Executive Summary: Key Legal and Evidentiary Issues

• Prescription of a tax debt was the central issue underlying the plaintiff's request to cancel a legal mortgage.
   
• Sworn declarations from the company's president formed the uncontested evidentiary basis for the Court's findings.
   
• CRA's failure to respond to a formal notice or appear in the proceedings led the Court to decide by default.
   
• Articles 2925 and 3063 of the Civil Code of Quebec governed whether the mortgage could still be enforced after more than 16 years.
   
• No recovery action or rights-preserving step had been taken by the CRA since the mortgage was published in 2010.
   
• Costs were addressed under article 340 of the Code of Civil Procedure given the absence of any contestation.
   

Facts of the case

D.M.S Senneterre applied to the Court of Quebec to strike a registration from the land register affecting an immovable it owns in Senneterre, in the Abitibi registration division. The registration at issue was a legal mortgage published by the Canada Revenue Agency (CRA) on June 11, 2010, under number 17,268,362, against lot number 5,372,987. The mortgage secured a tax debt of approximately $21,031.64, plus interest, owed by the plaintiff for the 1999 to 2001 taxation years. The CRA was duly served on June 22, 2026, but no representative appeared, and the agency never responded to a formal notice sent by the plaintiff's counsel by registered mail at the end of 2025. Notably, the plaintiff had already succeeded in having a separate legal mortgage published by the Agence du revenu du Québec cancelled on the same property, while the CRA remained silent throughout.

Policy and legislative provisions at issue

The plaintiff's application relied on articles 2925 and 3063 of the Civil Code of Quebec, which govern prescription and its effect on the enforceability of a legal mortgage securing a debt. Rather than disputing the amount of the underlying tax debt, the plaintiff argued that the debt itself was prescribed, and that this prescription extended to the mortgage registered to secure it. On the question of costs, article 340 of the Code of Civil Procedure was applied, giving the Court discretion to decline awarding costs where circumstances warrant.

Reasoning and analysis

Given the CRA's total absence from the proceedings and the proof of service on file, the Court proceeded by default. It found that more than 16 years had passed since the mortgage was published in 2010, during which time the CRA took no action to recover the debt or otherwise preserve its rights. In the absence of any contrary evidence, the Court accepted the plaintiff's evidence, including sworn declarations from the company's president, as sufficient to establish that the debt—and by extension the mortgage—was prescribed. The Court concluded that the application was well-founded in both fact and law.

Ruling and overall outcome

The Court ruled in favour of D.M.S Senneterre, the successful party, granting the application in full. It declared the balance of the legal mortgage extinguished by prescription and ordered the cancellation of the registration published under number 17,268,362, relating to lot 5,372,987 in the Abitibi registration division. The Land Registry Officer was directed to carry out the cancellation upon receipt of conforming applications and payment of required fees. No monetary award, damages, or costs were granted or ordered in favour of either party; the judgment expressly states the outcome is "without costs."