequently enacted legislation – and vice versa. V.

THE MUNICIPAL TAX SALE SCHEME AND THE REGISTRATION OF TITLE TO LAND IN MANITOBA [92] The key to this appeal is understanding the municipal tax sale scheme and the land registration system in Manitoba. [93] The municipal tax sale scheme in Manitoba was succinctly described by Rinfret J., for the court, in Houghton LandCorporation v.

Rural Municipality of Ritchot, (SCC), [1927] S.C.R. 485 (at pp. 487-88): Under the Manitoba statute, the municipality does not issue a tax sale deed, but a certificate of the sale is delivered to the purchaser;and, if the land is not redeemed within one year thereafter, the treasurer of the municipality forwards to the district registrar for the landtitles district in which the land lies a return “showing all lands which were sold … and which have not been redeemed, the persons towhom sold, the amounts at which the lands were sold,” etc.

The purchaser then has the right to apply to the registrar for title to theland. A notice must be given to all persons interested, who have a further opportunity to redeem; and, if redemption is not made, or theproceedings are not stayed, a certificate of title under The Real Property Act, clear of all encumbrances, issues to the purchaser. [94] There have been minor changes over the years in some of the details of the legislation, but the procedure described byRinfret J. in Houghton in 1927 remains the same today under both the CWA and The City of Winnipeg Charter, S.M. 2002, c. 39 (theCharter).

While Rinfret J. provided a description of the statutory scheme for transferring title following a tax sale, Houghton dealt withan action to set aside a tax sale, and the court specifically stated that it was not dealing with Houghton Land Corporation’s right ofredemption, about which the court stated that it was not expressing any opinion. [95] The concepts that form the basis of the scheme set out in Houghton were developed, for the most part, in the 1800s, andboth the concepts and the history of tax sales are explained in greater detail in the texts cited at para. 48 herein.

The following concepts,some of which are referred to in Houghton, form the basis of the tax sale legislation today, and an understanding of them is of vitalimportance to the

interpretation of the statutes at issue here, so I will explain them further: (

i) a tax sale certificate, a tax sale deed and a certificate of title; (ii) the right to redeem vs. setting aside a tax sale; and (iii) the legal effects of a tax sale vs. the registration of title. (

i) A Tax Sale Certificate, a Tax Sale Deed and a Certificate of Title

[96] Since at least the 1800s, modern legal systems dealing with the title to property and the sale of property for municipaltaxes have been governed by statute, so the applicable procedures must be determined by examining the relevant legislation. [97] Historically, when a property was sold for tax arrears, the municipality issued a tax sale certificate to the purchaser,which entitled him to obtain a tax sale deed for the land once the statutory and other sale conditions had been met, unless the propertywas redeemed or the sale was set aside.

There was an alternative procedure in effect in some jurisdictions, whereby a tax sale deed wasissued at the time of the tax sale, but it was a conditional deed that did not take effect until the conditions were met. [98] It is clear from Houghton, quoting from the decision of this court in Canadian Northern Railway v.

Rural Municipality ofSpringfield (1919), (MB CA), 30 Man.R. 82, that, at one time, Manitoba had a procedure incorporating the use of bothtax sale certificates and tax sale deeds, but the use of tax sale deeds was abolished in 1894 in favour of a system whereby themunicipality issued a tax sale certificate and the purchaser had to apply to the district registrar for a certificate of title in order to becomethe owner of the property (at p. 489).

Thus, the tax sale deed was replaced by the certificate of title, which is the same system thatremains in effect in Manitoba today. [99] While chapters have been written on the minutia of the legal effect of a tax sale certificate and a tax sale deed, a

summarywill suffice for the purposes of this case. Summarizing from Robert S. Blackwell & Frank Parsons, A Practical Treatise on the Power toSell Land for the Non-Payment of Taxes, 5th ed. (Boston: Little, Brown and Company, 1889), and Henry Campbell Black, A Treatise onthe Law of Tax Titles: Their Creation, Incidents, Evidence, and Legal Criteria (St. Louis: West Publishing Co., 1893), it is clear that,after the tax sale and after the delivery of the tax sale certificate but before the delivery of the tax sale deed, the tax purchaser had only alien on the property for the purchase money.

He had no title, no right of possession (unless permitted by statute), no entitlement to rentsor profits, and all existing liens and interests remained in effect. [100] The effect of the tax sale title deed was less clear and had been altered from time to time by legislation, such that it isdifficult to make more than a general statement as to its effect. That said, depending on the governing legislation, a tax sale deed was,historically, either prima facie or absolute proof that the purchaser had title, in fee simple, to the property, although that title was oftenopen to challenge on many grounds.

