Stephens v. The Queen, 84 DTC 6114, [1984] CTC 111 (FCTD)

Reed, J:—This was an application under Rule 474 for the determination of a question of law with regard to the validity of assessments and reassessments made against the plaintiff taxpayer for the taxation years 1973 to 1977.

The validity of these assessments was attacked on two grounds: (1) the notices of reassessment were issued on forms bearing in the upper left hand corner the name “Revenue Canada Taxation” rather than “Department of National Revenue” which is the proper statutory name of that department and (2) four of the five notices of reassessment, those for taxation years 1974 to 1977, were issued with the name “J S Hodgson, Deputy Minister of National Revenue for Taxation” printed thereon while at the date of the mailing of those notices Bruce A MacDonald and not J S Hodgson was the incumbent Deputy Minister. The reassessment notice for the year 1973 was properly imprinted with the name of the incumbent, Bruce A MacDonald. The date of mailing for all five notices was March 16, 1979.

It was argued by counsel for the plaintiff that the notices of reassessment were invalid because the entity whose name appeared in the top left hand corner of the form, “Revenue Canada — Taxation”, was an entity unknown in law. In support of this contention the decisions of Mr Justice Cattanach in re Solway, [1979] CTC 154; 79 DTC 5116 and in The Queen v Wei Holdings Ltd et al, [1979] CTC 116; 79 DTC 5081 were cited. In both these decisions the learned judge held that affidavits were invalid in which deponents described themselves as collections’ officers for “Revenue Canada — Taxation” and leave to amend the affidavits was granted. The decision of Cory, J in In re Corsini, 79 DTC 5356 was also cited. In that case the validity of a search and seizure application and authorization was attacked because the description “Revenue Canada, Taxation” and not Department of National Revenue was printed on the top of the authorization form. While the learned judge expressed the view that the use of this nomenclature was unfortunate, he nevertheless found the document valid because the officer applying for the authorization had been properly described in the body of the document as an officer of the Department of National Revenue. The decision of this Court in James Richardson and Sons Limited v MNR, [1981] CTC 229; 81 DTC 5232 to a similar effect was also cited.

In response to these arguments counsel for the Crown contended that the defects in question were at most irregularities and could not be said to invalidate the reassessments. He argued that as such they were cured by subsection 152(8) of the Income Tax Act:

(8) An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission therein or in any proceeding under this Act relating thereto.

In addition he argued, relying on the Corsini case, (supra), and the Richardson case, (supra), that the printed name of the Department of National Revenue appeared on each form albeit as part of the description of the title of the Deputy Ministers, as noted above, thereby curing whatever defect the appearance of the appellation Revenue Canada, Taxation in the corner of the document might create.

He also argued that a letter dated April 25, 1979 sent to the plaintiff and signed by “D L H Davidson, Assistant Deputy Minister of National Revenue for Taxation” cured any defect which might exist in the notices of reassessment. This letter referred to the assessments for the 1973-1977 taxation years, notified the taxpayer that the Minister was proceeding under subsection 158(2) of the Income Tax Act, and directed that the assessments be paid forthwith.

Both counsel referred to the amendment to subsection 244(13.1) of the Income Tax Act added by Stat Can 1980-81-82-83, c 140, s 127 to support their arguments. That amendment came into effect November 12, 1981 and provides as follows:

(13.1) The words “Revenue Canada, Taxation” and the words “Revenu Canada (Impôt)” in any document issued or executed under or in the course of the administration or enforcement of this Act over the name in writing of the Minister, the Deputy Minister of National Revenue for Taxation or any officer authorized by regulation to exercise powers or perform duties of the Minister under this Act are deemed to be a reference to the “Department of National Revenue” and “ministère du Revenu national”.

Counsel for the Crown argued that this amendment was procedural in nature and therefore had retrospective operation. Counsel for the plaintiff argued that it was a clear recognition by Parliament that prior to November 12, 1981 the use of the nomenclature “Revenue Canada, Taxation” constituted reference to a non-existent entity and was an invalid usage.

I think nothing turns on this amendment. It is clearly not procedural and no cases were cited to me in which an amendment of this nature had been classified as procedural. At the same time it cannot be said that in passing it Parliament intended to recognize that the use of the nomenclature Revenue Canada, Taxation prior to November 12, 1981, was invalid. Parliament in enacting amendments to legislation does not always mean to change existing law but rather sometimes merely to reinforce or clarify the pre-existing situation. There is nothing in the context of the above-mentioned amendment which should be taken as indicating that Parliament in enacting it was acknowledging the invalidity of the prior usage of the terminology Revenue Canada, Taxation.

