Poulin v. Serge Morency et Associés Inc., [1999] 3 S.C.R. 351

Gilles Poulin Appellant

v.

Serge Morency et Associés Inc. Respondent

and

RBC Dominion Securities Inc. Mis en cause

Indexed as: Poulin v. Serge Morency et Associés Inc.

File No.: 26340.

1999: April 21; 1999: September 17.

Present: L’Heureux‑Dubé, Gonthier, Cory, McLachlin, Iacobucci, Bastarache and Binnie JJ.

on appeal from the court of appeal for quebec

Bankruptcy -- Property of bankrupt -- Exemption from seizure -- Registered retirement savings plan -- Whether sums contributed by employee to Government and Public Employees Retirement Plan continued to be unseizable after being transferred into RRSP – Act respecting the Government and Public Employees Retirement Plan, R.S.Q., c. R‑10, s. 222 -- Code of Civil Procedure, R.S.Q., c. C-25, art. 553(12) -- Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 67(1)(b).

In 1991, after his termination of employment, the appellant asked the Government of Quebec’s Commission administrative des régimes de retraite et d’assurance (CARRA) to transfer into his RRSP the sums that stood to his credit in the Government and Public Employees Retirement Plan. The appellant’s RRSP is a self‑directed fixed‑term annuity plan. Under this plan, the funds are invested mainly in guaranteed investment certificates or in Canadian securities, and may be withdrawn in whole or in part, subject to the conditions imposed by tax legislation. The appellant exercised that right on one occasion. In 1993, the appellant made an assignment into bankruptcy. The amount transferred by CARRA in 1991 was worth $77,603 on December 31, 1993. The trustee requested the reimbursement of the appellant’s RRSP. The appellant refused and filed an application for declaratory judgment in which he asked that the sums held in his RRSP be declared unseizable. The Superior Court found that the amount transferred by CARRA was unseizable, together with an amount for appreciation in proportion to the total increase in the value of the plan. However, it declared the portion of the RRSP funds derived from the appellant’s personal contributions to be seizable. The Court of Appeal, in a majority decision, reversed that judgment and declared that all of the assets of which the appellant’s RRSP was composed were seizable.

Held: The appeal should be dismissed.

Section 67 of the Bankruptcy and Insolvency Act refers to the laws that apply in the province within which the bankrupt resides and within which the property is situated in order to determine what property is exempt from execution or seizure. Articles 1980 and 1981 C.C.L.C. set out the principle that seizability is the rule and unseizability the exception. Provisions that depart from this principle must be narrowly construed. Article 553(12) C.C.P. includes in the list of unseizable property anything declared unseizable “by law”. In the instant case, s. 222 of the Act respecting the Government and Public Employees Retirement Plan provides that “[a]ll sums paid or reimbursed under Titles I and IV [of the Act] are inalienable and unseizable”. The sums that were reimbursed to the appellant and then transferred into his RRSP are not included in the expression “sums paid or reimbursed”. It cannot be said that the appellant holds “sums” in his RRSP. When the sum reimbursed was transferred at the appellant’s request into his RRSP, its nature, and the appellant’s rights in it, changed. That sum was used to acquire an RRSP, that is, to create an onerous contract or purchase a “tax envelope”. As of that moment, and from then on, the appellant’s rights, and the sum invested, were governed by the contract. Moreover, the only way not to produce an absurdity and to give some meaning to the words “inalienable” and “incessible” in s. 222 is to interpret the expression “sums paid or reimbursed” to mean “the right to payment or to reimbursement of sums”. Once that right has been extinguished, that is, once the sums have in fact been paid or reimbursed, their inalienable and unseizable nature has been permanently lost. This interpretation of the expression “sums paid or reimbursed” is consistent with the manner in which other declarations of unseizability have been construed. However, if the sum reimbursed to the appellant had been transferred directly into an unseizable plan, it would have remained sheltered from any seizure. The appellant instead chose a seizable RRSP.

It is also impossible to accept that the appellant’s RRSP is unseizable because of the source of the funds used to create it, because the wording of s. 222 is not sufficiently clear to establish a new case of investment, reinvestment or real subrogation. Although there is a general principle of personal subrogation in civil law, our law contains no general principle of real subrogation and applies it only in a fragmented fashion. In addition, investment and reinvestment cases are exceptional and are expressly provided for in the law. When the Quebec legislature intended to extend the unseizability of certain sums derived from a retirement plan to the RRSP into which they had been transferred, it did so expressly and clearly.

Cases Cited

Referred to: Re Neuls (1985), 1985 2367 (SK CA), 56 C.B.R. 132; Quebec Association of Protestant School Boards v. Wadsworth, J.E. 92-1421; Re Moysey (1977), 1977 1518 (SK QB), 80 D.L.R. (3d) 152; Lachance-Gariépy v. Page, [1983] C.A. 562; Caisse populaire de Lévis v. Maranda, [1950] B.R. 249; Cie Trust Royal v. Caisse populaire Laurier, 1989 426 (QC CA), [1989] R.J.Q. 550; Morgentaler v. The Queen, 1975 8 (SCC), [1976] 1 S.C.R. 616; Dubois v. The Queen, 1985 10 (SCC), [1985] 2 S.C.R. 350; Barreau du Québec v. Morin, 1988 1044 (QC CA), [1988] R.J.Q. 2629.