The degree to which the title was secure (i.e., indefeasible) depended on the provisions of thelegislation, which varied considerably between jurisdictions. It was the uncertainty of title and title deeds that led to the creation of landregistry systems for the registration of ownership and the granting of registered title documents, one of which was the Torrens landregistry system. More will be said of this later. [101] As noted above, Manitoba abolished the tax sale deed many years ago, although it still remains in use in other Canadianjurisdictions, including Ontario.

Currently, ownership of the vast majority of the land in Manitoba is proved by way of a certificate oftitle issued by a district registrar pursuant to the RPA. The provisions of the RPA, and in particular s. 59, go a considerable distance tomaking a title contained in a certificate of title issued by a district registrar indefeasible by guaranteeing the condition of the title for eachproperty that is described in the certificate of title. (ii) The Right to Redeem vs.

Setting Aside a Tax Sale [102] There are two procedures relevant to the current appeal by which a tax purchaser can lose its right to have title to theproperty issued in its name following purchase of the property at a tax sale. The first occurs where the property is redeemed by aninterested party, which includes an owner, and the second is where the tax sale is set aside.

Redemption [103] Redemption: In the context of a tax sale, a redemption occurs when the owner or another interested party pays theoutstanding taxes, penalties and costs as set out in the governing legislation and, thereby, stops the sale of the property. In a system thatincludes tax sale deeds, any deed issued in the face of a valid redemption would have no force or effect – it would be void.

According tos. 248 of the CWA, “[f]rom the time of payment of the full amount of redemption money as required in this Act, all rights and interests ofthe purchaser in the land shall cease.” (See, also, s. 388 of the Charter.) [104] Historical view: Hamilton J.A. states (at para. 48 herein): …. American historical academic commentary provides the perspective that the right of redemption has always depended uponexercising it within time frames fixed by law and the importance of notice in fixing that time. ….

While the applicable law determines when a property can be redeemed, and some jurisdictions fixed the time for redemption in relationto the date of the sale of the property or the service of notice, it must be noted that, historically, there were many different tax saleprocedures in effect and many jurisdictions did not fix specific times or time limits for redemption in relation to the giving of notice. [105] Blackwell describes three different time frames for redemption (vol. 2, at para. 709): (

i) the period of redemption is set as a defined time period from the date of the tax sale; (ii) redemption can be made at any time before the execution of the tax sale deed; and (iii) redemption can be made at any time before the registration of the tax sale deed. [106] The last two time frames were not limited by the notice of redemption but, rather, continued thereafter. The last twosystems were explained by Blackwell (at paras. 710-11):

Execution of the Deed as a Limit. – In Kansas, the owner has a right to redeem at any time before execution of the tax deed ; and if he tenders to the treasurer of the county where the land was sold the amount of the sale with the interest required by law, prior to acknowledgement and delivery of the deed, the deed is a nullity. So in Iowa it is held that it is the tax deed and not the tax sale that divests the title of the owner; and if a redemption takes place before the execution of the deed, it divests the lien of the tax, and leaves the land as free as if the taxes had been paid before the sale. ….

Wisconsin; Any Time before the Deed is Recorded . – The statute of Wisconsin authorizing the redemption of lands sold for taxes “at any time before the deed executed upon such sale is recorded” … is not void as impairing the obligation of a contract or divesting a title previously acquired by and absolutely vested in the holder of the deed, it having always been the law that there might be a redemption at any time before the tax deed was recorded …; and a deed which has been left with the register for record, having the date of its reception indorsed thereon, but which has neither been spread upon the record nor entered in the general index as required by [s.] 142 … ([s.] 143 declaring that a deed so entered in the index shall be considered as recorded at the time so noted), is not “recorded” within the meaning of said statute relating to redemption.

Whether an entry in the index, without the deeds being actually recorded in extenso , [per Black’s Law Dictionary , 4th ed., – “… at full length; from beginning to end, leaving nothing out”], would be sufficient to preclude the right of redemption (a right favored in the law) is not here decided; but the court intimate an opinion that “the courts might perhaps reasonably construe the statute authorizing it [redemption], in the language above quoted, to signify or intend an actual recording in extenso .” [emphasis added] [ 107 ] From that, it can be seen that there are, essentially, two tax sale schemes that operate from different perspectives as regards the right of redemption.

The first scheme relies on the date of the tax sale or notice to fix the time frame of the redemption period, with the effect that the statutory redemption period is also a limitation period for redemption. The second scheme permits an unlimited redemption period, unrelated to the date of the tax sale or the notice of redemption, ending only when the tax purchaser obtains title, either through a tax sale deed or registration.

In the second system, the statutory redemption period does not affect the right to redeem, but is a statutory delay or postponement of the tax purchaser’s right to apply to become the owner of the property following the tax sale. [ 108 ] I have already noted that, in Manitoba, the Legislature has replaced the tax sale deed with the certificate of title as the document establishing ownership of land sold at a tax sale.

