Cullen,
J.:
—
Prologue
Having
been
the
presiding
judge
in
Om
P.
Chhabra
v.
The
Queen,
[1988]
1
C.T.C.
84;
88
D.T.C.
6015,
I
was
somewhat
surprised
that
the
defendant
did
not
object
to
my
hearing
this
particular
case,
given
my
criticisms
of
the
conduct
of
officials
from
Revenue
Canada.
Both
before
and
at
the
beginning
of
this
trial
I
confirmed
that
the
defendant
had
no
objections
to
my
presiding
once
again
even
though
I
had
volunteered
to
step
aside
in
favour
of
one
of
my
colleagues.
This
is
an
action
for
damages
arising
from
actions
taken
by
servants
of
the
Crown
(employees
of
the
Department
of
National
Revenue)
to
collect
amounts
allegedly
owing
in
respect
of
taxes.
As
With
the
earlier
case,
the
plaintiff
was
not
represented
by
counsel,
making
the
task
of
counsel
for
the
defendant
and
the
Court
more
difficult.
Counsel
for
the
defendant,
Mr.
Michael
W.
Duffy,
is
commended
for
his
understanding,
his
assistance
to
the
Court
and
to
the
plaintiff,
and
his
gracious
handling
of
the
matter
in
the
circumstances.
Background
The
plaintiff,
a
medical
practitioner,
became
involved
in
a
joint
enterprise
with
his
nephew
Inder
Chabra,
a
resident
of
California
and
a
United
States
citizen.
In
1974
the
plaintiff
and
Inder
Chhabra
purchased
a
shopping
centre
in
Orinda,
California
(the
property).
The
plaintiff
became
concerned
about
his
nephew's
activities
in
regard
to
this
property
and
feared
that
he
was
being
cheated.
In
order
to
limit
any
further
loss
from
what
he
considered
to
be
misappropriation
and
embezzlement
by
his
nephew,
the
plaintiff
decided
to
sell
the
California
property.
The
property
was
sold
in
December
1978
on
an
instalment
sale.
According
to
the
Minister
of
National
Revenue
(the
Minister)
the
proceeds
of
disposition
in
respect
of
the
property
amounted
to
$691,273.
The
plaintiff
reported
the
disposition
of
his
interest
in
the
California
property
and
since
the
purchase
price
was
to
be
paid
on
monthly
instalments,
the
plaintiff
established
a
reserve
pursuant
to
subparagraph
40(1)(a)(iii)
of
the
Income
Tax
Act
(the
Act).
The
Minister
indicated
that
the
plaintiff
did
not
claim
a
reserve
in
his
1979
taxation
year
and
did
not
report
the
proceeds
of
disposition
from
the
California
property.
By
notice
of
assessment
issued
September
4,
1980
the
Department
of
National
Revenue
(the
Department)
included
the
total
reserve
established
in
the
1978
taxation
year
in
the
calculation
of
the
plaintiffs
table
income
for
the
1979
taxation
year.
The
assessment
was
in
the
amount
of
$48,372.59.
The
plaintiff,
in
a
letter
dated
September
21,
1989,
requested
that
collection
of
taxes
be
deferred
until
such
time
as
the
funds
were
actually
realized
and
to
prorate
the
computations
with
the
rate
of
realization
of
the
proceeds.
The
above-noted
assessment
was
considered
to
be
a
debt
due
to
the
Crown
pursuant
to
section
222
of
the
Income
Tax
Act
and
by
certificate
made
pursuant
to
subsection
223(2)
of
the
Act,
dated
March
19,
1981
and
filed
in
the
Federal
Court
of
Canada,
the
Minister
certified
a
debt
due
to
Her
Majesty
for
the
amount
of
$42,937.65.
A
certificate
was
also
filed
in
respect
of
provincial
income
tax
totalling
$6,749.10
in
the
Supreme
Court
of
Nova
Scotia.
By
separate
notices
of
assessment
dated
October
23,
1981,
the
Minister:
(1)
included
in
the
1976
and
1977
taxation
years,
$9,979
and
$55,937
respectively
as
net
rental
income
from
the
California
property;
(2)
in
the
1978
taxation
year,
disallowed
the
capital
cost
allowance
of
$18,278
resulting
in
an
increased
rental
income
of
$10,181.25;
included
$47,275.59
as
income,
reduced
the
taxable
capital
gain
to
$14,201.23
and
allowed
a
reserve
of
$143,432.36
in
determining
the
taxable
gain;
(3)
in
the
1979
taxation
year,
included
$45,669.29
as
mortgage
interest
income,
included
a
taxable
capital
gain
of
$595.58
(1978
reserve
of
$143,432.26
less
1979
reserve
of
$142,241.20
resulting
in
a
capital
gain
of
$1,191.16)
and
disallowed
travelling
expenses
of
$4,995.
The
plaintiff
filed
notices
of
objection
dated
November
18,
1981.
The
notices
of
reassessment
were
confirmed.
By
certificate
dated
March
15,
1982,
filed
pursuant
to
subsection
223(2)
of
the
Act,
in
the
Federal
Court
of
Canada,
the
Minister
certified
a
debt
due
to
the
Crown
in
respect
of
the
1976,
1977,
1978
and
1980
taxation
years
for
an
amount
of
$75,102.95
on
account
of
income
tax,
Canada
Pension
Plan
premiums,
interest
and
penalty.
The
Department
also
took
proceedings
to
garnishee
75
per
cent
of
the
plaintiff's
gross
monthly
income
at
source,
pursuant
to
subsection
224(1)
of
the
Act.
The
plaintiff,
having
neither
the
income
nor
the
assets
to
satisfy
the
debt,
offered
to
pledge
the
documents
of
his
California
transaction
as
security.
This
offer
was
not
accepted
by
the
Department
claiming
no
ability
to
enforce
payment
in
the
event
that
payments
stopped.
On
February
23,
1982
the
plaintiff
served
notice
on
the
Department's
Collection
Division
of
his
inability
to
continue
in
business
as
a
result
of
the
garnishment.
On
April
30,
1982
the
plaintiff
closed
his
medical
practice
in
Halifax
and
eventually
moved
to
Ontario.
The
plaintiff
successfully
appealed
his
reassessments
for
the
tax
years
1976,
1977,
1978
and
1979
to
the
Federal
Court
of
Canada.
Plaintiff's
Position
The
plaintiff
maintains
that
at
all
times
he
attempted
to
draw
the
Department's
attention
to
the
hardship
that
would
result
from
its
actions.
The
plaintiff
submits
that
as
a
result
of
the
garnishment
and
the
certification,
he
was
forced
to
shut
down
his
practice,
sell
his
home
and
was
ruined
financially.
Further,
according
to
the
plaintiff,
the
Atlantic
Television
System
in
Halifax
(where
the
plaintiff
previously
resided)
broadcast
the
plaintiffs
problems
with
Revenue
Canada
on
a
news
bulletin
in
February
of
1982.
The
plaintiff
contends
that
this
public
disclosure
tarnished
his
credibility
and
had
a
negative
impact
on
his
professional
reputation
and
standing
in
the
community.
Therefore
the
plaintiff
seeks
the
following:
(1)
recovery
of
all
sums
seized
and
attached
by
the
Department;
(2)
compensation
for
the
hardship
and
deprivation
the
plaintiff
suffered
as
a
result
of
the
“dispossession
of
his
property";
(3)
damages
for:
a)
loss
and
ruin
of
his
career,
b)
loss
of
livelihood,
c)
loss
of
reputation,
and
d)
mental
and
physical
suffering
caused
to
the
plaintiff
and
his
family.
Defendant's
Position
The
defendant
maintains
that
at
all
material
times
the
plaintiff
was
indebted
to
Her
Majesty
and
that
the
plaintiffs
indebtedness
had
not
been
satisfied.
The
defendant
submits
that
the
garnishment
proceedings
and
the
certification
are
activities
authorized
by
the
provisions
of
subsections
224(1)
and
223(2)
of
the
Act
and
therefore
all
actions
carried
out
pursuant
to
these
provisions
were
lawful
actions.
The
defendant
further
submits
that
the
servants
and
the
officers
of
the
Department
carried
out
their
duties
under
the
Act
without
malice
and
for
no
improper
purpose
and
that
any
damage
alleged
by
the
plaintiff
was
not
occasioned
or
did
not
result
from
the
actions
of
the
defendant
officers
and
servants
who
performed
their
duties
under
the
Act.
Discussion
The
procedure
under
section
223
of
the
Act
involves
the
certification
by
the
Minister
of
an
amount
due
in
respect
of
taxes,
to
the
Receiver
General
of
Canada.
The
certificate
is
registered
with
the
Federal
Court
of
Canada.
Once
registered
the
certificate
has
the
same
force
and
effect
and
will
support
the
same
proceedings
in
execution
thereupon
as
if
it
were
a
judgment
of
the
Court
for
the
amount
certified
plus
interest.
Section
224
of
the
Act
allows
the
Minister
to
effect
collection
of
taxes
by
way
of
garnishment
independent
of
provincial
law.
Garnishment
is
implemented
by
notice
given
to
a
debtor
of
the
taxpayer
that
payment
is
to
be
made
to
the
Receiver
General
on
account
of
the
taxpayer's
liability.