Statutes and Regulations Cited

Act respecting Family Assistance Allowances, R.S.Q., c. A-17, s. 16.3 [ad. 1989, c. 4, s. 2].

Act respecting the Government and Public Employees Retirement Plan, R.S.Q., c. R-10, ss. 48 [am. 1983, c. 24, s. 1; am. 1987, c. 47, s. 26; idem, c. 107, s. 170; am. 1988, c. 82, s. 20; am. 1990, c. 5, s. 25; repl. 1990, c. 87, s. 41], 51 [am. 1983, c. 24, s. 1; am. 1987, c. 47, s. 28; idem, c. 107, s. 173; am. 1988, c. 82, s. 23; am. 1990, c. 5, s. 26], 54 [am. 1983, c. 24, s. 1; am. 1987, c. 47, s. 31; am. 1988, c. 82, s. 26], 152, 222 [ad. 1983, c. 24, s. 1].

Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 67(1)(b) [am. 1992, c. 27, s. 33].

Civil Code of Lower Canada, arts. 1154, 1980, 1981, 2552.

Civil Code of Québec, S.Q. 1991, c. 64, arts. 418, 450, 450(3), 451, 1230, 1244, 1651, 2497, 2644, 2645.

Code of Civil Procedure, R.S.Q., c. C-25, arts. 552 [am. 1986, c. 55, s. 3; am. 1992, c. 57, s. 296], 553(7) [am. 1979, c. 37, s. 29; am. 1980, c. 21, s. 4; am. 1989, c. 55, s. 30], 553(11) [am. 1986, c. 55, s. 4; am. 1992, c. 57, s. 297], 553(12).

Décret n^o 92-755 du 31 juillet 1992, J.O., August 5, 1992, 10530, s. 44.

Loi n^o 91-650 du 9 juillet 1991, J.O., July 14, 1991, 9228, s. 15.

Pension Benefits Act, 1992, S.S. 1992, c. P-6.001, s. 63(1).

Regulation respecting supplemental pension plans, (1990) 122 O.G. II, 2318, s. 28(3).

Supplemental Pension Plans Act, R.S.Q., c. R-15.1, ss. 2(4), 98, 264 [am. 1997, c. 19, s. 19].

Authors Cited

Baudouin, Louis. Le droit civil de la province de Québec: Modèle vivant de droit comparé. Montréal: Wilson & Lafleur, 1953.

Carbonnier, Jean. Droit civil, t. 3, Les biens, 14^e éd. Paris: P.U.F., 1991.

Côté, Pierre-André. The Interpretation of Legislation in Canada, 2nd ed. Cowansville, Que.: Yvon Blais, 1991.

Croze, Hervé. “Le décret du 31 juillet 1992 instituant de nouvelles règles relatives aux procédures civiles d’exécution: Guide de lecture”, J.C.P. 1992.I.3635.

Dictionnaire de droit privé et Lexiques bilingues, 2^e éd. Comité de rédaction: Paul-André Crépeau et autres. Cowansville, Qué.: Yvon Blais, 1991, “incessibilité”, “cession”.

L’Heureux, Nicole, et Édith Fortin. Droit bancaire, 3^e éd. Cowansville, Qué.: Yvon Blais, 1999.

Paré, Michel-B., Lucie Quesnel et Germain Carrière. “Les régimes d’épargne-retraite”, [1986] 1 C.P. du N. 151.

Ranouil, Véronique. La subrogation réelle en droit civil français. Paris: L.G.D.J., 1985.

Terré, François, et Philippe Simler. Droit civil -- Les biens, 5^e éd. Paris: Dalloz, 1998.

APPEAL from a judgment of the Quebec Court of Appeal, 1997 10011 (QC CA), [1997] R.J.Q. 2421, 16 C.C.P.B. 293, [1997] Q.J. No. 2950 (QL), reversing a decision of the Superior Court, J.E. 95-1850. Appeal dismissed.

Mireille Arseneault and Nathalie Giguère, for the appellant.

Daniel O’Brien and Marie-Pierre Allard, for the respondent.

English version of the judgment of the Court delivered by

Gonthier J. ‑‑

I - Issue

1 This appeal raises a very specific issue relating to the interpretation of the expression “sums paid or reimbursed” found in s. 222 of the Act respecting the Government and Public Employees Retirement Plan, R.S.Q., c. R‑10, and the extent to which those sums are unseizable under that section. The issue may be put as follows: did the sums contributed by the appellant to the Government and Public Employees Retirement Plan continue to be unseizable after they were transferred into a registered retirement savings plan (RRSP)?

II - Facts

2 The appellant is a physician. From March 17, 1981 to November 30, 1990, while he was employed by the Government of Quebec, he contributed to the Government and Public Employees Retirement Plan (Retirement Plan). On November 30, 1990, the accumulated value of the appellant’s retirement plan was $55,982.31.

3 On December 20, 1990, the appellant acquired a self‑directed RRSP. The Société nationale de fiducie was the trustee, and McNeil, Mantha Inc. was the agent. On January 21, 1991, the appellant asked the Government of Quebec’s Commission administrative des régimes de retraite et d’assurance (CARRA) to transfer into his RRSP the sums that stood to his credit in the Retirement Plan. Since there was a waiting period of 210 days from the date of termination of employment before the contributions could be refunded, the appellant had to complete a second application for reimbursement, which he did on July 2, 1991. It was not until September 3, 1991 that CARRA finally sent the Société nationale de fiducie a cheque for $55,982.31, as reimbursement of the contributions paid by the appellant.