To understand how the current system of redemption from tax sale functions in Manitoba, it is necessary to examine both the RPA and the CWA (and now the Charter ), as they are inextricably intertwined in this regard. It will become clear that the CWA is considerably more detailed than the RPA , which has only one

section dealing with a discrete issue within the much larger, and very detailed, scheme in the CWA . [ 109 ] The CWA and the RPA : Under the CWA , the right to redeem following a tax sale occurs in two stages. The first arises under s. 245(1) , which provides that the owner of the land which has been sold for taxes “may within one year from the day of sale, redeem the land by paying or tendering to the treasurer [of the City of Winnipeg]” the amounts set out in the section.

According to s. 248 , “[f]rom the time of payment of the full amount of redemption money as required in this Act, all rights and interests of the purchaser in the land shall cease.” [ 110 ] The second arises under s. 255(1), which provides that any person having an interest in the land can redeem the property. Thunderbird argues that this

section does not include the owners of the property, who are limited to redeeming under s. 245(1) . I agree with Hamilton J.A. that s. 255(1) should be given a wider meaning to include the owners (at paras. 72-76 herein).

That provision states: Redemption before issue of title 255(1) Notwithstanding anything to the contrary in this Act, a person having an interest in a parcel of land … may at any time after one year from the date of the sale and before the issue of title pursuant to the sale, redeem the parcel of land by paying to the district registrar [the amounts set out]. [emphasis added] [ 111 ] Redemption under s. 255(1) is made by payment to the district registrar, rather than to the city treasurer, and can be made at any time during the period commencing one year after the tax sale and ending with the issue of title pursuant to the sale .

This provision is stated to apply “[n]otwithstanding anything to the contrary in this Act.” [ 112 ] The tax purchaser’s right to apply for title is found in s. 259(1) of the CWA , which provides that, following one year from the date of the tax sale and during the next two years thereafter, the tax purchaser can secure title to the land by filing an application for title with the district registrar. These times are consistent with those in s. 255(1) . [ 113 ] There are two different procedures governing an application for title by a tax purchaser, depending on the value of the land.

If the land has a value of $10,000 or less, ss. 259(7) , (8) and (9) of the CWA apply, while s. 45 of the RPA and s. 261(1) of the CWA apply to properties with a value of more than $10,000. The procedures are: Properties with a value of $10,000 or less: Under s. 259(7) of the CWA , once the tax purchaser files its application for title with the district registrar, the district registrar must serve a notice to either contest that claim or redeem the land within the time set out in the notice.

This notice is to be served by registered mail on all persons having an interest in the property, in the form set out in the legislation. Section 259(9) deals with title issuing and states that “[a]ll persons to whom the notice referred to in subsection (7) is sent, failing to

comply with the requirements of the notice within the time limit, shall be forever estopped and debarred from setting up any claim to orin respect of the land referred to” (emphasis added). Thus, an interested party is estopped and debarred from making any claim to theproperty if it has not either redeemed the property or taken proceedings to contest the claim of the tax purchaser within three monthsfrom the mailing of notice.

Properties with a value of more than $10,000: Under s. 45(1) of the RPA, the district registrar must cause to be served on all interestedpersons a notice to contest the tax sale or redeem the land within the time limited by the notice.

The effect of the notice is set out ins. 45(2), which states: Effect of notice 45(2) In default of a pending litigation order being filed and in default of redemption, before the registration as owner of the personentitled under the tax sale, all persons, so served, are forever estopped and debarred from setting up any claim to, or in respect of, theland so sold for taxes; and the district registrar shall register the person entitled under the tax sale as owner of the land. [emphasis added] Section 261(1) of the CWA deals with the issuance of title.

It provides that, if the land has not been redeemed within three months fromthe date of service of the last notice required to be served, the district registrar, on being satisfied that the purchaser has paid the requiredfunds and is entitled to title, shall issue a certificate of title to the applicant and “thereafter no person, except the tax purchaser … shall bedeemed to be entitled to the land included in the certificate of title … or to any interest therein” (emphasis added). [114] Section 261(1) does not say that it is limited to properties with a value of more than $10,000, but this is the only reasonableinference to be drawn.

It is similar to s. 259(9), in that both provisions deal with the issuance of title, but, unlike s. 259(9), s. 261(1) doesnot contain any reference to subs. (7) of s. 259, and it does not contain the limiting words “failing to comply with the requirements of thenotice within the time limit ….” Therefore, if s. 261(1) were found to apply to properties with a value of $10,000 or less, it woulddirectly and fundamentally conflict with s. 259(9). [115] On the other hand, s. 261(1) does accord with s. 45 of the RPA.