Subsection
224(1)
of
the
Act
provides
that:
224,
(1)
Where
the
Minister
has
knowledge
or
suspects
that
a
person
is
or
is
about
to
become
indebted
or
liable
to
make
any
payment
to
another
person
who
is
liable
to
make
a
payment
under
this
Act
(in
this
section
referred
to
as
the
"tax
debtor")
he
may,
by
registered
letter
or
by
a
letter
served
personally,
require
that
person
to
pay
the
moneys
otherwise
payable
to
the
tax
debtor
in
whole
or
in
part
to
the
Receiver
General
on
account
of
the
tax
debtor's
liability
under
this
Act.
The
powers
granted
to
the
Minister
under
section
224
of
the
Act
may
be
exercised
by
the
Deputy
Minister
of
National
Revenue
for
Taxation
(subsection
220(1)),
the
Assistant
Deputy
Minister
of
National
Revenue
for
Taxation
(subsection
900(1)
of
the
Regulations)
and
the
Director
in
a
Taxation
Centre
(subsection
900(10)
of
the
Regulations).
Liability
of
the
Crown
Although
not
specifically
pleaded,
the
plaintiff's
claim
for
damage
is
really
based
on
paragraph
3(a)
of
the
Crown
Liability
Act,
R.S.C.
1985,
c.
C-50,
vicarious
liability
of
the
Crown:
3.
The
Crown
is
liable
in
tort
for
the
damages
for
which,
if
it
were
a
private
person
of
full
age
and
capacity,
it
would
be
liable
(a)
in
respect
of
a
tort
committed
by
a
servant
of
the
Crown;
..
.
.
Therefore,
the
plaintiff
must
prove
that
he
suffered
damage
as
a
consequence
of
a
tort
committed
by
a
servant
of
the
Crown.
In
his
statement
of
claim
the
plaintiff
did
not
include
or
name
specific
employees
of
the
Department.
He
did,
however,
name
them
at
the
trial.
There
is
no
dispute
that
employees
of
Revenue
Canada
are
considered
servants
of
the
Crown
for
the
purposes
of
the
Crown
Liability
Act.
Further,
there
need
only
be
a
cause
of
action
in
tort
against
one
of
the
servants
of
the
Crown
(in
this
case
one
of
the
named
employees
of
Revenue
Canada)
in
order
that
the
Crown
be
vicariously
liable:
Stephens
Estate
v.
The
Queen
et
al,
[1982]
C.T.C.
138;
82
D.T.C.
6132.
This
liability
is
subject
to
the
following
condition
contained
in
section
10
of
the
Crown
Liability
Act:
10.
No
proceedings
lie
against
the
Crown
by
virtue
of
paragraph
3(a)
in
respect
of
any
act
or
omission
of
a
servant
of
the
Crown
unless
the
act
or
omission
would
apart
from
the
provisions
of
this
Act
have
given
rise
to
a
cause
of
action
in
tort
against
that
servant
or
the
servant's
personal
representative.
Further,
section
8
provides:
8.
Nothing
in
sections
3
to
7
makes
the
Crown
liable
in
respect
of
anything
done
or
omitted
in
the
exercise
of
any
power
or
authority
that,
if
those
sections
had
not
been
passed,
would
have
been
exercisable
by
virtue
of
the
prerogative
of
the
Crown,
or
any
power
or
authority
conferred
on
the
Crown
by
any
statute,
and,
in
particular,
but
without
restricting
the
generality
of
the
foregoing,
nothing
in
those
sections
makes
the
Crown
liable
in
respect
of
anything
done
or
omitted
in
the
exercise
of
any
power
or
authority
exercisable
by
the
Crown,
whether
in
time
of
peace
or
of
war,
for
the
purpose
of
the
defence
of
Canada
or
of
training,
or
maintaining
the
efficiency
of,
the
Canadian
Forces.
In
384238
Ontario
Ltd.
et
al
v.
The
Queen,
[1981]
C.T.C.
295;
81
D.T.C.
5215
(F.C.T.D.)
the
plaintiff
companies
were
unsuccessful
in
their
claim
for
damages
allegedly
sustained
when
assets
were
seized
pursuant
to
a
certificate
registered
under
section
223
of
the
Income
Tax
Act.
The
Court
found
that
the
assets
in
question
had
been
validly
transferred
to
the
plaintiffs
and
were
therefore
exempt
from
seizure.
The
Court
also
held
that
as
there
had
been
no
negligence
in
making
the
seizure
(either
on
the
part
of
the
sheriff
in
carrying
out
the
seizure
or
the
Department
of
National
Revenue
in
instructing
the
sheriff)
and
as
the
plaintiffs
failed
to
prove
that
they
suffered
compensable
damages,
no
damages
were
awarded.
Walsh,
J.
noted
at
page
3078
(D.T.C.
5225)
of
the
judgment:
.
.
.
The
evidence
discloses
no
negligence
on
the
part
of
the
Sheriffs
carrying
out
the
seizure,
and
in
any
event
Section
3(6)
[now
s.8]
of
the
Crown
Liability
Act
would
appear
to
protect
the
Crown
from
any
claim
arising
from
the
manner
in
which
the
seizure
was
made
as
a
result
of
the
judgment
rendered
pursuant
to
the
provisions
of
the
Income
Tax
Act.
If
there
were
to
be
any
claim
against
the
crown
under
Section
3
of
the
Crown
Liability
Act,
it
would
have
to
be
by
virtue
of
some
negligence
on
the
part
of
William
O'Neil
the
employee
of
the
Department
of
National
Revenue
charged
with
the
matter.
For
such
a
claim
to
be
effective
negligence
would
have
had
to
be
such
as
to
give
rise
to
a
cause
of
action
in
tort
against
him
pursuant
to
section
4(2)
of
the
Crown
Liability
Act.
[now
s.10]
and
concluded
at
page
312
(D.T.C.
5229):
It
is
not
sufficient
for
plaintiffs
to
establish
that
damages
have
been
caused
as
a
result
of
the
detention
and
seizure,
even
to
the
extent
that
they
can
do
so,
as
in
order
for
them
to
have
a
valid
claim
to
such
damages
they
must
establish
fault
on
the
part
of
the
defendant,
and
in
this
they
have
failed.
Similarly
in
the
case
before
me,
section
8
of
the
Crown
Liability
Act
protects
the
Crown
from
any
claim
arising
from
the
garnishment
and
certification
made
pursuant
to
the
provisions
of
sections
224
and
223
of
the
Act.
If
there
is
a
claim
against
the
Crown
it
would
have
to
be
by
virtue
of
some
negligence
on
the
part
of
the
officials
involved
or
named
by
the
plaintiff,
and
which
would
give
rise
to
a
cause
of
action
in
tort.
If
there
is
no
such
cause
of
action,
then
the
plaintiff’s
case
would
have
to
be
dismissed.
Certainly
it
is
not
clear
from
the
pleadings
on
what
basis
the
plaintiff
is
formulating
his
claim
for
damages
—and
without
benefit
of
counsel
he
has
drafted
a
"layman's"
statement
of
claim
lacking
the
clarity
one
would
expect
if
drafted
by
a
counsel.
Are
there
possible
causes
of
action
which
may
result
in
liability
on
the
part
of
the
Crown?
Any
Basis
Here
for
a
Claim
for
Damages?
Seizure
of
property:
On
the
facts
there
was
no
actual
seizure
of
property
and
so
there
is
no
cause
of
action
on
this
ground.
It
is
clear
from
the
evidence,
as
indicated
earlier,
that
servants
of
Revenue
Canada
secured
a
certificate
pursuant
to
subsection
223(2)
of
the
Act.
In
Exhibit
PI,
Tab
P42,
we
see
that
R.
Mitchell
of
Collections
wrote
to
the
plaintiff
on
June
8,
1981
to
advise
that
they
had
secured
judgment
in
two
courts
and
recorded
against
the
plaintiff's
property
(his
house).
He
was
cautioned
that
these
documents
“may
be
turned
over
to
the
High
Sheriff
for
Kings
County
with
instructions
to
seize
and
sell
sufficient
of
your
personal
assets
to
satisfy
this
debt.
To
avoid
this
and
further
legal
action
being
taken
against
you
please
forward
your
certified
cheque
or
money
order
for
the
above
noted
balance
($45,945.90)
to
the
attention
of
the
writer
within
15
days
of
the
above
date."
There
was
a
clear
misunderstanding
of
the
law
by
the
plaintiff
who
assumed
the
certificate
could
not
be
secured
unless
and
until
he
had
an
opportunity
to
offer
a
defence.
Here,
therefore,
given
the
law
as
it
then
was
(and
mercifully
it
has
been
changed),
the
defendant
had
the
authority
to
secure
the
certificate.
Certainly,
for
all
practical
reasons
it
was
a
seizure
because
the
plaintiff
was
clearly
not
in
a
position
to
meet
the
conditions
of
the
June
8,
1981
letter
and
thus
the
threat
hung
over
his
head
like
a
Damocles'
sword.
Trespass:
The
next
possible
cause
is
in
trespass.
