British Columbia v. PT Car and Yacht Rental Inc.

The primary issue in this application was whether the Crown in right of the Province of British Columbia had priority over the Respondent for taxes owing to it by the judgment debtor. The Respondent had loaned money to the debtor for the purchase of a motor vessel which was registered under the Canada Shipping Act. However, a mortgage was not registered under that Act. Instead the Respondent’s interest was secured by a security agreement. Pursuant to the provisions of the Personal Property Security Act of British Columbia (the “PPSA”), if the Respondent had registered its security interest under the PPSA it would have had a “super priority” but the Respondent failed to register in time. The Crown, who was owed tax for the importation of the vessel into the Province, argued that the Social Services Tax Act of British Columbia (the “SSTA”) gave it a priority. The motions Judge held that the SSTA gave the Crown priority over all other security interests or liens except a purchase money security interest (“PMSI”) which was the type of security the Respondent held. The Crown argued that the exception for PMSI interests in the SSTA should be read as excepting only registered PMSI security interests. The motions Judge held, however, that the SSTA did not limit the exception to registered PMSI interests and cautioned against reading words into a statute. In the result, the Respondent was given priority.