Counsel for the Crown argued that even if the notices of assessment in this case were invalid that was of no consequence since the Minister had proceeded against the taxpayer under subsection 158(2) of the Income Tax Act and not under subsection 158(1).

158. (1) The taxpayer shall, within 30 days from the day of mailing of the notice of assessment, pay to the Receiver General of Canada any part of the assessed tax, interest and penalties then remaining unpaid, whether or not an objection to or appeal from the assessment is outstanding.

(2) Where, in the opinion of the Minister, a taxpayer is attempting to avoid payment of taxes, the Minister may direct that all taxes, penalties and interest be paid forthwith upon assessment.

In the instant case notices of assessment were sent to the taxpayer on March 16, 1979 but, as noted above, on April 25, 1979 the Minister moved under subsection 158(2) directing that the tax assessed for the taxation years 1973-1977 was payable forthwith, filing a certificate in this Court further to which writs of fieri facias were issued against the plaintiffs property.

Accordingly counsel for the Crown contends that even if the notices of reassessment of March 16, 1979 were invalid that would not upset the validity of the assessment itself, nor of the certificate filed in this Court and the writ of fieri facias. This it was argued follows from the fact that the date at which the taxpayer was obligated to pay the tax liability owed by him arose under subsection 158(2) and not subsection 158(1) of the Act. Counsel for the plaintiff cited, as rebuttal to this contention, the decision of Chief Justice Thurlow in Lawrence B Scott v MNR, [1960] CTC 402; 60 DTC 1273. In that case the Lord Chief Justice held that at 1280:

. . . the giving of notice of assessment is part of the fixation operation referred to as an assessment in the statute and that an assessment is not made until the Minister has completed his statutory duties as an assessor by giving the prescribed notice . . .

In the view I take of this case I do not find it necessary to deal with this issue although I would note that Chief Justice Thurlow’s comments were specifically related to the fixing of a time after which the limitation period set out in paragraph 152(4)(b) of the Act would expire. To take them as automatically applicable to other sections of the Act may be to do more than the learned Chief Justice intended. It is well to keep in mind the comments of the Supreme Court of Canada in Okalta Oils Limited v MNR, [1955] CTC 271; 55 DTC 1176 at 1177 to the effect that the word “assessment” in the Income Tax Act is used in more than one sense.

With respect to the validity of the notices of reassessment for the taxation years 1973-1977, I do not think that the use of the nomenclature Revenue Canada, Taxation in the top left hand corner renders them invalid. This appellation, while not the statutory title of the department is a publicly well known appellation. Income tax returns filed by taxpayers carry that nomenclature, as do many other documents issued by the Department. I cannot believe that the taxpayer was in any way misled into thinking that these forms did not emanate from the Department of National Revenue. I cannot believe that the taxpayer was either confused or prejudiced by the usage of this appellation. And, it seems to me that the principle which emerges out of the Corsini and Richardson cases cited above is that documents such as those in dispute will not be considered invalid when there is no prejudice or confusion created thereby.

Even if I am wrong in this I would hold that the reference in the body of the document to the Department of National Revenue contained in the description of the title of the Deputy Minister and the letter of April 25th, letter signed by D H L Davidson cured any defect created by the use of the terminology Revenue Canada, Taxation in the notices of reassessment.

It remains to deal with the alleged defect created by the fact that four of the five notices contained the printed name of an individual who was not the incumbent Deputy Minister at the date of mailing of the notices.

In the first place it should be noted that the name of the Deputy Minister was not imprinted with a facsimile signature which could be changed quickly upon a change of Deputy Ministers. The name was part of a printed form which must of necessity be prepared well in advance of its use. Secondly, there is nothing in the Act which requires the Minister or the Deputy Minister to sign the notices of assessment. I do not think anything turns on the fact that the notices of reassessment carried the printed name of a person who was no longer Deputy Minister at the time of mailing. The person whose name did appear, J S Hodgson, may have been the responsible Deputy Minister during much of the time that the plaintiffs tax liabilities were being reassessed even though he was not Deputy Minister at the date of mailing.

At most the usage of the appellation Revenue Canada, Taxation and the usage of printed forms carrying the name of the previous rather than the incumbent Deputy Minister would be irregularities cured by subsection 152(8) of the Act and not defects such as to render the documents void.