4 In the meantime, the appellant had an RRSP that he held with Lévesque Beaubien Geoffrion Inc. transferred to McNeil, Mantha Inc. On March 31, 1991, the appellant’s two accounts with McNeil, Mantha Inc. were merged. On May 15, 1991, the appellant requested that his initial RRSP be replaced by an “unseizable RRSP” and a self‑directed fixed‑term annuity plan was then substituted for the original plan. The appellant designated his sister as beneficiary. That designation is revocable. On August 31, 1991, before the reimbursement was received from CARRA, the appellant had accumulated $16,778.36 in his RRSP.

5 In early 1992, the mis en cause acquired all accounts and plans held by McNeil, Mantha Inc., and Montreal Trust became the trustee of the appellant’s RRSP. On February 10, 1992, the mis en cause RBC Dominion Securities Inc. sent the appellant a letter informing him that he had become its customer, and that [translation] “[b]ased on current trends in the case law, your ‘unseizable’ RRSP account could in fact become seizable”.

6 Under the appellant’s fixed‑term annuity plan, the funds are invested mainly in guaranteed investment certificates or in Canadian securities, and they may be withdrawn in whole or in part, subject to the conditions imposed by tax legislation. The appellant exercised that right when he withdrew $4,950 from his RRSP on February 26, 1993. He invested an additional $1,974 on November 4, 1992.

7 On April 6, 1993, the appellant made an assignment into bankruptcy. On December 31, 1993, the amount transferred by CARRA ($55,982.31) was worth $77,603. The other sums invested by the appellant were worth $20,011 on that date.

8 On April 5, 1994, the respondent requested the reimbursement of the appellant’s RRSP. When the appellant refused, it informed him by letter dated November 24, 1994, that it would act unilaterally unless proceedings were taken to contest the trustee’s position. On December 6, 1994, the appellant served an application for declaratory judgment on the respondent in which he asked that the sums held in his RRSP be declared unseizable. In the Superior Court, Landry J. found that an amount equal to the amount transferred by CARRA was unseizable, together with an amount for appreciation in proportion to the total increase in the value of the plan. However, he declared the portion of the RRSP funds derived from the appellant’s personal contributions to be seizable. That decision was reversed by the Quebec Court of Appeal, which declared, by a majority, that all of the assets of which the appellant’s RRSP was composed were seizable. Rousseau‑Houle J.A. dissented.

III - Relevant Statutory Provisions

9 Bankruptcy and Insolvency Act, R.S.C., 1985, c. B‑3 (B.I.A.)

67. (1) The property of a bankrupt divisible among his creditors shall not comprise

(b) any property that as against the bankrupt is exempt from execution or seizure under the laws of the province within which the property is situated and within which the bankrupt resides. . . .

Code of Civil Procedure, R.S.Q., c. C‑25 (C.C.P.)

553. The following are exempt from seizure:

(7) Benefits payable under a supplemental pension plan to which an employer contributes on behalf of his employees, other amounts declared unseizable by an Act governing such plans and contributions paid or to be paid into such plans;

(12) Anything declared unseizable by law.

Act respecting the Government and Public Employees Retirement Plan, R.S.Q., c. R‑10

222. All sums paid or reimbursed under Titles I and IV are inalienable and unseizable.

IV - Judicial History

A. Superior Court of Quebec, J.E. 95‑1850

10 For the purposes of his analysis, Landry J. drew a distinction between the funds accumulated by the appellant in the Retirement Plan and the RRSP accumulated through his personal investments. He dealt first with the funds that derived from the Retirement Plan. After noting that s. 222 of the Act respecting the Government and Public Employees Retirement Plan, unlike the legislative provision at issue in Re Neuls (1985), 1985 2367 (SK CA), 56 C.B.R. 132 (Sask. C.A.), on which the respondent relied, refers to sums reimbursed and not to “moneys payable”, Landry J. said he was of the view that the legislature had intended to express a different intention by using different terminology, that is, to protect “the principal” and not only “the act of reimbursement”. Landry J. cited Quebec Association of Protestant School Boards v. Wadsworth, J.E. 92‑1421 (Sup. Ct.), in support of that position. He concluded that by virtue of the combined effect of art. 553(7) C.C.P. and s. 222 of the Act respecting the Government and Public Employees Retirement Plan, the sums reimbursed to the appellant after his employment terminated were unseizable and continued to be unseizable even when they were invested in an RRSP with the mis en cause. He pointed out that the appellant had at no time had in his possession the sums transferred.

11 On the question of the sums that had been accumulated through personal investments, Landry J. held that they were seizable, given that the designated beneficiary of the appellant’s fixed‑term annuity RRSP was not one of the beneficiaries referred to in art. 2552 C.C.L.C., and accordingly that the requirements in order for s. 178 of the Act respecting Trust Companies and Savings Companies, R.S.Q., c. S‑29.01, to apply had not been met.

B. Quebec Court of Appeal, [1997 10011 (QC CA)](https://www.canlii.org/fr/qc/qcca/doc/1997/1997canlii10011/1997canlii10011.html), [1997] R.J.Q. 2421

12 Since the appellant had withdrawn his incidental appeal on the question of whether the sums that derived from his personal investments were unseizable, the only issue to be resolved by the Court of Appeal was the issue relating to the funds accumulated in the Retirement Plan by the appellant and later transferred into his RRSP.

