T-2224-75
Plan A Leasing Limited (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Gibson J.—Toronto, March 24;
Ottawa, April 8, 1976.
Income tax—Capital cost allowance—Whether plaintiff
owned or leased building—'L" conveying land to "G. W." and
building thereon to "159" Limited—''159" Limited leasing
land from "G.W."—Plaintiff acquiring all rights to property
by purchasing building and accepting assignment of lease of
land—Plaintiff claiming ownership of building—Income Tax
Regulations 1100(1)(a),(3)(b), 1102(5), Sch. B, class 3, Sch. H,
class 13.
Plaintiff claimed capital cost allowance as owner of the
building at 159 Bay St., Toronto. What occurred was that the
original owner, L, split the ownership of the land from the
building by conveying the land to the Great-West Company
and the building to 159 Bay Street Limited. 159 Bay Street
Limited simultaneously leased the land from Great-West.
Plaintiff then acquired all rights to the property by purchasing
the building and accepting an assignment of the lease of the
land. By virtue of the original splitting of the land and building
by L, plaintiff claimed to be owner of the building. Defendant
claimed that in Ontario it is impossible to undertake separate
conveyances-of the- land and-then-the-building_ther-eon_after-it_
has been built, and that what the grantee of the building
received was only a leasehold interest. Alternatively, it was
argued that if more rights were given to the grantee, they were
subject to the terms of the lease (entered into collaterally with
the deed to the building). One provision of the lease was a
requirement that the grantee of the building convey it without
compensation to the lessor of the lands on termination of the
lease. As a result, the grantee's rights, it was argued, amounted
to no more than a leasehold interest.
Held, allowing the appeal, plaintiff owned the building for
the period in question, and can deduct capital cost allowance of
5% on a declining basis. In law, title to land and to a building
thereon can be conveyed separately when the parties have
specially contracted to do so. The usual rule of law that the
building is part of the freehold can be abrogated by contract
between the parties. They can completely sever the right of title
and interest in the freehold in the building from that in the
land, even though the building continues to be annexed to the
land. The fact that the first subject deed of the freehold of the
building did not include in it a conveyance of easements does
not change the legal effect of the deed; a further transaction
was entered into (the lease with Great-West) and it accom
plished the same result as would have been had a conveyance of
easements been included in the same deed as the conveyance of
the freehold of the building. As to whether the documents in
question carried out the parties' intent, in deeds and leases, the
granting clause governs; any later clause purporting to qualify,
abrogate or destroy rights created by the granting clause is
repugnant. Here, the granting clauses in each document were
correct, as were the execution and delivery of said documents.
Davy v. Lewis (1860) 18 U.C.Q.B. 21 and Rudnikoff v.
The Queen [ 1974] 2 F.C. 807, followed. Cohen v. M.N.R.
[1968] 1 Ex.C.R. 110, applied.
INCOME tax appeal.
COUNSEL:
W. D. Goodman, Q.C., and J. M. Clow for
plaintiff.
J. S. Gill for defendant.
SOLICITORS:
Goodman & Carr, Toronto, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
GIBSON J.: On this hearing, five separate
income tax appeals were heard together on
common evidence, namely: Plan A Leasing Lim
ited v. The Queen (T-2224-75); Plan B Leasing
Limited v. The Queen (T-2225-75); Plan C Leas
ing Limited v. The Queen (T-2226-75); Calfonta
Investments Limited v. The Queen (T-2227-75);
and Strathearn Holdings Limited v. The Queen
(T-2228-75).
(The appeals for the taxation years 1967 and
1968 for the plaintiff Plan A Leasing Limited and
the plaintiff Strathearn and the appeals for the
taxation years 1968 and 1969 for the plaintiff Plan
B Leasing Limited and for the plaintiff Plan C
Leasing Limited were not proceeded with because
such appeals were from nil assessments in those
respective years.)
The issue in this appeal is whether during the
relevant taxation years the plaintiff "owned" the
building called Commerce and Transportation
Building, 159 Bay Street, Toronto, Ontario or
whether it "leased" it.
It is not disputed that the plaintiff leased the
lands upon which the said building sits during the
relevant taxation years.