If
the
garnishment
was
done
in
accordance
with
the
provisions
of
section
224
and
the
powers
granted
by
the
Minister
under
this
section
were
exercised
by
a
person
properly
delegated
to
act
under
section
900
of
the
Regulations,
then
that
person
or
persons
would
be
expressly
excepted
from
any
claim
for
trespass.
In
this
regard,
Le
Dain,
J.'s
comment
in
Stephens
Estate,
supra,
at
pages
144-5
(D.T.C.
6138)
should
be
noted:
There
is
also
in
my
opinion
considerable
doubt
about
the
cause
of
action
against
Morrison
based
on
the
exercise
of
the
Minister’s
power
to
make
a
demand
on
third
parties
that
is
conferred
by
section
224
of
the
Act
and
delegated
by
section
900
of
the
Regulations.
He
is
expressly
excepted
from
the
claims
for
wrongful
seizure
and
trespass.
A
demand
on
third
parties
pursuant
to
section
224
is
a
direction
to
a
debtor
of
the
taxpayer
to
pay
what
he
owes,
up
to
the
amount
of
the
sum
owing
by
the
taxpayer
to
the
Crown,
to
the
Receiver
General.
Since
that
act
does
not
involve
an
interference
with
the
possession
of
corporeal
property
I
do
not
see
how
it
could
be
considered
to
be
either
trespass
or
conversion.
There
would
appear
to
be
no
basis
for
treating
it
in
the
same
way
as
the
conversion
of
a
cheque,
in
which
the
face
value
of
the
cheque
is
taken
to
be
the
value
of
the
chattel
that
is
converted.
See
Lloyd's
Bank
v.
Chartered
Bank
[1929]
1
K.B.
40
at
55-6.
For
these
reasons
I
also
do
not
see
how
the
garnishment
order
made
pursuant
to
subsection
224(1)
could
be
considered
trespass.
Misfeasance:
Another
possible
cause
of
action
the
plaintiff
may
have
is
that
of
misfeasance
in
public
office.
The
categories
of
acts
which
give
rise
to
liability
for
this
tort
are
generally
considered
to
be
where
the
administrative
act
is
unlawful
because
it
is
actuated
by
malice
and
where
the
authority
knows
that
it
does
not
possess
the
power
which
it
is
purported
to
exercise.
(MacBride,
Damages
as
a
Remedy
for
Unlawful
Administrative
Action,
(1979)
38
Camb.
L.J.
323
at
326,
and
Stephens
Estate,
supra,
at
page
144
(D.T.C.
6137
and
6138).
Therefore
the
plaintiff
must
show
that
the
persons
involved
were
acting
with
malice
or
intent
to
injure,
or
that
they
were
acting
without
authority.
When
one
looks
behind
the
veneer
of
seemingly
reasonable,
accommodating
and
legally
authorized
actions,
it
is
not
too
difficult
to
find
both
malice
and
a
clear
indication
that
the
officials
knew
that
they
did
not
possess
the
power
which
they
purported
to
exercise.
Malice
1.
Use
of
suspect
documents
voluntarily
offered
by
the
taxpayer:
It
was
malicious
of
officials
to
take
the
documentation
volunteered
by
the
plaintiff
(which
the
plaintiff
made
clear
was
suspect
and
he
gave
the
cogent
reasons),
and
then,
rather
than
using
it
to
help
the
taxpayer
make
his
case,
used
this
tainted
material
against
him.
We
did
not
have
the
evidence
at
this
trial
of
the
"Assessment
section”
of
Revenue
Canada,
(Assessment)
but
we
have
ample
evidence
from
the
plaintiff
that
this
in
fact
took
place
and
was
not
challenged
by
the
defendant.
The
officials
in
both
Assessment
and
the
Collection
section
(Collection)
of
Revenue
Canada
failed
in
their
responsibility
to
get
at
the
truth.
It
is
no
defence
for
Collection
to
wash
their
hands
of
responsibility
and
say
they
have
this
information
or
assessment
from
Assessment
and
they
must
act.
To
ignore
the
pleas
of
taxpayers
with
legitimate
concerns
and
to
take
actions
which
lead
to
securing
certificates,
and
a
garnishee
order,
is
to
abdicate
one's
responsibility—it
is
malicious.
It
is
a
clear
violation
of
their
own
guidelines,
which
guidelines
were
sent
to
the
plaintiff
by
the
Deputy
Minister
Bruce
A.
MacDonald.
The
plaintiff
read
them;
one
wonders
if
the
officials
in
Collections
did.
Paragraphs
2
and
13
of
these
Guidelines
read:
2.
Because
the
majority
of
taxpayers
pay
their
taxes
when
due
in
compliance
with
the
law,
departmental
collection
policy
provides
for
a
firm
approach
in
dealing
with
delinquents
so
as
not
to
discriminate
against
those
who
pay
promptly.
At
the
same
time
the
Department
recognizes
that
there
are,
at
times,
circumstances
that
may
prevent
immediate
payment.
In
these
cases,
taxpayers,
immediately
upon
receiving
a
notice
of
assessment,
must
contact
the
Collection
Section
of
their
local
District
Office
in
order
to
make
arrangements
for
payment
acceptable
to
the
Department
which
are
in
line
with
their
proven
ability
to
pay.
13.
When
a
taxpayer
questions
the
assessment,
normal
collection
action
on
the
disputed
portion
of
the
assessment
will
be
suspended
only
when
the
taxpayer
presents
evidence
supporting
a
claim
of
incorrect
assessment
which
may
result
in
the
disagreement
being
settled
in
the
taxpayer's
favour.
What
were
the
plaintiff's
circumstances
here?
He
came
to
Canada
in
1971
as
a
fully
trained
physician
with
his
wife
and
five
children
and
settled
in
Nova
Scotia
providing
medical
services
to
the
community
of
Canning.
He
also
brought
with
him
a
substantial
amount
of
money
gained
from
his
medical
practice
in
India
and
Kenya.
The
separation
of
Pakistan
as
a
separate
country
and
the
Mau
Mau
dangers
in
Kenya
at
the
time
resulted
in
his
decision
to
secure
his
future
and
that
of
his
family
in
Canada.
His
dealings
with
Revenue
Canada
were
exemplary.
It
is
worth
noting
his
letter
of
March
22,
1982
to
the
above-mentioned
Deputy
Minister
because
he
makes
his
point
better
than
I
can.
Re:
Account
Number
009
007
3
This
is
to
acknowledge
your
letter
dated
March
15,
1982
and
the
enclosed
Information
Circular
No:
75-16R.
Having
carefully
read
the
circular,
I
respectfully
submit,
that
to
the
best
of
my
knowledge
and
belief,
I
have
not
committed
any
of
the
acts
enumerated
in
this
circular
to
deserve
the
treatment
accorded
to
me
by
your
department.
I
have
neither
evaded
nor
avoided
any
tax.
In
particular,
far
from
being
a
delinquent,
I
have
hitherto
consistently
and
conscientiously
offered
all
my
sincere
co-operation
towards
reaching
a
practical
solution
of
the
problem
in
the
equitable
discharge
of
my
obligation
under
the
circumstances
already
placed
before
you.
You
will
recall
Sir,
that
I
came
to
this
country
at
the
age
of
51.
Whereas
it
costs
the
government
here
between
$150,000.
to
$200,000.
of
the
tax
payers
money
to
train
a
physician,
all
my
education
was
fully
paid
for
by
my
parents
and
the
taxpayer
in
India.
Along
with
the
valuable
assets
of
professional
experience,
maturity
and
the
integrity
of
character,
I
had
also
brought
with
me
all
my
physical
possessions
including
my
life-long
savings
and
capital.
As
an
additional
asset
I
can
count
my
beautiful
and
well-bred
children,
come
with
me
in
the
prime
of
their
education,
who
are
all
useful
and
responsible
citizens
of
this
country.
Ever
since
I
came
to
Canada
in
1971,
I
have
regularly
and
meticulously
paid
an
average
sum
of
$4,000.
each
quarter
in
direct
taxes
to
the
revenue
department.
I
have
devoted
all
my
energies
faithfully
and
scrupulously
in
the
service
of
this
my
adopted
country.
My
professional
services
have
been
rendered
to
all
my
patients
with
diligent
care
and
devotion
to
the
utmost
satisfaction
of
every
one
concerned.
It
is
not
unnatural
also,
that
even
in
the
face
of
a
serious
adversity,
I
did
not
hesitate
to
fully
and
frankly
disclose
and
discuss
my
difficulties
with
your
department
arising
out
of
an
ill-fated
experience
and
the
set-back
suffered
by
me
through
no
fault
on
my
part.
I
could
have
been
more
than
helpless
to
rectify
the
situation
completely,
but
nevertheless
I
did
try
my
best
to
exercise
a
reasonable
judgment,
in
all
good
faith,
to
minimize
the
impact
and
to
save
whatever
had
been
possible
to
be
saved
from
total
loss
and
collapse
according
to
the
data
submitted
to
you
earlier.
Although
on
the
basis
of
the
foregoing
account,
I
would
have
been
expected
to
stake
a
claim
to
being
a
model
tax-payer,
yet
here
I
am
crestfallen,
deeply
saddened
and
disillusioned,
in
view
of
the
myopic
attitude
of
your
department,
to
find
myself
branded
as
a
delinquent
instead,
and
made
to
suffer
the
pangs
of
pain
and
humiliation
for
the
crime
of
being
honest
and
truthful.