(1) Deschamps J.A. (Tourigny J.A. concurring)

13 Deschamps J.A. pointed out that most decisions at the trial level in which an RRSP has been declared to be unseizable when the funds used to create it were initially unseizable have relied either on one another or on Re Moysey (1977), 1977 1518 (SK QB), 80 D.L.R. (3d) 152, a decision of the Saskatchewan Court of Queen’s Bench. She was of the opinion that a cautious approach must be taken in examining common law decisions, and that because of the decision of the Saskatchewan Court of Appeal in Re Neuls, supra, the position adopted in Re Moysey, supra, no longer carries the weight that was formerly attributed to it.

14 Deschamps J.A. found it difficult to include the securities held in the appellant’s self‑directed RRSP in the “sums paid or reimbursed” that s. 222 of the Act respecting the Government and Public Employees Retirement Plan declares to be unseizable. After noting that cases of reinvestment are exceptional, she pointed out that the appellant’s rights in respect of his self‑directed RRSP had nothing in common with the rights he had in respect of the Retirement Plan. In her view, a creditor of protected rights can rely on the unseizable nature of the sums only so long as they retain the characteristics that are the reason the law protects them.

15 Deschamps J.A. rejected the argument that the different wording of s. 222 of the Act respecting the Government and Public Employees Retirement Plan, that is, the use of the expression “sums paid or reimbursed” instead of the expression “benefits payable”, meant that the position adopted by the Court of Appeal in Lachance‑Gariépy v. Page, [1983] C.A. 562, could be rejected, and the protection against seizure extended to the reinvestment of sums derived from the Retirement Plan. In her view, the words “sums paid or reimbursed” are insufficient to create a separate body of property that would allow the protection against seizure to be perpetuated.

16 In conclusion, Deschamps J.A. wrote, at p. 2433:

[translation] Because only the property specifically set out in the Act is unseizable, because the vehicle chosen by the respondent is not one such type of property, because neither s. 222 of the Act nor art. 553 C.P. create a separate body of property which would allow for tracing, the securities held in his RRSP devolved in their entirety to the trustee.

(2) Rousseau‑Houle J.A. (dissenting)

17 Rousseau‑Houle J.A. was of the opinion that the trial judge was correct in declaring the sum accumulated by the appellant while he was contributing to the Retirement Plan, which was then transferred into an RRSP, to be unseizable. In her opinion, the sums that were reimbursed to the appellant did not cease to be benefits paid to an employee under a supplemental pension plan when they were reimbursed. Accordingly, those sums were exempt from seizure in the new retirement plan to which they were directly transferred, regardless of whether or not the new plan was seizable. Rousseau‑Houle J.A. found that the amendments to art. 553(7) C.C.P. and the new wording of s. 222 of the Act respecting the Government and Public Employees Retirement Plan clearly indicated that the legislature intended to declare both sums paid and sums reimbursed after withdrawal from the Retirement Plan to be unseizable. Moreover, those changes meant that the decision of the Quebec Court of Appeal in Lachance‑Gariépy v. Page, supra, and the decision of the Saskatchewan Court of Appeal in Re Neuls, supra, no longer applied. Rousseau‑Houle J.A. concluded as follows, at p. 2424: [translation] “If the sums paid derive from a pension fund that was itself unseizable by law, they continue to be unseizable in the new retirement plan in which they have been reinvested.”

V - Analysis

A. Introduction

18 Section 67 B.I.A. refers to the laws that apply in the province within which the bankrupt resides and within which the property is situated in order to determine what property is exempt from execution or seizure. Articles 1980 and 1981 C.C.L.C. read as follows at the time the appellant made an assignment into bankruptcy:

1980. Whoever incurs a personal obligation, renders liable for its fulfilment all his property, moveable and immoveable, present and future, except such property as is specially declared to be exempt from seizure.

However, a creditor may agree with his debtor that the latter will be bound to fulfil his obligation only on the property they describe and which is affected with a legal cause of preference in favour of the creditor.

1981. The property of a debtor is the common pledge of his creditors, and where they claim together they share its price rateably, unless there are amongst them legal causes of preference.

The following are the corresponding articles of the Civil Code of Québec, S.Q. 1991, c. 64:

2644. The property of a debtor is charged with the performance of his obligations and is the common pledge of his creditors.

2645. Any person under a personal obligation charges, for its performance, all his property, movable and immovable, present and future, except property which is exempt from seizure or property which is the object of a division of patrimony permitted by law.

However, the debtor may agree with his creditor to be bound to fulfil his obligation only from the property they designate.

These articles set out the principle that seizability is the rule and unseizability the exception. Provisions that depart from this principle must be narrowly construed: see Caisse populaire de Lévis v. Maranda, [1950] B.R. 249, at pp. 259 (Galipeault C.J.) and 262 (Bissonnette J.). In addition, given that all declarations that property is unseizable affect the rights of the creditors, they may be expected to be worded clearly and precisely.