For taxation purposes, different results obtain if
the plaintiff "owned", the said building than if the
plaintiff "leased" the said building as follows:
A. If on the resolution of this issue, it should be
held that the plaintiff owned the said building,
then the plaintiff is entitled to capital cost allow
ance on a decreasing basis as a Class 3 asset as
described in Schedule B of the Regulations at
the rate of 5% per annum of the capital cost of
the building in 1962.
B. If on the other hand, on the resolution of this
issue, the plaintiff should be held to have a
leasehold interest only in this building, then the
plaintiff is entitled to claim a deduction from
income for the building as a Class 13 asset
under Schedule H at the rate of 2 1 / 2 % per annum
on a straight line basis.
The difference in the result for income tax
purposes for the plaintiff between the resolutions
referred to in A and B above, is that under A,
there is a certain tax deferral for 25 years.
Certain transactions took place in 1962 and it is
the legal effect of them from the point of view of
real estate law and its application to the Income
Tax Act and Regulations that is the subject matter
of the issue on this appeal.
These facts may be summarized as follows:
1. In February, 1962, Samuel Lunenfeld, the
owner of the lands (the "Lands") and the building
(the "Building") situated at the northwest corner
of Bay and Front Streets, in the City of Toronto,
accepted an offer to sell the Lands and Building to
Joseph Rosenblum.
2. Joseph Rosenblum subsequently accepted an
offer dated February 16, 1962, made by The
Great-West Life Assurance Company which offer
stated that it was for the purchase of the Lands
only, excluding the Building. The offer provided
that, contemporaneously with the closing of the
transaction, a lease of the Lands would be granted
by Great-West, as landlord, to Joseph Rosenblum,
or his nominee, as lessee, for a term of 99 years.
3. By a deed dated April 16, 1962, Samuel Lunen-
feld stated that he conveyed the Lands to
Great-West.
4. A deed dated April 16, 1962, executed by
Samuel Lunenfeld purported to convey the Build
ing to 159 Bay Street Limited.
5. A lease dated April 16, 1962, was entered into
between Great-West as landlord, and 159 Bay
Street Limited, as lessee.
6. Under an agreement dated May 4, 1962, the
plaintiff Plan A Leasing Limited purported to
purchase the building from 159 Bay Street Lim
ited and to acquire from it an assignment of the
lease that the latter held from Great-West. Pursu
ant to the said agreement, a deed dated May
1962, purported to convey the Building to Plan A
Leasing Limited and also an assignment of lease
dated May 17, 1962, purported to assign the inter
est of 159 Bay Street Limited in the lease to Plan
A Leasing Limited.
In respect to the issue on this appeal, the plain
tiff claims capital cost allowance (at the rate of 5%
per annum on a decreasing balance) as owner of
the building called Commerce and Transportation
Building, 159 Bay Street, Toronto, Ontario by
reason of the said above-quoted transactions that
took place in 1962.
Speaking generally, a person or a corporation
who owns or leases a building is entitled to deduct
from income such amounts for capital cost allow
ance or depreciation as is permitted by the Regula
tions made under the Income Tax Act.
For example, in the four situations listed
hereunder, the applicable Regulation is cited and
its application discussed:
1. An owner of a brick building is entitled to
capital cost allowance at the rate of 5% on a
decreasing balance by reason of Regulation
1100(1)(a)(iii) being a Class 3 property referred
to in Schedule B of the Regulations.
1100. (1) Under paragraph (a) of subsection (1) of section
11 [20] of the Act, there is hereby allowed to a taxpayer, in
computing his income from a business or property, as the case
may be, deductions for each taxation year equal to
(a) such amounts as he may claim in respect of property of
each of the following classes in Schedule B not exceeding in
respect of property
(iii) of class 3, 5%,
CLASS 3
Property not included in any other class that is
(a) a building or other structure, including component parts
such as electric wiring, plumbing, sprinkler systems, air-con
ditioning equipment, heating equipment, lighting fixtures,
elevators and escalators,
2. A person who has a leasehold interest in a
building is entitled to depreciate the cost of it over
the lifetime of the lease, plus one renewal period—
with a maximum period in total of 40 years by
reason of Regulation 1100(1) (b) being a Class 13
property referred to in Schedule H of the Regula
tions. Regulation 1100(1)(b):
Leasehold Interest
(b) such amount, not exceeding the amount for the year
calculated in accordance with Schedule H, as he may claim
in respect of the capital cost to him of property of class 13 in
Schedule B;
Schedule H.