How
could
you
justify,
may
I
ask
Sir,
that
your
department
had
any
cause
to
proceed
to
encumber
my
very
honour,
integrity
and
reputation,
including
my
personal
and
real
property
and
all
else
that
is
worthwhile
to
a
man
in
life,
and
is
further
embarked
on
destroying
my
livelihood,
happiness
and
the
roof
over
my
head,
to
satisfy
a
claim
which
exists
only
in
surmise
and
is
based
on
a
mere
assumption,
the
Certificates
of
Judgement
referred
to
in
your
letter
having
been
recorded
against
me
in
a
unilateral
representation
by
your
department
without
due
regard
given
to
the
facts
and
the
circumstances
of
the
case
in
question?
Most
respectfully,
I
take
the
liberty
to
add,
Sir,
that
a
"Judgement"
of
this
kind,
devoid
of
logic,
reason
and
Common
Sense,
does
not
necessarily
commend
itself
to
serve
the
cause
of
“Justice”,
which
is
after
all
the
constitutional
right
of
every
citizen
in
a
democracy
to
obtain!
[Emphasis
added.]
In
the
circumstances
of
this
case
it
is
clear
that
Revenue
officials
knew
or
should
have
known
that
they
were
dealing
with
an
honest
taxpayer
who
had
faithfully
complied
with
the
requirements
of
the
Income
Tax
Act
paying,
"an
average
sum
of
$4,000
each
quarter
in
direct
taxes
to
the
Revenue
Department".
With
this
in
mind
they
had
the
strong
indication
from
their
own
Guidelines
quoted
above
that,
"the
Department
recognizes
that
there
are
at
times
circumstances
that
may
prevent
immediate
payment".
There
was
clearly
no
attempt
by
the
taxpayer
to
hide
the
fact
that
he
had
purchased
a
property
in
California
and
he
had
in
fact
written
to
the
Department
to
that
effect.
The
documentation
which
he
"volunteered"
to
Revenue
Canada
officials
was
suspect
as
the
taxpayer
indicated
and
for
that
reason
requested
further
investigation.
One
can
only
imagine
the
frustration,
resentment
and
anger
that
this
honest
taxpayer
must
have
felt
when
Revenue
Canada
officials
took
the
action
that
they
did,
namely,
not
to
help
him
but
to
use
the
suspect
documentation
to
tax
him
and
then
to
collect
on
those
taxes.
Both
Mr.
Douglas
Bruce
of
Assessment
and
Mr.
D.
Bennett
of
Collection,
through
their
treatment
of
this
particular
taxpayer
in
this
way,
were
malicious.
2.
The
Garnishee:
This
is
a
very
powerful
weapon
in
the
Collection
arsenal
and
because
it
is
so
powerful,
surely
it
must
or
should
be
used
in
a
reasonable
way.
One
can
easily
appreciate
the
need
for
such
authority
to
stop
taxpayers
seeking
to
move
assets
out
of
the
country
or
to
combat
criminal
activity
where
warranted.
After
receiving
his
notice
of
assessment
for
taxation
year
1979
(Exhibit
PI,
Tab
P32)
the
plaintiff
indicated
in
his
letter
to
Collection
(Exhibit
PI,
Tab
P33)
that
he
did
not
agree
with
the
assessment,
set
forth
the
reasons
and
advised
he
would
"only
be
in
a
position
to
pay
taxes
on
the
gain,
if
any,
after
my
initial
capital
has
been
recouped
and
when
the
gain
is
actually
realized
and
received
in
hand
(emphasis
added)."
The
plaintiff
had
invested
a
significant
amount
of
capital
and
of
course
if
he
realized
only
that
amount
then
there
was
no
Capital
gain.
He
received
a
form
letter
demanding
payment.
However,
Mr.
Doug
Bruce
of
Assessment
did
meet
with
the
plaintiff
and
the
plaintiff
followed
up
with
his
own
"provisional
assessment
of
the
situation
based
upon
the
information
placed
before
you
and
deduced
from
the
facts
in
my
possession
at
the
present
time”.
(Exhibit
P1,
Tab
P36)
(Emphasis
added).
This
obviously
had
no
impact
on
Revenue
Canada,
and
certainly
not
Collection
because
on
February
20,
1981,
Mr.
D.
Bennett
threatened
the
plaintiff
with
action
for
non-payment
of
tax.
The
plaintiff
tried
again
to
make
the
point
with
Mr.
Bennett
in
Exhibit
PI,
Tab
P37
and
also
asked
him
to
consider
an
arrangement:
As
the
circumstances
in
this
case
are
of
an
exceptional
and
extraordinary
nature,
I
would
request
that
I
be
allowed
to
speak
or
communicate
with
some
one
higher
up
because
as
already
pointed
out
all
funds
are
tied
up
in
the
total
deal
and
are
beyond
my
reach
at
the
present
time.
I
can
only
pay
as
and
when
the
amount
is
realized.
Alternatively,
as
suggested
by
me
I
shall
be
willing
to
work
out
an
arrangement
with
you
so
that
the
two
issues
can
be
isolated
and
considered
separately,
whereby,
as
for
my
income
in
Canada
I
shall
be
willing
to
send
you
$1,000.00
monthly
from
March
1981
onwards
to
meet
the
liability
for
the
1980
tax
until
the
matter
can
finally
be
resolved.
On
February
26,
1981
Mr.
P.L.
Keddy
of
Collection
advised
of
the
garnishee
action
already
taken
(on
February
24,
1981)
and
that
Mr.
D.C.
Horne,
Chief
of
Collection,
would
be
willing
to
talk
at
any
time.
The
plaintiff
was
also
advised
his
account
was
now
subject
to
further
legal
action
and
it
was
suggested
he
contact
the
office
immediately.
The
Demand
on
Third
Parties
was
served
on
Medical
Services
Incorporated
(M.S.I.)
who
were
advised:
You
are
hereby
ordered
to
pay
the
monies
otherwise
payable
to
the
said
taxpayer
to
the
Receiver
General
of
Canada,
but
do
not
pay
hereunder
more
than
$50,301.32
at
the
rate
of
75%
of
each
future
gross
payment.
[Emphasis
added.]
On
March
3,
1981,
Keddy's
letter
of
February
26,
1981
was
acknowledged
and
the
plaintiff
agreed
to
call
Mr.
Horne's
office
for
an
appointment
which
interview
took
place
on
Friday,
March
13,
1981.
Typical
of
the
plaintiff
(and
fortunately
for
him
because
it’s
on
the
record)
he
wrote
a
letter
to
Mr.
Horne
on
March
23,
1981
"to
place
on
record
our
conversation”.
Mr.
Horne
conceded
in
evidence
that
the
letter
was
an
accurate
reflection
of
their
meeting.
This
letter
is
Exhibit
PI,
Tab
P41
and
because
of
its
importance
as
a
basis
for
my
reasons,
it
is
reproduced
in
full:
Dear
Mr.
Horne,
This
is
to
thank
you
for
the
interview
given
to
me
on
Friday,
March
13,
1981.
Mr.
P.L.
Keddy
of
your
department
was
in
attendance.
I
write
this
letter
to
place
on
record
our
conversation.
The
meeting
started
in
Halifax
at
approximately
9.30
a.m.
at
the
Hollis
street
offices.
I
proceeded
to
narrate
to
you
how,
after
my
immigration
to
Canada
in
September
1971,
I
had
brought
all
my
savings
with
me
accumulated
over
the
previous
27
years
of
my
earnings
as
a
medical
practitioner.
I
also
informed
you
how,
through
a
stroke
of
ill
luck
and
poor
judgement
on
my
part,
I
was
led
to
invest
these
savings
in
a
property
deal
in
the
U.S.
in
partnership
with
my
nephew
in
march
1974,
who
had
subsequently
let
me
down.
He
being
a
U.S.
citizen
and
a
resident
was
entrusted
with
the
day
to
day
management
of
the
property.
Being
a
Canadian
resident
myself,
I
had
advised
the
Revenue
Canada
voluntarily
of
this
investment
by
a
letter
written
in
August
1975
after
the
completion
of
the
first
fiscal
year
of
the
accounts.
I
produced
further
documentary
evidence
before
you
to
show
that
the
accounts
for
the
second
fiscal
year
ending
in
December
1975
had
not
been
sent
to
me
until
March
1977.
There
was
no
income
to
be
reported
for
these
years.
However
in
June
1977,
a
major
tenant,
the
Safeways,
who
apparently
were
not
doing
well
in
their
business
on
these
premises,
expressed
interest
for
their
lease
cancellation
for
which
they
had
agreed
to
compensate
the
partnership
with
a
sum
of
$200,000.00.
In
an
act
of
trust
and
good
faith
in
my
nephew,
I
gave
my
Power
of
Attorney
to
his
wife
to
facilitate
the
completion
of
this
deal
which
was
finalised
in
August
1977.
From
this
point
on
things
started
to
go
wrong
apparently.
In
September
1977
I
suffered
a
serious
heart
attack
as
a
result
of
which
I
was
laid
up
for
nearly
three
months
and
was
prevented
from
pursuing
both
my
professional
practice
and
the
business
interests
actively.