19 The Quebec legislature has included declarations that property is unseizable in a number of statutes, but they are found primarily in arts. 552 and 553 C.C.P. Paragraph 7 of art. 553 C.C.P. concerns supplemental pension plans. Since para. 12 of that article includes in the list of unseizable property anything declared unseizable “by law”, and s. 222 of the Act respecting the Government and Public Employees Retirement Plan declares “[a]ll sums paid or reimbursed under Titles I and IV” of that Act to be unseizable, it is not necessary to decide whether art. 553(7) C.C.P. is applicable and whether the Retirement Plan to which the appellant contributed constitutes a supplemental pension plan despite the fact that it is not governed by the Supplemental Pension Plans Act, R.S.Q., c. R‑15.1 (s. 2(4) of that Act excludes from its application pension plans established by an Act). The issue can be decided by referring solely to s. 222 of the Act respecting the Government and Public Employees Retirement Plan. But before looking further at that section, it is necessary to examine the overall scheme of the Act respecting the Government and Public Employees Retirement Plan, and the nature of an RRSP in Quebec civil law.

B. [Act respecting the Government and Public Employees Retirement Plan](https://www.canlii.org/en/qc/laws/stat/cqlr-c-r-10/latest/cqlr-c-r-10.html)

20 The Act respecting the Government and Public Employees Retirement Plan is divided into five titles. Section 222 is part of Title V, “Miscellaneous and Transitional Provisions”. Title I, to which s. 222 refers, includes provisions regarding the scope of application of the Act, pensionable salary, years of service, contributions and contributory amounts, benefits, and transfer and purchase of service. Titles II and III deal with regulations and the administration of retirement plans, respectively. Title IV deals with “Temporary Measures”, including sabbatical leave with deferred salary, early retirement, anticipation of pension benefits, and persons placed on reserve.

21 Under that Act, an employer to which the Act applies must withhold the contribution set by the Act from its employee’s salary. It must then pay that contribution to CARRA at the same time as its own contribution to the plan. By contributing to the Retirement Plan, an employee becomes entitled to receive a pension when he or she retires. The annual amount of the pension is based on the employee’s average pensionable salary and years of service.

22 Reimbursement of contributions is governed by Title I of the Act respecting the Government and Public Employees Retirement Plan, and more specifically by Division III of Chapter IV. At present, an employee who has at least two years of service and who ceases to participate in the Retirement Plan is not entitled to have his or her contributions reimbursed. Such an employee is entitled only to a deferred annuity: see s. 51. However, at the time when the appellant ceased to be employed, s. 48 read as follows:

48. Except where section 21 applies, if an employee ceases to participate in the plan before becoming entitled to a pension or to a deferred annuity, he may, if he has at least two years of service, apply for a deferred annuity or obtain, provided he does not again participate in the plan and subject to section 58, the refund of his contributions as long as he has not attained 65 years of age.

In case of death, the contributions shall be refunded to his spouse or, if he has no spouse, to his assigns.

Thus in 1990 an employee who ceased to participate in the Retirement Plan had the option of choosing a refund or a deferred annuity. However, an employee who ceased to be employed before becoming eligible for a pension, and who was at least 45 years old and had at least 10 years’ service, was not entitled to have his or her contributions refunded. Such an employee was entitled only to a deferred annuity or to a sum representing up to 25 percent of the actuarial value of that deferred annuity and a deferred annuity adjusted to take into account the payment of that sum (s. 51). The deferred annuity became payable to the pensioner only on the date of his or her sixty‑fifth birthday (s. 54).

23 We see from reading s. 48 of the Act respecting the Government and Public Employees Retirement Plan that the appellant had the option of leaving his contributions in the Retirement Plan and requesting a deferred annuity instead of reimbursement of his contributions. However, he chose to request a refund and to invest the reimbursed sum in an RRSP.

C. Nature of an RRSP

24 There are many varieties of RRSPs in Canada. They are offered by different institutions, including life insurance companies, trust companies, banks, caisses populaires, loan companies and securities brokers. RRSPs are tax creatures (M.-B. Paré, L. Quesnel and G. Carrière, “Les régimes d’épargne‑retraite”, [1986] 1 C.P. du N. 151, at p. 169). The Quebec Court of Appeal has examined the question of the nature of an RRSP in Quebec civil law, and concluded that an RRSP was simply a creditor‑debtor relationship governed by the clauses of the contract between the two parties: see Cie Trust Royal v. Caisse populaire Laurier, 1989 426 (QC CA), [1989] R.J.Q. 550. Authors have written that [translation] “the retirement savings plan is not property, but rather an agreement that produces rights and obligations or, if you prefer, a tax envelope by means of which certain property may be acquired”: see Paré, Quesnel and Carrière, supra, at p. 171.

25 The sums invested in an RRSP are therefore used to acquire other property. Accordingly, the nature of those sums changes, as do the rights of the person who invested them: they are then determined by the agreement between the parties.

26 In the instant case, the appellant acquired a self‑administered RRSP offered by McNeil, Mantha Inc. Under the rules governing that RRSP, the trustee undertook to purchase an annuity payable to the Annuitant or to his or her spouse within the 120 days preceding the maturity date of the RRSP. The Annuitant in turn undertook not to contribute more than the maximum exemption permitted under federal and provincial income tax legislation. It is stated that [translation] “[t]he contributions and any increase in the value thereof, in accordance with the instructions received from the Annuitant, may be retained in cash, invested in guaranteed investment certificates or invested, provided that no such investment is prohibited by the Income Tax Act or the regulations.” (Emphasis added.) The appellant was therefore entitled to give instructions as to the investments to be made, something that he could not do when he was contributing to the Retirement Plan. Moreover, he had the option of withdrawing the funds invested, in whole or in part, at any time, subject to the conditions imposed by tax legislation. As I noted earlier, the appellant exercised that right by withdrawing $4,950 from his RRSP in February 1993.