Leasehold Interests.
1. For the purpose of paragraph (b) of subsection (1) of
section 1100, the amount that may be deducted in computing
the income of a taxpayer for a taxation year in respect of the
capital cost of property of class 13 in Schedule B is the lesser of
(a) the aggregate of each amount determined in accordance
with section 2 of this Schedule that is a prorated portion of
the part of the capital cost to him, incurred in a particular
taxation year, of a particular leasehold interest; or
(b) the undepreciated capital cost to the taxpayer as of the
end of the taxation year (before making any deduction under
section 1100) of property of the class.
2. Subject to section 3 of this Schedule, the prorated portion
for the year of the part of the capital cost, incurred in a
particular taxation year, of a particular leasehold interest is the
lesser of
(a) one-fifth of that part of the capital cost; or
(b) the amount determined by dividing that part of the
capital cost by the number of 12-month periods (not exceed
ing 40 such periods) falling within the period commencing
with the beginning of the particular taxation year in which
the capital cost was incurred and ending with the day the
lease is to terminate.
3. For the purpose of determining, under section 2 of this
Schedule, the prorated portion for the year of the part of the
capital cost, incurred in a particular taxation year, of a particu
lar leasehold interest, the following rules apply:
(a) where an item of the capital cost of a leasehold interest
was incurred before the taxation year in which the interest
was acquired, it shall be deemed to have been incurred in the
taxation year in which the interest was acquired;
(b) where, under a lease, a tenant has a right to renew the
lease for an additional term, or for more than one additional
term, after the term that includes the end of the particular
taxation year in which the capital cost was incurred, the lease
shall be deemed to terminate on the day on which the term
next succeeding the term in which the capital cost was
incurred is to terminate;
(c) the prorated portion for the year of the part of the
capital cost, incurred in a particular taxation year, of a
particular- leasehold interest shall not exceed the amount, if
any, remaining after deducting from that part of the capital
cost the aggregate of the amounts claimed and deductible in
previous years in respect thereof;
(d) where, at the end of a taxation year, the aggregate of
(i) the amounts claimed and deductible in previous taxa
tion years in respect of a particular leasehold interest, and
(ii) the proceeds of disposition, if any, of part or all of that
interest
equals or exceeds the capital cost as of that time of the
interest, the prorated portion of any part of that capital cost
shall, for all subsequent years, be deemed to be nil; and
(e) where, at the end of a taxation year, the undepreciated
capital cost to the taxpayer of property of class 13 is nil, the
prorated portion of any part of the capital cost as of that
time shall, for all subsequent years, be deemed to be nil.
(Schedule H added by P.C. 1964-1857, December 4, 1964,
Canada Gazette Part II, December 23, 1964).
3. A tenant who erects a building on leased land
and has a leasehold interest in the building, is
entitled to treat the building as if he owned it and
deduct capital cost allowance as in situation 1
above by reason of Regulation 1102(5). Regula
tion 1102(5):
Buildings on Leased Property
(5) Where the taxpayer has a leasehold interest in a prop
erty, a reference in Schedule B to a property that is a building
or other structure shall be deemed to include a reference to that
part of the leasehold interest acquired by reason of the fact that
the taxpayer has
(a) erected a building or structure on leased land,
(b) made an alteration to a leased building or structure, or
(c) made alterations to a leased property which substantially
change the nature of the property,
unless the property is included in class 23 in Schedule B.
4. A tenant who erects a building on leasehold
land has a leasehold interest in the building if he
subsequently assigns his leasehold rights to an
assignee, then the assignee is entitled to a deduc
tion from income for depreciation only at the rate
of 2 1 / 2 % on a straight line basis, that is, on the
same basis as in situation 2 above.
(This Regulation was changed in January, 1976 so
that the situation now is the same as in situation 3
above.)
The documentation with respect to the transac
tions in 1962 purport to cause the following legal
results to obtain:
A. Re lands—Great-West Life Assurance Com
pany owns the lands upon which the subject
building sits.
The plaintiff leases (by way of assignment of
lease) the said lands from Great-West Life
Assurance Company.
B. Re building—the plaintiff owns the building,
159 Bay Street, Toronto, called Commerce and
Transportation Building.
