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Real Property Law - Real property tax - Delinquent property taxes - Tax sales - Sale proceeds

Thursday, January 26, 2017 @ 7:00 PM  

Appeal by Poplar Point First Nation from an order paying out of court sale proceeds from a municipal tax sale of its property. The City recovered $5,843 in tax arrears and costs from the tax sale, paying the remainder of $76,000 into court. Poplar was three weeks late in applying for the payment out of court of the proceeds. It explained that it did not receive the notice of payment into court because the notice was sent to the assessed and sold property, and that, because it had other properties subject to tax sale proceedings, it was confused about the date that the one-year limitation period started running on the subject property. Poplar acted promptly once it discovered that it had missed the deadline. The City brought a counter-application for payment of the monies. The judge dismissed Poplar’s application on the basis that he lacked jurisdiction to grant relief from forfeiture. He granted the City’s counter-application.

HELD: Appeal allowed. The appeal court had jurisdiction to grant relief from forfeiture in the present circumstances. It was appropriate in the present case to grant relief from forfeiture, given the amount of the proceeds versus the amount of tax arrears, and Poplar’s prompt actin once it realized it had missed the deadline to seek payment of the proceeds out of court. Forfeiture in the present case was a remedy intended to bring finality to the tax sale process. It was not a punitive sanction to be levied against Poplar, where the City had already been made whole in the tax sale proceedings. As such, there was no absolute bar to granting relief from forfeiture. The Municipal Act itself, by requiring the payment of surplus funds into court, made it clear that there was no absolute forfeiture of sale proceeds on default. The Act did not provide for an automatic forfeiture, but only a deemed forfeiture under specific circumstances. The court retained jurisdiction over the process for paying out funds from court, as such payment required an application.