D. Meaning of the Expression “Sums Reimbursed”

27 Section 222 of the Act respecting the Government and Public Employees Retirement Plan declares certain “sums” (“sommes” in the French version) to be inalienable and unseizable. In the instant case, the appellant had a sum of money reimbursed to him. After the appellant applied for reimbursement and met all of the legal and administrative requirements, a sum of money equivalent to the contributions he had paid was transferred directly into his RRSP with McNeil, Mantha Inc., in accordance with his instructions. While the appellant never had that sum of money in his possession, he did have it reimbursed and his “claim” against CARRA was extinguished.

28 The appellant contends that the sums held in his RRSP are the same as the sums reimbursed by CARRA and that their nature has not changed. I cannot accept that argument, for two main reasons.

29 First, it cannot be said that the appellant holds “sums” in his RRSP. It will be recalled that under the appellant’s fixed‑term annuity plan, the funds invested are used to acquire guaranteed investment certificates, Canadian securities or other types of investments. As a result, when the sum reimbursed was transferred at the appellant’s request into his RRSP, its nature, and the appellant’s rights in it, changed. That sum was used to acquire an RRSP, that is, to create an onerous contract or purchase a “tax envelope”. As of that moment, and from then on, the appellant’s rights, and the sum invested, were governed by the contract. The appellant’s rights under his RRSP are in fact different from the rights he had under the Retirement Plan, the most striking difference undoubtedly being that he had the option of withdrawing the funds invested in his RRSP, in whole or in part, at any time.

30 In short, what the appellant “holds” under his RRSP are rights that are conferred on him in the contract he has with the trustee and the agent. Those rights are not “sums paid or reimbursed”, as the nature of those sums has changed. As a result, the declaration in s. 222 of the Act respecting the Government and Public Employees Retirement Plan that the sums are unseizable no longer applies to them.

31 The second reason why I cannot accept the appellant’s argument is that I am of the opinion that s. 222 of the Act respecting the Government and Public Employees Retirement Plan does not protect the sums once they have been taken out of the Retirement Plan. If we were to interpret the expression “sums paid or reimbursed” in such a way as to cover the sums once they have been taken out of the Retirement Plan, the result would be absurd. If we read s. 222, we see that not only has the Quebec legislature declared sums paid or reimbursed to be unseizable, but it has also declared them to be inalienable (“incessible” in the French version). Of what use might inalienable or unassignable sums of money be? Such sums could not be alienated in order to be applied to a payment and would quite simply be useless. Consequently, if we consider the nature of a sum of money, saying that a certain sum is inalienable or unassignable is nonsense, and produces an absurd result. As Dickson J. wrote in Morgentaler v. The Queen, 1975 8 (SCC), [1976] 1 S.C.R. 616, at p. 676:

We must give the sections a reasonable construction and try to make sense and not nonsense, of the words. We should pay Parliament the respect of not assuming readily that it has enacted legislative inconsistencies or absurdities.

Concerning this rule of interpretation, see also Dubois v. The Queen, 1985 10 (SCC), [1985] 2 S.C.R. 350, at pp. 363‑64, and P.‑A. Côté, The Interpretation of Legislation in Canada (2nd ed. 1991), at pp. 373 et seq. The only way not to produce an absurdity and to give some meaning to the words “inalienable” and “incessible” in s. 222 of the Act respecting the Government and Public Employees Retirement Plan is to interpret the expression “sums paid or reimbursed” to mean “the right to payment or to reimbursement of sums”. Moreover, the concept of incessibilité to which the French version of s. 222 refers usually applies only to rights. It is defined in the Dictionnaire de droit privé et Lexiques bilingues (2nd ed. 1991), at p. 301, as follows: [translation] “Attribute of a right not susceptible of assignment.” (Emphasis added.) The definition of the term “cession” (“assignment”) is found at p. 81: [translation] “Inter vivos transfer of a right, by onerous or gratuitous contract, in particular in relation to a claim.” (Emphasis added.) Once the right to payment or to reimbursement has been extinguished, that is, once the sums have in fact been paid or reimbursed, their inalienable and unseizable nature has been permanently lost. It goes without saying, however, that sums paid or reimbursed that are transferred into another unseizable “vehicle” acquire the unseizable nature of their new “vehicle”. Consequently sums reimbursed that are directly transferred into an unseizable “vehicle” remain sheltered from any seizure. Moreover, the appellant could have asked that the sums reimbursed be transferred into an unseizable plan, both at the time of reimbursement and later before his assignment into bankruptcy, but he did not do so, choosing instead a seizable RRSP.

32 I do not believe that interpreting the expression “sums paid or reimbursed” as meaning “the right to payment or to reimbursement of sums” does any violence to the text of s. 222 of the Act respecting the Government and Public Employees Retirement Plan. On the contrary, this interpretation is consistent with the manner in which other declarations of unseizability have been construed. As Deschamps J.A. pointed out in her reasons, if we examine the situations in which the law provides for unseizability, the desire to protect claims for support in the broad sense seems to prevail. The objective is often to prevent seizures in the hands of third parties, that is, seizures at source. We need only consider art. 553(11) C.C.P., which declares a portion of “gross salaries and wages” to be unseizable.