The deeds and leases which purport to accom
plish the above results are as follows:
A. Re land—Deed of land (Exhibit A-3) dated
April 16, 1962 between Samuel Lunenfeld of
Montreux, Switzerland as grantor and The Great-
West Life Assurance Company as grantee. The
granting clause reads: "he the said grantor DOTH
GRANT unto the said grantee in fee simple".
B. Re building—(1) Deed of building (Exhibit
A-4) dated April 16, 1962 between Samuel Lunen-
feld of Montreux, Switzerland as grantor and 159
Bay Street Limited as grantee. The granting
clause reads: "he, the said Grantor, DOTH GRANT
unto the said Grantee ALL those the buildings,
improvements, appurtenances thereto and fixtures
therein or thereon, situate upon (but not includ
ing) the lands more particularly described in
Schedule 'A' hereto (hereinafter referred to as 'the
said buildings')."
(2) Deed of building (Exhibit A-7) dated May
, 1962 between 159 Bay Street Limited the
grantor and Plan "A" Leasing Limited the gran-
tee. The granting clause reads: "the said Grantor
DOTH GRANT unto the said Grantee ALL those the
buildings, improvements, appurtenances thereto
and fixtures therein or thereon, situate upon (but
not including) the lands more particularly
described in Schedule 'A' hereto (hereinafter
referred to as 'the said buildings')."
C. Re lease—Lease of lands only (Exhibit A-5)
dated April 16, 1962 between The Great-West
Life Assurance Company as lessor and 159 Bay
Street Limited as lessee. The granting clause
reads: "WITNESSETH, that in consideration of the
rents, covenants and agreements hereinafter
reserved and contained on the part of the Tenant
to be paid, observed and performed the Landlord
has demised and leased and by these presents does
hereby demise and lease unto the Tenant All and
Singular the lands and premises situate, lying and
being in the City of Toronto, in the County of
York, more particularly described in Schedule 'A'
hereto annexed, which lands exclusive of any
buildings or other improvements are hereinafter
referred to as the `demised premises'."
D. Assignment of lease of lands only—Assign-
ment (Exhibit A-8) dated May 17, 1962, between
159 Bay Street Limited as assignor and Plan A
Leasing Limited as assignee. The granting clause
in said assignment reads: "NOW THIS INDENTURE
WITNESSETH that in consideration of other valu
able consideration and the sum of TWO ($2.00)—
Dollars now paid by the Assignee to the Assignor
(the receipt whereof is hereby acknowledged) the
Assignor doth hereby grant and assign unto the
Assignee all that certain parcel of land situate in
the City of Toronto, in the County of York, as
more particularly described in Schedule 'A' hereto
annexed; together with the residue unexpired of
the term of years in the said lease mentioned, and
the said lease and all benefit and advantage to be
derived therefrom."
Recapitulating and referring to the exhibit evi
dence, the relevant contracts of deed, lease and
assignment of lease are:
The plaintiff's contracts of deed and lease:
A. Exhibit A-1, A-3, A-4 and A-5 indicate that
Lunenfeld split the ownership of the land from
that of the building by:
(i) conveying the ownership of the land to
Great-West Life Assurance Company (see
Exhibit A-3); and
(ii) by conveying the ownership of the building
to 159 Bay Street Limited (Exhibit A-4).
B. 159 Bay Street Limited at the same time as it
became owner of the building (Exhibit A-4) leased
the lands from Great-West Life Assurance Com
pany (Exhibit A-5).
C. Then the plaintiff, Plan A Leasing Limited
acquired all the rights of 159 Bay Street Limited
by:
(i) purchasing the building (Exhibit A-7), and
(ii) by accepting an assignment of the lease of
the lands (Exhibit A-8).
It is by virtue of what happened at A above that
the plaintiff claims to be owner of the building and
entitled to claim for income tax purposes capital
cost allowance pursuant to the Regulations made
under the Income Tax Act of the building as
owner.
The determination of the issue on this appeal
involves real estate law questions by virtue of what
took place in 1962 as above recited.