Also
my
partner
had
ceased
mailing
to
me
any
further
statements
of
account
on
the
property.
Whereas
I
should
have
received
from
him
one
half
of
the
proceeds
received
as
compensation
for
the
lease
cancellation,
when
requested,
he
had
only
sent
me
a
check
for
$16,000.00
in
November
1977
and
had
withheld
the
remainder
of
the
amount
in
his
possession.
In
the
month
of
April
or
May
1978,
he
called
me
one
morning
and
demanded
funds
in
order
to
meet
the
outgoings
and
commitments
on
the
property
to
keep
its
operation
going.
This
caught
me
with
complete
surprise
in
view
of
the
large
amount
of
funds
already
withheld
by
him
and
received
from
the
Safeways.
I
however,
decided
to
go
there
personally
to
find
things
out
for
myself
about
the
disposition
of
these
funds.
Although
the
timing
of
this
visit
was
arranged
primarily
to
suit
my
partner's
sole
convenience,
when
I
arrived
there
in
August
1978,
he
refused
to
cooperate
and
persistently
stalled
me
from
viewing
the
books
and
the
accounts.
Nor
was
any
explanation
warranted
for
the
disappearance
of
$200,000.00
in
a
short
period
as
this.
Apparently
the
partnership
funds
had
been
channelled
by
him
into
his
personal
business
ventures.
In
the
meantime
he
had
also
taken
over
the
complete
control
of
the
bank
account
by
having
my
name
erased
from
the
joint
partnership
account
and
replacing
this
with
his
son's
and
his
wife’s
name
instead.
When
I
visited
the
premises,
I
found
them
to
be
seriously
neglected
and
in
a
state
of
dilapidation.
Also
I
discovered
that
the
City
authorities,
after
they
had
received
complaints
from
the
neighbourhood
residents
and
the
tenants
on
the
property
about
the
dilapidated
state
of
the
property
had
threatened
to
take
remedial
action
for
the
restoration
of
the
property
involving
thousands
of
dollars
of
expenditure
in
the
maintenance
costs.
All
those
documents
were
placed
before
you
for
inspection
and
substantiation.
When
I
grasped
the
seriousness
of
the
situation,
the
first
thing
I
had
to
do
was
to
get
my
nephew
off
my
back
and
stop
him
from
squandering
further
funds.
My
next
instinct
was
to
try
and
salvage
whatever
was
possible.
This
was
a
dilemma
because
I
was
poised
between
the
devil
and
the
deep
sea
under
the
circumstances.
The
only
way
out
was
to
sell
the
property,
because
if
it
was
not
done
quickly
it
was
bedoomed
to
a
foreclosure.
To
avoid
this
from
happening
we
had
to
get
rid
of
it
at
any
terms,
howsoever
imperfect,
and
for
this
reason
I
decided
to
accept
the
terms
of
the
instalment
sale.
In
leading
this
to
a
completion
I
had
to
pump
a
further
capital
of
$6600.00
for
the
closing
costs
involved
as
all
funds
had
been
sweeped
clean
out
of
the
bank
account
by
my
partner
over
which
I
had
had
no
longer
any
control.
I
notified
the
Revenue
Canada
of
the
situation
as
soon
after
the
conclusion
of
the
deal
on
December
4,
1978
by
letter
dated
December
16,
1978.
Further,
in
view
of
the
large
amount
of
funds
remaining
unaccounted
by
my
partner
and
because
of
the
suspicious
circumstances
surrounding
the
withdrawal
of
large
sums
of
money
by
him
and
his
wife,
I
also
requested
the
I.R.S.
in
the
U.S.
for
a
complete
audit
of
the
partnership
accounts
for
this
period.
There
has
been
no
response
from
them
so
far.
Owing
to
the
nature
of
the
sale.
not
only
there
has
been
a
negative
cash
flow
but
the
full
extent
of
the
losses
suffered
by
me
through
the
misappropriation
of
funds
has
not
been
determined
to
be
taken
into
consideration
before
arriving
at
the
exact
state
of
affairs.
This
has
been
hampered
by
the
unavailability
of
books
and
accounts
from
my
partner.
In
concluding
the
interview
I
spoke
to
you
of
being
profoundly
distressed
by
the
action
instituted
by
Mr.
D.
Bennett
of
your
department
in
placing
a
demand
on
the
N.SI.
from
my
income
accrued
from
them.
During
the
past
nine
years
that
I
have
been
in
Canada.
I
have
always
regularly
and
faithfully
paid
my
taxes
in
the
past
and
I
see
no
justification
in
this
action
which
is
likely
to
undermine
my
integrity
and
position
within
the
profession.
As
I
explained
to
you
my
income
during
the
past
year
has
been
severely
curtailed
due
to
circumstances
beyond
my
control
and
my
current
gross
takings
are
no
more
than
$3500.00
to
$4000.00
per
month.
With
the
75%
of
this
amount
taken
away
by
the
Revenue
Canada,
this
leaves
me
with
insufficient
funds
to
cover
my
office
expenses,
let
alone
to
maintain
my
family
and
all
this
because
in
your
own
words
I
have
been
'too
honest'
in
making
these
voluntary
disclosures.
This
does
not
leave
me
with
an
incentive
to
work
like
a
drudge
for
the
remainder
of
my
life
and
pay
the
price
of
this
honesty
and
this
approach
will
more
likely
force
me
out
of
business
thereby
killing
the
hen
that
lays
the
golden
egg.
I
shall
therefore
request
you
to
rescind
immediately
the
action
taken
through
the
M.SI.
so
as
to
restore
to
me
the
opportunity
to
fulfil
my
obligations
of
a
citizen
in
a
dignified
manner
on
fair
terms
as
proposed
by
me
in
my
letter
to
Mr.
Bennett
dated
February
23,
1981.
I
do
hope
you
will
consider
my
proposition
sympathetically.
[Emphasis
added.]
Clearly,
Mr.
Horne,
the
Chief
of
Collection,
had
all
the
salient
facts
—
nothing
was
hidden
and
he
had
the
plaintiff's
plea
that
the
garnishee
be
rescinded
for
the
reasons
cited.
One
should
reread
the
final
paragraph.
Consider
the
reply
from
Mr
Horne
on
March
26,
1981!
(Exhibit
PI,
Tab
P41A):
Dear
Sir:
Further
to
your
letter
of
March
23,
1981,
we
wish
to
advise
that
your
proposal
of
$1,000.00
dollars
per
month
to
clear
your
1980
taxes
does
not
do
anything
for
the
outstanding
arrears
of
approximately
$48,000.00.
After
discussion
with
Mr.
Bruce
of
our
Audit
Division,
it
appears
that
a
large
liability
will
remain
as
there
are
adjustments
both
upwards
and
downwards,
unfortunately
the
Demand
of
75%
to
M.S.I.
must
remain
in
effect
as
you
have
not
offered
any
other
arrangement
satisfactory
to
us.
We
suggest
that
you
look
into
using
the
receivable
you
have
in
the
United
States
as
security
to
obtain
a
loan
to
clear
this
tax
indebtedness.
What
fair-minded,
objective
person
could
see
anything
other
than
malice
on
the
part
of
these
officials
who
knew
the
likely
implication
of
any
garnishee
on
the
gross
income,
let
alone
75
per
cent?
Is
this
really
a
case
calling
for
a
75
per
cent
garnishee?
What
did
it
leave
the
plaintiff
after
he
met
his
overhead
expenses
and
the
mortgage
on
his
home?
This
was
clearly
a
malicious
action.
Although
not
bound
by
provincial
law,
surely
the
people
in
Collection
were
aware
that
no
one
is
permitted
to
garnishee
more
than
30
per
cent
of
an
employee's
wages.
Three
officials
all
concurred
in
the
garnishee
of
75
per
cent
of
gross
earnings
(and
they
all
knew
that
it
was
half
of
his
former
gross
earnings)
and
they
all
knew
or
could
have
satisfied
themselves
that
this
taxpayer
had
been
an
exemplary
taxpayer,
and
they
could
have
given
some
consideration
to
his
plight
which
would
be
clearly
exacerbated
by
a
75
per
cent
garnishee.
The
actions
taken
here
were
in
my
view
malicious
and
the
individual
servants
responsible
for
this
in
this
particular
instance
are
Mr.
D.
Bennett,
Mr.
P.L.
Keddy
of
Collection
and
Mr.
D.C.
Horne,
Chief
of
Collection.
3.
Compounding
the
problem:
Not
content
with
a
75
per
cent
garnishee,
the
people
in
Collection
also
moved
before
the
Federal
Court
and
the
Supreme
Court
of
Nova
Scotia
to
get
judgments
and
record
them
in
the
Registry
office
and
threatened
to
turn
the
documents
over
to
the
sheriff
to
seize
and
sell
personal
assets
if
the
plaintiff
did
not
forward
a
certified
cheque
or
money
order
for
$45,945.90.
By
this
date,
after
the
plaintiff's
interview
with
Mr.
Horne,
the
Chief
of
Collection,
they
knew
he
could
not
meet
their
demands
—more
malice
in
my
view.