Firstly, s. 45 does not deal with the matters set out in s.261(1) regarding the steps to be followed before the issuing of title following a tax sale, so s. 261(1) is necessary to define the procedurefor a tax sale within s. 45. Secondly, and more importantly, s. 261(1) does not contain the redemption limitation in s. 259(9) requiringredemption in compliance with notice “within the time limit” set out therein; instead, it does contain the same redemption provisionfound in s. 45(2), permitting redemption at any time before the issuance of a certificate of title.

As already noted, s. 45(2) specificallystates that an interested party will be “forever estopped and debarred from setting up any claim” to the property “[i]n default of a pendinglitigation order being filed and in default of redemption, before the registration as owner of the person entitled under the tax sale ….” [116] As can be seen, the right to redeem property with a value of $10,000 or less ends three months after the mailing of thenotice (s. 259(9) of the CWA), while the right to redeem a property with a value of more than $10,000 continues right up until the districtregistrar issues a certificate of title to the tax purchaser (ss. 255(1) and 261(1) of the CWA). [117] The Charter: The conclusion that an interested party has the right to redeem the property right up until title issues to thetax purchaser is consistent with the Charter that replaced the CWA.

Section 245(1) of the CWA was re-enacted as s. 386(1) of theCharter, except that it has been extended to include any person interested in the property, rather than applying to just the owners.

Section 255(1) of the CWA has been re-enacted as s. 390 of the Charter, which repeats the provisions of s. 255(1), specifically statingthat “[a]ny person who has an interest … may, after the expiration of one year after the date of sale of the property and before acertificate of title is issued to the tax purchaser of the property, redeem the property from tax sale by paying to the district registrar [theamounts set out therein]” (emphasis added). [118] The provisions regarding the issuance of title, formerly found in ss. 259(9) and 261(1) of the CWA, (referred to as “transferof title” in the Charter) have changed, in that the procedure for issuing title where the property has a value of $10,000 or less no longerexists and there is now only one procedure for all properties.

Section 396 of the Charter mirrors and confirms the provisions ofs. 261(1), in that it states: Persons entitled to redeem 396 Every person required under subsection 395(1) to be served with a notice in respect of an application for title to real property in taxsale who does not, (

a) exercise the right of redemption of the property from the tax sale before title is issued to the tax purchaser; or . . . . . is forever estopped and debarred from setting up any claim to or in respect of the property. [emphasis added] [119] Thus, the tax sale system that was described in Houghton and Shewchuk v. Seafred, (MB CA), [1927] 3D.L.R. 280 (Man. C.A.), in 1927, permitting redemption of the property right up until title issues to the tax purchaser continues to the

present day, as it was contained in the CWA and is now found in the Charter . [ 120 ]

Summary: In

summary, under the CWA , there are two separate procedures related to an application to issue (transfer) title to a tax purchaser: - If the property has a value of $10,000 or less, the district registrar effects service by registered mail, and any interested party wishing to redeem the property must do so within the time limit set out in the notice, failing which he is forever estopped and debarred from setting up any claim to the land. This system follows those systems that, historically, required that the property be redeemed within a specific period of time from the tax sale or the service of notice.

This system no longer exists under the Charter , - If the property has a value of more than $10,000, the district registrar must effect service personally, unless there has been an order for substitutional service ( s. 45(4) (

b) of the RPA ), and any interested party can redeem the property at any time before the tax purchaser is registered as the owner, failing which all persons who were served are forever estopped and debarred from setting up a claim to the land. This follows the system that, historically, permitted redemption up until either the execution of a tax sale deed or the registration of that deed.

This is the system that continues under the Charter . [ 121 ] While the rights related to a property with a value of $10,000 or less are more limited than those where the property has a value of more than $10,000, this differential treatment based on value is common in many areas of the law, the best-known example being the small claims procedure for determining civil claims with a value of less than $10,000. Setting Aside a Tax Sale [ 122 ] An application to set aside a tax sale is a very different procedure from a redemption.

While the current matter does not involve an application to set aside the tax sale, it is important to be aware that this procedure exists to understand the jurisprudence. [ 123 ] Under the CWA , an application to set aside a tax sale is dealt with in s. 274: Grounds of setting aside tax sale 274 No tax sale shall be annulled or set aside except on the following grounds: (

a) that the sale was not conducted in a fair and open manner; (

b) that the taxes for the years for which the land was sold had been paid; or (

c) that the land was not liable for the taxes or any portion thereof for which it was sold. [ 124 ] Given the indefeasibility of title, to which I refer below, the courts have been very loath to grant such applications following the issuance of a certificate of title . (See the decisions referred to herein at paras. 138-53 below.) Irregularities in the tax sale are more often dealt with by way of

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