Counsel for the defendant contends that in law
in the Province of Ontario what was alleged to
have been successfully done here is impossible,
namely, to sign, seal and deliver separate convey
ances of the lands and the building which sits on
those lands after (as was the case here) the build
ing has been built on such lands. Counsel says that
what the grantee in the conveyance of the building
received in this case was only a leasehold interest
in the building and not the freehold title of owner
ship. He says that if a building is conveyed sepa
rate and apart from the land (as was done here),
that such conveyance gives to the grantee title to
the building as a fixture together with the right to
remove the building from the site or dismantle it
within a reasonable time; and if on the contrary,
there is included, even in a collateral and contem
poraneous conveyance as e.g. a lease, a right to
keep the building on the lands on which it sits,
such is dependent solely on such lease of the lands.
He then concludes as a consequence, what the
plaintiff received by such a conveyance of the
building, was only a leasehold interest in the
building.
Alternatively, counsel for the defendant submit
ted that if the conveyance of the building, (as in
this case, separate from the lands) gave more
rights to the grantee than above mentioned, then
the rights received by the grantee were subject to
the terms of the subject lease (entered into collat-
erally with the deed of the building) among whose
provisions is a clause requiring the grantee of the
building to convey without compensation the
building to the lessor of the lands upon which it
sits on the termination of the land lease. Counsel
submits that, as a result, the rights obtained by the
grantee by these transactions amount in law to no
more than a leasehold interest in the building.
Counsel for the defendant cites as authorities for
these submissions the following:
Stack v. Eaton'; Holland v. Hodgson 2 ; Hobson
v. Gorringe 3 ; Haggert v. Town of Brampton 4 ;
Reynolds v. Ashby & Son 5 ; Crossley Brothers
Limited v. Lee 6 ; Seeley v. Caldwell'; Devine v.
Callery 8 ; Scarth v. Ontario Power and Flat
Co. 9 ; Davy v. Lewis'°; Agricultural Develop
ment Board v. Ricard"; Liscombe Falls Gold
Mining Co. v. Bishop 12 ; In re Morrison, Jones
& Taylor Limited 13 ; Struthers v. Chamandy' 4 ;
City of Vancouver v. Attorney General of
Canada 15 ; Re Hornell 16 ; Cohen v. M.N.R.' 7 ;
Reitman v. M.N.R. 18 ; Rudnikoff v. The
Queen 19 ; La Banque D'Hochelaga v. The
Waterous Engine Works Company 20 ; The Law
of Real Property by Megarry and Wade, 3rd
' (1902) 4 O.L.R. 335.
2 (1872) L.R. 7 C.P. 328.
3 [1897] 1 Ch. 182.
4 (1897) 28 S.C.R. 174.
5 [1904] A.C. 466.
6 [1908] 1 K.B. 86.
7 (1908) 18 O.L.R. 472.
8 (1918) 38 D.L.R. 542.
9 (1894) 24 O.R. 446.
10 (1860) 18 U.C.Q.B. 21.
11 (1927) 32 O.W.N. 140.
12 (1905) 35 S.C.R. 539.
13 [1914] 1 Ch. 50.
14 (1918) 42 O.L.R. 508.
15 [1944] S.C.R. 23.
16 [1945] 1 D.L.R. 440.
17 [1968] 1 Ex.C.R. 110.
18 [1968] 1 Ex.C.R. 120.
19 [1974] 2 F.C. 807.
20 (1897) 27 S.C.R. 406.
edition, pages 68-83, 141, 556-57, and 715-23;
The Law of Personal Property, 2nd edition by
Brown pages 725-28.
Counsel for the plaintiff submitted that the
transactions above referred to resulted (1) in the
plaintiff Plan A Leasing Limited being the owner
of the freehold in the subject building on the said
subject lease of the lands upon which the building
sits, but not the lands; (2) in Great-West Life
Assurance Company being the owner of the free
hold in the said lands, but not the building erected
thereon; and (3) in the plaintiff Plan A Leasing
Limited being the owner of the leasehold interest
in the said lands by way of assignment of lease.
So much for the submission of counsel.
From a careful reading of Exhibits A-1 to A-14,
it is obvious that the relevant parties at all ma
terial times by contracts of deed, lease and assign
ment of lease very carefully spelled out and execu
ted their intention in entering into these said
transactions.
In law, the title of the lands and the title to the
building on such lands can be conveyed separately
when parties have made a special contract to do so.