A
plea
in
a
letter
on
June
21,
1981
(Exhibit
PI,
Tab
P44)
and
again
on
June
24,
1981
(Exhibit
PI,
Tab
P45)
requesting
the
Collection
people
to
reconsider
their
stand,
for
the
reasons
given,
met
with
this
response
(Exhibit
PI
Tab
P46):
In
reply
to
your
recent
letter,
we
wish
to
advise
that
the
Demand
on
Third
Parties
issued
against
the
Medical
Services
Incorporated
will
not
be
reduced
or
removed
until
such
time
as
either:
(1)
Your
account
is
paid
in
full;
or
(2)
Sufficient
real
security
to
secure
the
outstanding
balance
is
received
and
a
satisfactory
payment
plan
is
agreed
upon.
4.
Further
Actions
of
Officials:
It
is
clear
that
when
a
taxpayer
is
in
arrears,
even
arrears
which
he/she
objects
to
and
files
a
notice
of
objection,
the
officials
in
Collection
may
accept
or
reject
any
arrangement
suggested
by
the
taxpayer
as
being
inadequate.
One
is
hard-pressed
if
trying
to
find
no
malice
on
the
facts
here.
The
officials
in
Collection
refused
to
accept
$1,000
per
month
for
current
arrears,
and
an
assignment
of
any
benefits
flowing
from
the
sale
of
the
California
property.
The
officials’
reasoning
is
specious.
They
could
not
accept
the
sum
of
$233
per
month
because
it
was
too
low
and
because
they
could
not
(or
did
not
want
to)
sue
in
the
U.S.A.
in
the
event
of
a
default.
The
facts
are
that
the
payment
of
$233
per
month
ran
only
to
December
1981
and
was
then
to
be
increased
to
$1000
per
month,
and
later
$3,500
per
month.
Reason
should
have
dictated
(and
particularly
in
the
circumstances
here)
that
officials
agree
to
accept
the
monthly
payments
and
in
the
event
of
default
notify
the
plaintiff
and
seek
some
other
arrangement
for
security.
I
am
not
convinced
that
these
payments,
if
assigned,
could
not
have
been
pursued
by
Revenue
Canada
but
the
plaintiff
never
made
that
case.
Also,
while
all
of
this
pressure
to
pay
was
being
put
on
the
plaintiff,
the
officials
in
Collection
heard
from
Assessment
and
recorded
the
fact
that
the
assessments
would
be
"wiped
out”.
In
Mr.
Keddy's
own
handwriting
on
the
back
of
tax
collection
form
in
October
1980—“TP
(taxpayer)
has
inquiry
re
adj
in
taxes
—he
has
not
as
yet
received
any
money
from
sale,
thus
should
not
have
to
pay
gain
until
cash
is
received.
Field
Audit
agrees
with
T.P.
and
are
doing
audit
on
T.P.
with
2
weeks,
they
feel
it
will
be
worked
out
but
have
to
wait
for
audit
results"
and
then
on
the
same
sheet
two
and
a
half
months
later,
"TP
does
not
owe
these
dollars.
Not
sure
until
info
received
what
he
will
owe".
(Emphasis
added).
But,
despite
the
fact
that
Field
audit
agreed
with
the
taxpayer,
and
their
feeling
that
assessment
would
be
wiped
out,
and
in
January
1981,
that
“TP
does
not
owe
these
dollars”,
Collection
in
October
1980
demanded
payment
of
$48,372.59.
What
could
this
be
other
than
malice?
Or
consider
this
followup
after
acknowledging
that
"these
dollars
not
owed".
The
entry
continues
on
February
6,
1981
stating
they
(Assessment)
“will
allow
an
adjustment
but
found
a
lot
of
unreported
income
which
will
offset
most
of
previous
adjustment.
He
will
know
more
when
he
gets
77-78
T1
Returns".
Unfortunately
we
didn't
hear
from
Mr.
Bruce
or
get
any
explanation
from
anyone
at
Assessment.
Now
the
scenario
changes.
Bennett
telephoned
the
plaintiff
who
still
maintains
he
does
not
owe
the
money
and
Bennett's
own
note
confirms
this.
Here
is
the
entry
for
February
6:
TTT/P
(telephoned
the
taxpayer)
Said
does
not
owe
$.
Doug
Bruce
knows
circumstances.
Told
him
we
need
security
and
monthly
pay'ts
while
under
adj
or
appeal.
Said
he
will
give
us
the
48,000.00
note
due
him,
told
him
that
no
good.
Said
he
owns
his
house
&
has
equity
but
will
not
give
us
mortgage
(Basically
he
does
not
trust
our
system.)
Will
not
pay
substantial
payments,
offered
us
$237.00
as
that
what
he
gets
on
Notes
payment.
TP
said
that
he
never
received
money,
when
he
does
he
will
pay,
told
him
that
could
be
years.
Could
not
make
clear
to
TP
that
whether
or
not
he
owes
$
until
decision
was
made
we
need
security
and
monthly
payts.
Told
him
we
would
discuss
with
Doug
Bruce
and
advise
and
if
necessary
we
take
legal
action
to
collect.
Talked
to
Doug
Bruce,
will
reverse
the
above
assessment
but
TP
never
claimed
recapture
in
1976-1977-1978
and
another
assessment
approx.
30,000.00
to
35,000.00
could
be
raised.
He
is
not
sure
yet
and
has
to
get
info.
from
U.S.A.
and
tax
returns
from
park.
There
isn't
even
a
hint
to
the
taxpayer
that
money
was
not
owing
or
assessment
reversed.
Nor
is
there
even
a
suggestion
that
a
different
assessment
was
to
be
made
and
they
could
not
in
law
collect
on
first
assessment.
Withholding
the
true
state
of
affairs
is
malice.
The
notes
made
by
Bennett/Keddy
are
replete
with
evidence
of
malice
and
don't
have
to
be
elaborated
on
in
any
more
detail
here
except
for
one
final
malicious,
unfair,
unpardonable
stance
taken
by
Collection.
The
plaintiff
finally
had
to
sell
his
residence
owned
jointly
with
his
wife.
The
solicitor,
Mr.
Garth
Gordon,
who
acted
on
the
plaintiff's
behalf
wrote
requesting,
a
commitment
from
the
Department
to
issue
a
partial
release
of
1518
if
home
is
sold
and
we
to
receive
TP's
share
of
equity
(50%).
Proposed
sale
would
have
approximate
equity
$34,400
and
we
to
receive
$17,200.
The
amount
of
$17,200
it
is
noted
would
be
made
under
protest.
The
purchaser
has
proposed
to
assume
the
$16,800
owing
on
the
1st
mortgage
to
the
Royal
Bank.
April
26,
1982:
TCF
Gordon—advised
we
required
$30,000
before
we
issue
partial
release.
He
got
very
upset
&
stated
he
would
be
taking
action
against
the
Dept,
through
courts
to
force
the
partial
release.
advised
L.
Squire
of
above—advised
to
contact
Mr.
Butler
at
Justice.
Mitchell
to
Justice—advises
we
request
only
the
50%
we
are
entitled
to
and
no
more
&
not
to
put
our
request
for
$30,000.00
in
writing.
Also
to
advise
Gordon
immediately.
TC
Cordon—advised
that
we
would
accept
proposal.
One
wonders
what
would
have
occurred
if
the
plaintiff
had
had
no
legal
counsel
and
had
had
to
deal
with
these
officials
on
his
own.
It
is
interesting
that
the
sole
entry
on
December
9,
1981
by
Collection
is,
"T518
cannot
be
done
as
assessments
of
Oct
23/81
incorrect".
There
was
evident
malice
on
the
part
of
officials
in
setting
unreasonable
grounds
upon
which
they
would
accept
the
plaintiff's
offer
of
security.
They
did
not
have
an
appraisal
done
on
his
property
when
they
estimated
his
equity
in
the
property.
To
suggest
he
ask
for
money
from
friends
or
relatives
is
a
clear
misreading
of
this
man’s
character.
His
reasons
for
not
seeking
a
bank
loan
or
second
mortgage
were
reasonable.
Also
it
is
quite
clear
that
they
would
have
insisted
that
the
whole
of
the
equity
held
jointly
by
the
plaintiff
and
his
wife
be
applied
to
the
alleged
arrears,
as
in
fact
they
tried
to
do
with
Mr.
Gordon.
Here
is
a
man
who
has
laid
it
all
out
to
Mr.
Horne,
Chief
of
Collection—a
taxpayer
needing
help
or
at
the
very
least
some
consideration—offering
$1000
per
month
on
current
arrears.
With
his
income
cut
in
half
and
the
remainder
garnisheed
to
the
extent
of
75
per
cent
it
is
no
wonder
there
were
current
arrears.
This
was
refused
because
"the
current
year
had
not
been
assessed
and
so
could
not
be
accepted".
Wasn't
the
doctor
obliged
to
make
payments
on
a
quarterly
basis
or
he
would
be
in
arrears?
Couldn't
that
have
been
a
basis
for
accepting
the
$1000
offered?
Couldn't
they
at
least
have
sought
guidance
from
head
office
rather
than
reject
it
out
of
hand
on
the
spot?