33 As Côté notes, supra, at pp. 236 et seq., the meaning of words depends in part on the context in which they are used. The overall context of an enactment includes, inter alia, the other provisions of the statute, the related statutes and the other rules of the legal system. See Barreau du Québec v. Morin, 1988 1044 (QC CA), [1988] R.J.Q. 2629 (C.A.), at pp. 2639‑40. The manner in which other declarations of unseizability have been worded and construed is therefore a relevant factor to be considered in construing s. 222 of the Act respecting the Government and Public Employees Retirement Plan. The fact that the Quebec legislature has clearly specified in certain enactments that it intends to grant protection for support claims after they are paid is also highly relevant. For example, s. 16.3 of the Act respecting Family Assistance Allowances, R.S.Q., c. A‑17, provides that “[a]llowances are unassignable and unseizable. They do not become part of the patrimony of the person who receives them.” (Emphasis added.) Unlike the wording of that section, the wording of s. 222 of the Act respecting the Government and Public Employees Retirement Plan does not extend the protection against seizure to the period after payment or reimbursement.

34 In short, because the nature of the sums reimbursed has changed, and because s. 222 of the Act respecting the Government and Public Employees Retirement Plan cannot be interpreted as protecting the sums that have been reimbursed once they have been taken out of the Retirement Plan, I believe that the sums that were reimbursed to the appellant and then transferred into his RRSP are not included in the expression “sums paid or reimbursed” in s. 222.

E. Property That Is Unseizable by Virtue of the Origin of the Funds

35 The appellant further submits that an RRSP may become unseizable if the funds that were paid into it were themselves unseizable under a specific statute. I cannot accept that argument. That would amount to arbitrarily extending the meaning of the expression “sums paid or reimbursed” and creating a new category of unseizable property. It would also go against the rule that exemptions from seizure should be narrowly construed, since, it must be recalled, they are exceptions.

36 The appellant’s position, namely that there is property that is unseizable by virtue of the source of the funds used to acquire it, raises the problem of how to circumscribe the protection afforded by a declaration of unseizability. Where do we draw the line? Is the property unseizable in perpetuity, regardless of what use is made of the sums declared to be unseizable? Carrying the unseizable nature of certain sums over to an RRSP or to something else, as well as the very concept of “source of the funds”, necessarily require that the rules of investment and reinvestment, and, it could even be argued, of real subrogation, be applied, since [translation] “[t]he new property takes the place of the former property and is subject to the same legal status”: see J. Carbonnier, Droit civil, vol. 3, Les biens (14th ed. 1991), at p. 118. Reinvestment is in fact described as [translation] “a particular application of real subrogation”: see L. Baudouin, Le droit civil de la province de Québec (1953), at p. 1035. Although there is a general principle of personal subrogation in civil law (arts. 1154 C.C.L.C. and 1651 C.C.Q.), our law contains no general principle of real subrogation, and applies it only in a fragmented fashion: see art. 450(3) C.C.Q. concerning the private property of the spouses, and art. 2497 C.C.Q. relating to the payment of an insurance indemnity to creditors holding hypothecs on the damaged property. See also Carbonnier, supra, at p. 118; V. Ranouil, La subrogation réelle en droit civil français (1985), at p. 21; F. Terré and P. Simler, Droit civil -- Les biens (5th ed. 1998), at pp. 334‑37. In addition, investment and reinvestment cases are exceptional, and are expressly provided for in the law (see, for example, art. 418 C.C.Q. concerning the family patrimony, arts. 1230 and 1244 C.C.Q. concerning substitution and arts. 450 and 451 C.C.Q. concerning partnership of acquests). There is no provision of this sort in the case before us, and the expression “sums paid or reimbursed” cannot reasonably be construed in such a way as to create a new case of investment or reinvestment and to protect any use of such sums against seizure.

37 When the Quebec legislature intended to extend the unseizability of certain sums derived from a retirement plan to the RRSP into which they had been transferred, it did so expressly and clearly. For instance, s. 264 of the Supplemental Pension Plans Act provides:

264. Unless otherwise provided by law, the following amounts or contributions are unassignable and unseizable:

(1) all member or employer contributions paid or payable into the pension fund or to the insurer, with accrued interest;

(2) all amounts refunded or pension benefits paid under a pension plan or this Act and derived from member or employer contributions;

(3) all amounts awarded to the spouse of a member following partition or any other transfer of benefits effected pursuant to Chapter VIII, with accrued interest, and the benefits deriving from such amounts.

Except as far as they derive from additional voluntary contributions, any of the above‑mentioned amounts that have been transferred to a pension plan contemplated by section 98, with accrued interest, any refunds of and benefits resulting from such amounts, and any pension or payment having replaced a pension pursuant to section 92 are also unassignable and unseizable. [Emphasis added.]