When parties do so by proper conveyances, they
may, as was said in Davy v. Lewis (supra) at page
30, define and make a law for themselves in
respect to such lands and building. In other words,
the usual rule of law that the building is part of
the freehold can be abrogated by a contract of
parties. They can completely sever the right title
and interest in the freehold in the building from
the right title and interest in the freehold of the
lands on which the building sits, even though the
building continues to be annexed to such lands.
This exception to the rule of common law has
obtained since Lord Coke's time. (See Challis, The
Law of Real Property, 3rd edition, page 54). And
as is said in Megarry and Wade, The Law of Real
Property, 3rd edition, at page 70:
An owner can, if he wishes, divide his land horizontally or in
any other way. He can dispose of minerals under the surface, or
the top floor of a building, so as to make them separate
properties.
In this Court in Rudnikoff v. The Queen
(supra) at page 809, Jackett C.J. said:
However, in my view, while the general rule, both in the
common law provinces and in the Province of Quebec is that a
substantial building becomes a part of the land and belongs to
the owner of the land, this situation may be changed, by
contract or otherwise, so that ownership of the building is
separate from ownership of the land and the building would not
be a part of the subject matter of the lease. Such a result
would, however, follow only as a result of clear language and,
in my view, in this case, the terms of the emphyteutic lease are
not such as to produce such a result.
Also in this Court in Cohen v. M.N.R. 21 Noël
A.C.J. said it was possible to modify the terms of
an emphyteutic lease under the Quebec Civil
Code. He said at pages 116 and 119 as follows:
An examination of the deed of lease and agreement between
the Ecclesiastics of the Seminary of St-Sulpice of Montreal and
The Transportation Building Company Limited as well as of
the deed of sale to the appellants of the rights in the original
lease and agreement and in the building constructed on the
property reveals that some of the clauses of the deed of lease
and agreement are standard emphyteutic clauses whereas
others are not and are unusual.
I shall now consider only those clauses pertinent to the
present case and which may be helpful in determining the
nature of the rights the appellants purchased from The Trans
portation Building Company Limited.
It therefore appears to me that whatever are the rights of an
ordinary emphyteutic lessee in Quebec or whatever difficulties
there may be in the common law provinces because ownership
of the land carries with it whatever is built thereon, I cannot, on
the documents as they stand herein, reach any other conclusion
but that the appellants were the proprietors of the building
erected on the land owned by the Seminary.
In addition, in this case, the fact that the first
subject deed of the freehold of the building
(Exhibit A-4) did not also in it include a convey
ance of easements for such things as support,
access etc., does not change the legal effect of the
said deed. Another transaction was entered into in
this case in 1962 to obtain such easements,
namely, the lease with Great-West Life Assurance
Company (Exhibit A-5). Such accomplished the
same result as would have been accomplished by
including a conveyance of such easements in the
same deed as the conveyance of the freehold of the
building. (Exhibit A-4).
21 [1968] 1 Ex.C.R. 110.
The only other question that arises is whether or
not the subject documentation in law carried out
the intention of the parties in this case.
In deeds and leases the granting clause governs.
Any later clause which purports to qualify, abro
gate or in any way destroy the rights created by
the granting clause is to be rejected in law as
repugnant and the granting clause prevails. (See
Ouston v. Williams 22 ; Forbes v. Git 23 ; Armour on
Real Property, 2nd edition 1916, page 350; Anger
and Honsberger, Canadian Law of Real Property
1959 pages 16-17.)
A review of the deeds, leases and conveyances
above referred to indicates that the granting
clauses in all the relevant deeds, leases and assign
ment were drafted correctly in law and these docu
ments were correctly executed and delivered.
As a consequence, in law the plaintiff Plan A
Leasing Limited is the owner of the freehold of the
building, 159 Bay Street Limited, Toronto, known
as Commercial and Transportation Building; and
was during all the relevant taxation years. It is
therefore entitled, during the relevant taxation
years, to a deduction from income for capital cost
allowance in respect to its cost of such building at
the rate of 5% per annum on a decreasing basis.
The appeal is therefore allowed with costs, and
the matter is directed to be referred back for
re-assessment not inconsistent with these reasons.
22 (1857) 16 U.C.Q.B. 405 at 406.
23 (1922) 61 D.L.R. 353.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.