The
plaintiff
made
a
most
reasonable
offer
but
Revenue
Canada
officials,
with
full
knowledge
of
the
plaintiff's
economic
plight,
were
unrelenting
and
unreasonable
—pure
malice,
or
overzealous
collectors
notwithstanding
paragraphs
2
and
13
in
their
own
circular.
5.
Officials
did
not
possess
the
power
they
purported
to
use:
In
my
mind
a
further
action
taken
by
Collection
in
Halifax
was,
if
not
malicious,
certainly
beyond
the
power
they
possessed.
This
group
of
merry
men
set
deadlines
for
Assessment
to
meet
to
get
its
work
done
or
they
would
proceed
to
collect
on
a
dubious
assessment
(declared
dubious
by
Assessment
and
later
wiped
out).
Who
gave
Collection
the
authority
to
establish
deadlines
on
Assessment—very
much
to
the
detriment
of
the
taxpayer
who
was
entitled
to
a
thorough
examination
of
his
documentation
and
not
a
timetable
set
by
Collection
who
had
no
authority
to
do
so.
This
was
a
Clear
abuse
of
power
and
certainly
malicious.
Lest
it
be
suggested
this
did
not
occur,
we
will
examine
the
handwritten
notes
in
Collection;
some
have
already
been
noted
but
the
full
entry
of
October
27,
1980
must
be
incorporated
here
and
I
shall
underline
the
more
pertinent
parts
regarding
abuse
of
power:
Checked
F.A.
Assessment
resulted
from
sale
of
Shopping
Center
in
U.S.A.
TP
did
not
report
any
income
from
this
source
nor
did
he
report
capital
gains
on
disposal.
TP
has
inquiry
re.
adj.
in
taxes
—he
has
not
as
yet
received
any
money
from
sale,
thus
should
not
have
to
pay
gain
until
cash
is
received.
Field
audit
agrees
with
TP
&
are
doing
a
audit
on
TP
with
2
weeks,
they
feel
it
will
be
worked
out
but
have
to
wait
for
audit
results.
They
filing
1718.
Told
him
O.K.
but
we
won't
wait
forever-we
can
hold
until
middle
of
December.
[Emphasis
added.]
"We
won't
wait
forever"
—maybe
not,
but
they
had
no
authority
to
say
how
long
they
would
wait,
or
to
put
a
deadline
on
Assessment.
This
is
clearly
malicious
vis-a-vis
the
taxpayer.
6.
T.
V.
Coverage:
The
evidence
is
uncontradicted
that
this
taxpayer's
problems
with
Revenue
Canada
were
the
subject
of
a
TV
presentation,
and
that
it
was
embarrassing
to
the
taxpayer
and
could
have
had
a
serious
impact
on
his
character
and
reputation.
Mr.
Bruce
MacDonald,
the
Deputy
Minister,
wrote
the
following
letter
in
response
to
the
taxpayer's
charge
that
officials
of
Revenue
Canada
were
responsible:
Dear
Mr.
Chhabra:
I
am
writing
in
reply
to
your
letter
of
February
11
concerning
your
income
tax
affairs.
My
Head
Office
officials
have
investigated
the
allegations
made
by
you
in
your
letter
and,
based
on
their
findings,
I
wish
to
state
I
am
satisfied
that
at
no
time
have
members
of
my
staff
discussed
your
income
tax
affairs
with
the
media,
the
Atlantic
Television
System
or
anyone
else
outside
of
my
Department.
Communication
of
information
to
unauthorized
persons
is
specifically
prohibited
by
section
241
of
the
Income
Tax
Act.
I
would
point
out
that,
as
you
are
aware,
Certificates
of
Judgement
out
of
the
Federal
Court
of
Canada
and
the
Supreme
Court
of
Nova
Scotia
have
been
recorded
against
you
at
the
Registry
of
Deeds
for
the
County
of
Kings
in
the
Province
of
Nova
Scotia.
This
information,
once
recorded,
is
a
matter
of
public
record
and
is
available
to
anyone
who
wishes
to
examine
these
records.
I
would
accept
that
the
taxpayer
was
unable
to
establish
his
allegation
that
Revenue
Canada
officials
leaked
information
to
Atlantic
Television
System.
7.
And
finally:
The
taxpayer
at
the
time
of
the
garnishee
proceeding
was
receiving
only
one-half
of
the
income
he
had
been
earning
earlier;
his
privileges
at
the
hospital
had
been
withdrawn.
An
article
from
Maclean's
by
Steven
Kimber,
March
8,
1982
(Ex.
PI,
Tab
61)
was
advanced
by
the
taxpayer
and
is
produced
here
for
three
reasons:
1)
to
give
the
background
to
this
case;
2)
to
show
that
the
taxpayer
retained
his
solid
reputation;
and
3)
to
indicate
that
V.
York's
memorandum
to
the
official
in
Mississauga
is
a
pretty
clear
indication
of
the
unfairness
of
the
treatment
afforded
this
taxpayer.
Now
look
at
a
portion
of
V.
York's
memorandum
dated
October
26,
1982
(Exhibit
D-49):
The
taxpayer
is
a
61
year
old
non-practicing
general
physician.
His
account
was
received
in
this
District
Office
in
September
1982
from
the
Halifax
District
Office.
Investigation
of
the
taxpayer
resulted
in
obtaining
the
following
details:
The
Taxpayer's
wife
moved
to
Mississauga
3
years
ago
and
purchased
a
residence
in
her
name
only.
The
taxpayer
remained
in
Nova
Scotia
to
defend
his
position
with
regards
to
the
death
of
three
patients
(on
separate
occasions).
Following
his
inability
to
practice
in
Nova
Scotia
and
a
highly
embarrassing
media
(T.V.
and
newspapers)
accounting
of
his
involvement,
the
taxpayer
moved
to
Mississauga.
During
the
taxpayer's
residence
in
Halifax
the
Department
received
garnishee
payments
of
$1,200
to
$2,200
per
month
from
a
provincial
health
plan.
(The
taxpayer
according
to
Collection
records
had
never
made
a
voluntary
payment.)
Further
investigations
have
revealed
that
the
taxpayer
has
an
equity-interest
in
a
California
commercial
property
which
pays
him
$983.
month
(U.S.
funds)
until
December
1984,
when
that
payment
will
increase
to
approximately
$3,700
a
month.
The
taxpayer
purchased
the
property
in
1973
together
with
other
principals
for
$975,000
(his
portion
stated
as
$105,000
then).
The
taxpayer
had
dealt
through
a
Bahamian
Bank
Account
in
the
past
and
is
able
to
secrete
monies
and
transfer
same
through
a
U.S.
account.
A
meeting
held
October
12,
1982
(10.00
a.m.
to
12.45
p.m.)
covered
many
of
the
outstanding
questions
yet
to
be
answered
by
this
taxpayer.
The
taxpayer
refused
to
divulge
various
details
during
the
meeting
and
at
one
point
broke
down
emotionally
and
cried
uncontrollably.
This
officer
indicated
to
the
taxpayer
at
that
time
that
the
Department
did
not
desire
to
appear
uncompassionate
and
that
various
options
were
open
to
him
(one
being
bankruptcy)
in
order
to
bring
the
matter
to
a
fuller
understanding
by
all
parties
of
his
financial
situation.
The
taxpayer
was
instructed
to
forward
or
bring
to
my
attention
a
net
worth
statement
together
with
an
income
and
expense
statement
by
Friday
October
15
1982.
Attached
you
will
find
a
copy
of
the
taxpayer's
response,
(clearly
not
what
was
promised,
or
expected)
received
today's
date
and
replied
to
immediately,
a
copy
thereof
is
attached
for
your
perusal.
In
conclusion
I
would
advise
that
this
taxpayer,
in
the
past
has
written
various
letters
to
and
sent
copies
to
the
Deputy
Minister's
Office
when
it
became
apparent
that
the
department
was
interested
in
collecting
the
balance
outstanding.
I
have
also
included
various
correspondence
copies
from
his
file
for
your
perusal.
Unfair—Would
any
person,
not
familiar
with
the
case,
after
reading
the
memo,
have
any
doubts
that
Chhabra
was
an
out-and-out
scoundrel?
Note—
”.
.
.
to
defend
(emphasis
added)
his
position
with
regards
to
the
death
of
three
patients
(on
separate
occasions)”:
Dr.
Chhabra
was
NOT
the
person
doing
the
defending—he
was
the
person
who
made
the
charges
against
a
Dr.
Anand.
’.
.
.
the
taxpayer
has
an
equity-interest
.
.
.
which
pays
him
$983.
month
(U.S.
Funds)
until
December
1984
when
that
payment
will
increase
to
approximately
$3,700
a
month":
but
Revenue
Canada
would
not
accept
this
and
stated
$233
per
month
was
too
small
a
payment
on
such
a
large
amount.
”.
.
.
has
dealt
through
a
Bahamian
Bank”:
through
two
trials
and
evidence
from
several
officials
and
argument
of
two
different
counsel,
this
allegation
was
never
made
or
even
hinted
at
(character
and
reputation
assassination?).
No
mention
is
made
of
the
taxpayer's
heart
attack
or
that
all
the
information
they
received
on
the
U.S.
purchase
came
from
the
taxpayer,
nor
that
he
made
an
offer
of
security
for
the
assessed
taxes.