Section 98 of the Supplemental Pension Plans Act, to which s. 264 refers, allows a member of a pension plan governed by that Act to transfer certain sums into another pension plan governed by the Supplemental Pension Plans Act or into any pension plan or annuity contract prescribed by regulation. Section 28(3) of the Regulation respecting Supplemental Pension Plans, (1990) 122 O.G. II, 2323, reads as follows:

28. The pension plans not governed by the Act and to which transfers may be made under sections 98 and 100 of the Act are:

(3) for the contributions and interest referred to in subparagraph 1 of the first paragraph of section 98 of the Act, a registered retirement savings plan or a deferred profit‑sharing plan; [Emphasis added.]

By the combined effect of ss. 264 and 98 of the Supplemental Pension Plans Act and s. 28 of the Regulation, the unseizable nature of certain sums that are held in a pension plan governed by that Act may therefore be carried over to an RRSP. As I noted earlier in para. 19 of these reasons, the Retirement Plan into which the appellant paid is not governed by the Supplemental Pension Plans Act, and the Act respecting the Government and Public Employees Retirement Plan contains no provision stipulating that the unseizable nature of the sums reimbursed is carried over to an RRSP.

38 It is also worth noting that other legislatures have also thought it advisable to make specific statutory provision for carrying over to an RRSP the unseizable nature of certain funds, in order to avoid any doubt. We might refer, for example, to s. 63(1) of the Saskatchewan Pension Benefits Act, 1992, S.S. 1992, c. P-6.001, which provides:

63(1) Subject to subsection (3), benefits, moneys that have been transferred to another plan, to a prescribed RRSP or to any other prescribed retirement plan that is registered pursuant to the Income Tax Act (Canada), including moneys transferred before January 1, 1993, and moneys earned by those transferred moneys:

(a) may not be assigned, charged, alienated or anticipated; and

(b) are exempt from execution, seizure or attachment.

39 French legislation also expressly provides, in s. 15 of Loi n^o 91-650 du 9 juillet 1991, J.O., July 14, 1991, 9228, and s. 44 of Décret n^o 92-755 du 31 juillet 1992, J.O., August 5, 1992, 10530, that when a bank account is credited with an amount from an unseizable source, the unseizability is transferred to the extent of that amount to the balance in the account. In other words, it has provided an exception to the rule of the fungibility of money and instituted [translation] “a genuine theory of unseizable claims”: see H. Croze, “Le décret du 31 juillet 1992 instituant de nouvelles règles relatives aux procédures civiles d’exécution: Guide de lecture”, J.C.P. 1992.I.3635, at p. 560. No such theory as yet exists in Quebec law: see N. L’Heureux and É. Fortin, Droit bancaire (3rd ed. 1999), at pp. 90‑91.

F. Change of Wording

40 The appellant attempted to base an argument on the change in the wording of s. 222 of the Act respecting the Government and Public Employees Retirement Plan. The former s. 152 was worded as follows:

152. The benefits payable under this act are inalienable and unseizable.

It is worth reproducing the wording of s. 222 in order to facilitate comparison between the two sections:

222. All sums paid or reimbursed under Titles I and IV are inalienable and unseizable.

The appellant contends that the use of the term “reimbursed” in s. 222 of the Act respecting the Government and Public Employees Retirement Plan can mean nothing other than that the unseizable nature of funds that derive from the Retirement Plan is preserved, because otherwise [translation] “the legislature would have spoken in vain”. I do not agree with this submission. In view of the clear language used in s. 264 of the Supplemental Pension Plans Act and the meaning of the expression “sums reimbursed”, I am unable to conclude that by using the word “reimbursed” in s. 222 of the Act respecting the Government and Public Employees Retirement Plan the legislature intended to create a new case of reinvestment.

41 That does not mean, however, that the legislature spoke in vain when it amended s. 222. The previous version of s. 222 dealt only with “benefits payable”, and did not cover reimbursements of contributions. The sums reimbursed could therefore be seized, even in the hands of third parties. That is in fact what had happened in Lachance‑Gariépy v. Page, supra. In that case, the Court of Appeal concluded that a seizure in third party hands became possible once an application for reimbursement had been made, because as of that moment participation in the Retirement Plan was terminated and the right to withdraw amounts from the plan had become part of the debtor’s patrimony. Section 222 of the Act respecting the Government and Public Employees Retirement Plan now protects both benefits payable and sums reimbursable. Because the right to reimbursement is unseizable, seizures in the hands of third parties are no longer permitted, and the sums are protected until they are withdrawn from the Retirement Plan.

G. Conclusion

42 In summary, I am of the opinion that the sums contributed by the appellant to the Retirement Plan did not retain their unseizable nature after they were transferred into an RRSP. The expression “sums paid or reimbursed” in s. 222 of the Act respecting the Government and Public Employees Retirement Plan does not cover sums that have been withdrawn from the Retirement Plan. In addition, the sums used to acquire an RRSP cannot be described as “sums reimbursed” under the Act respecting the Government and Public Employees Retirement Plan, because the nature of those sums, and the appellant’s rights to those sums, changed upon their being used to fund that onerous contract. Lastly, it is not possible to accept the appellant’s argument that his RRSP is unseizable because of the source of the funds used to create it, because the wording of s. 222 is not sufficiently clear to establish a new case of investment, reinvestment or real subrogation.

VI - Disposition

43 For the foregoing reasons, I am of the opinion that the appeal should be dismissed with costs throughout.

Appeal dismissed with costs.

Solicitors for the appellant: Arseneault, Moreau, Webster, Charlesbourg.

Solicitor for the respondent: Daniel O’Brien, Québec.