Law360 Canada ( July 30, 2025, 3:11 PM EDT) -- Appeal by Attorney General of Canada (Canada) from chambers judge’s finding that funds from property sale were not tax “overpayment” subject to refund, but rather “net sale proceeds”; cross-appeal by Wu from chambers judge giving permission to Canada Revenue Agency (CRA) to apply the funds to all tax debts. In a court-ordered foreclosure sale of property owned by Gu, the purchaser remitted a 25 per cent holdback to the CRA pursuant to s. 116(5) of the Income Tax Act (ITA), as Gu did not confirm Canadian residency. Under the sale order, after paying the mortgagee, any remaining proceeds were to be paid to the respondent judgment creditor Wu. The CRA took the position that any excess holdback funds must be refunded to Gu as a tax refund, not paid to Wu in accordance with the sale order priorities. Canada maintained that the CRA had no ability to do anything other than pay any excess to Gu as a tax refund, and that it was entitled to apply the holdback not only to tax owing on the sale of the property, but also to any other Part I tax owed by Gu....