Reference
is
made
to
highly
embarrassing
media
(TV
and
newspaper)
but
not
a
single
word
about
Mr.
Kimber's
two
articles,
one
in
Maclean's,
earlier
mentioned,
and
the
other
in
a
local
newspaper
which
lauded
his
coming
forth
to
expose
a
fellow
physician
and
which
articles
were
critical
of
the
Board
of
Directors
and
the
Provincial
Medical
Board.
This
memorandum
clearly
illustrates
the
mean-spirited
approach
to
this
taxpayer.
Why
would
it
be
so
inconceivable
that
a
taxpayer
would
write
“various
letters
to
and
copies
to
the
Deputy
Minister's
Office
when
it
became
apparent
that
the
department
was
interested
in
collecting
the
balance
outstanding”.
Here
in
fact,
and
as
he
later
proved,
he
did
not
owe
the
amount
claimed.
Damages
Special
damages:
The
plaintiff
did
not
list
or
prove
any
special
damages.
General
damages:
The
emotional
trauma
caused
to
this
taxpayer
is
undoubted.
The
defendant,
by
its
conduct
throughout,
served
to
exacerbate
the
plaintiff's
already
failing
health,
both
physical
and
mental.
The
Deputy
Minister
indicated
that
“Certification
of
Judgment
out
of
the
Federal
Court
of
Canada
and
the
Supreme
Court
of
Nova
Scotia
have
been
recorded
against
you
at
the
Registry
of
Deeds
.
.
.
This
information,
once
recorded,
is
a
matter
of
public
record
and
is
available
to
anyone
who
wishes
to
examine
these
records".
Precisely,
and
this
action
was
taken
by
the
Department
of
National
Revenue,
which
action
was
based
on
records
that
were
suspect.
Putting
this
matter
in
the
public
domain
caused
emotional
trauma
to
the
plaintiff
and
particularly
when
a
television
station
picked
up
on
the
story.
A
man's
reputation
is
a
precious
asset
and
the
plaintiff
felt
his
reputation
was
sullied
through
the
actions
taken.
I
would
award
$1,000
as
general
damages.
Exemplary
damages:
Author
Linden
in
Canadian
Tort
Law,
4th
edition,
Butterworth,
1988,
writes
at
page
54:
G.
Punitive
Damages
Defendants
found
liable
for
intentional
torts
may
be
ordered
to
pay
punitive
or
exemplary
damages
in
addition
to
the
special
and
general
damages
payable
in
ordinary
tort
cases.
Such
damages,
which
have
also
been
described
as
"vindictive",
"penal",
and
"retributory",
are
awarded
in
cases
of
high-handed,
malicious,
or
contemptuous
conduct
in
order
to
punish
the
defendant
for
the
wrong
and
to
make
an
example
of
him
in
order
to
deter
others
from
committing
such
torts.
Mr.
Justice
Schroeder
has
explained
the
scope
of
punitive
damage
principle
in
these
words:
Generally,
.
.
.
such
damages
may
be
awarded
in
actions
of
tort
such
as
assault,
trespass,
negligence,
nuisance,
libel,
slander,
seduction,
malicious
prosecution
and
false
imprisonment.
If,
in
addition
to
committing
the
wrongful
act,
the
defendant's
conduct
is
"high-handed,
malicious,
conduct
showing
a
contempt
of
the
plaintiffs
rights,
or
disregarding
every
principle
which
actuates
the
conduct
of
a
gentleman"
(to
quote
a
few
examples
taken
from
the
authorities)
his
conduct
is
an
element
to
be
considered
as
a
circumstance
of
aggravation
which
may,
depending
upon
its
extent
or
degree,
justify
an
award
to
the
injured
plaintiff
in
addition
to
the
actual
pecuniary
loss
which
he
has
sustained.
I
do
not
think
that
it
can
be
stated
with
any
precision
what
may
be
classed
as
aggravating
circumstances
but
malice,
wantonness,
insult
and
persistent
repetition
have
always
been
regarded
as
elements
which
might
be
taken
into
account.
With
respect
I
reject
the
narrow
view
in
Rookes
v.
Barnard,
[1964]
A.C.
1129
that
"the
availability
of
punitive
damages
should
be
severely
limited”.
It
is
clearly
not
the
case
in
Canada
which
is
rather
more
in
line
with
Strayer,
J.’s
view
in
Rumsay
v.
The
Queen,
32
Alta.
L.R.
(2d)
264;
12
D.L.R
(4th)
44
at
page
52
where
he
states:
The
plaintiff
also
seeks
exemplary
damages.
It
is
at
least
arguable
that
the
kind
of
conduct
here
might
come
within
the
rather
narrow
scope
of
exemplary
damages
prescribed
by
the
House
of
Lords
in
Roof
v.
Barnard
[1964]
A.C.
1129.
One
of
the
permissible
categories
for
exemplary
damages
recognized
in
that
case
was
that
of
"oppressive
arbitrary
or
unconstitutional
action
by
the
servants
of
the
government".
Moreover,
it
has
been
held
by
Canadian
courts,
including
those
of
Alberta,
that
in
this
country
the
scope
of
exemplary
damages
is
broader
than
that
recognized
in
Rookes
v.
Barnard:
see,
e.g.
Turnbull
v.
Calgary
Power
Ltd.
(1974),
51
D.L.R.
(3d)
562,
[1975]
3
W.W.R.
354
(Alta.
S.C.—app.
D.);
Waddams,
The
Law
of
Damages
(1983)
paras.
988-97.
In
the
Turnbull
case
the
Alberta
Supreme
Court,
Appellate
Division,
approved
language
employed
in
that
court
in
an
earlier
decision
to
the
effect
that
exemplary
damages
can
be
given
where
"the
conduct
of
the
defendant
was
high-handed,
abusive
and
insulting”.
Although
the
plaintiff
would
seek
to
lay
the
blame
for
all
his
misfortunes
at
the
door
of
Revenue
Canada,
the
evidence
is
quite
clear
that
other
factors
contributed
in
a
significant
way
to
his
plight.
Some
time
before
the
plaintiff
had
any
dealings
of
a
confrontational
nature
with
Revenue
Canada
and
during
these
dealings,
he
had
had
a
singularly
difficult
time
with
his
nephew
and
his
medical
colleague
Dr.
Anand,
the
Board
of
Directors
of
the
hospital
and
eventually
the
Nova
Scotia
Medical
Board.
There
is
no
evidence
that
the
plaintiff's
ill
health
was
due
only
to
the
treatment
he
received
from
Revenue
Canada,
other
than
his
own
declaration
that
it
is
so.
Certainly
his
problems
were
exacerbated
by
Revenue
Canada
and
particular
[sic]
their
decision
to
garnishee
to
the
extent
of
75
per
cent
his
gross
income,
which
income
had
been
cut
in
half
when
hospital
privileges
were
withdrawn.
His
long,
protracted
negotiations
and
pleas
with
Revenue
Canada
were
caused
in
large
measure
by
Revenue
Canada
and
the
malicious
acts
of
its
servants,
and
certainly
did
impact
on
him
mentally
and
physically.
These
negotiations,
with
even
a
modicum
of
co-operation
from
Revenue
Canada,
could
have
been
easier
and
more
productive
for
both
parties.
The
blame
for
the
lengthy
timeframe
can
be
laid
at
the
doorstep
of
the
defendant's
servants.
Their
failure
to
contact
I.R.S.,
their
insistence
on
using
documentation
that
was
clearly
dubious,
their
insistence
on
pursuing
a
debt
built
on
a
dubious
assessment,
their
insistence
on
a
75
per
cent
garnishee
of
gross
income
and
failure
to
make
any
realistic
attempt
to
settle
the
alleged
debt—all
were
factors
contributing
to
the
unfair
treatment
of
this
taxpayer.
The
taxpayer
did
not
seek
exorbitant
damages,
being
more
concerned
with
the
principles
involved
rather
than
the
quantum
of
damages.
The
amount
of
damages
I
have
allowed
“is
a
considered
reaction
based
on
the
evidence,
the
openness,
the
arguments
and
in
the
end
my
conclusion
of
fact".
These
directions
are
found
in
Guerin
v.
The
Queen,
[1982]
2
F.C.
385
at
441;
10
E.T.R.
61
(F.C.T.D.)
[reversed,
[1983]
2
W.W.R.
686;
143
D.L.R.
(3d)
416
(F.C.A.),
reversed,
[1984]
2
S.C.R.
335;
13
D.L.R.
(4th)
321].
Personally,
I
groaned
inwardly
when
I
heard
Mr.
Horne
in
evidence
state
near
the
end
of
his
testimony
(p.
300
of
transcript)
:
And
I
would
like
to
point
out
to
the
Court
that
the
treatment
given
Dr.
Chhabra
was
no
different
than
any
other
taxpayer
within
the
Halifax
District
Office
under
the
same
circumstances.
This
type
of
treatment
I
am
certain
is
not
what
the
taxpayer
expects
but
rather
he
expects
something
more
in
keeping
with
the
guidelines
sent
to
him
by
the
Deputy
Minister.
In
the
circumstances
here
I
am
awarding
the
taxpayer
exemplary
damages
of
$10,000..
The
plaintiff
is
of
course
entitled
to
his
disbursements.
Action
allowed.
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