Facts
In enforcement proceedings for the realization of a real estate lien initiated by the Cantonal Bank of Zurich, two properties belonging to the company B. AG in liquidation were auctioned. One of the properties was awarded to the Cantonal Bank of Zurich, while the other was acquired by Mr. Sch.
In the course of establishing the distribution plan by the debt collection office, the auction proceeds were reduced by CHF 102,505, as the purchaser Mr. Sch. had not paid the real estate capital gains tax for his property, unlike the Cantonal Bank of Zurich.
The Cantonal Bank of Zurich contested the distribution plan, requesting that the real estate capital gains tax not be deducted from the auction proceeds, but also be paid to the mortgage creditors. This objection was rejected by the District Court of Winterthur.
The Court of Appeal of the Canton of Zurich upheld the appeal of the Cantonal Bank of Zurich and ordered the debt collection office of Winterthur not to deduct the real estate capital gains tax from the auction proceeds to be distributed among the mortgage creditors.
The City of Winterthur then appealed to the Federal Supreme Court.
Considerations
The Federal Supreme Court upheld the appeal of the City of Winterthur. It considered that the real estate capital gains tax must be regarded as a realization cost within the meaning of Art. 157 para. 1 DEBA and must therefore be deducted from the gross proceeds of the sale before the net proceeds are distributed to the mortgage creditors, in accordance with Art. 157 para. 2 DEBA.
According to the case law of the Federal Supreme Court, public debts…