Rouleau,
J.
[Translation]:—This
is
an
application
to
review
an
order
by
the
Minister
of
National
Revenue
which
directed
the
applicant
to
pay
forthwith
the
total
amount
of
the
reassessments
made
for
1983
and
1984.
The
total
amount
of
tax,
penalties
and
interest
required
for
these
years
is
$3,096,556.68.
Facts
On
March
11,
1986
the
Minister
of
National
Revenue
issued
the
applicant
notices
of
reassessment
for
its
taxation
years
1983
and
1984.
Even
before
the
ink
was
dry
on
these
notices
of
reassessment,
on
the
same
day,
the
Minister
ordered
the
applicant
to
pay
the
total
amount
of
these
reassessments,
$3,096,556.68,
forthwith.
Further,
on
March
12,
1986
the
Minister
seized
the
applicant’s
bank
account
at
the
Banque
Nationale
de
Paris,
seized
a
balance
of
sale
of
some
$6.2
million
in
the
Caisse
de
dépôt
et
de
placement
du
Québec
owed
to
the
applicant
and
seized
a
further
balance
of
sale
of
some
$700,000
owed
to
the
applicant
by
Alfid
Services
Immobiliers.
Legislation
For
clarification,
I
reproduce
section
225.2
of
the
Act
in
extenso:
225.2
(1)
Notwithstanding
section
225.1,
where
it
may
reasonably
be
considered
that
collection
of
an
amount
assessed
in
respect
of
a
taxpayer
would
be
jeopardized
by
a
delay
in
the
collection
thereof,
and
the
Minister
has,
by
notice
served
personally
or
by
registered
letter
addressed
to
the
taxpayer
at
his
latest
known
address,
so
advised
the
taxpayer
and
directed
the
taxpayer
to
pay
forthwith
the
amount
assessed
or
any
part
thereof,
the
Minister
may
forthwith
take
any
of
the
actions
described
in
paragraphs
225.1(1)(a)
to
(g)
with
respect
to
that
amount
or
that
part
thereof.
(2)
Where
the
Minister
has
under
subsection
(1)
directed
a
taxpayer
to
pay
an
amount
forthwith,
the
taxpayer
may
(a)
upon
3
days
notice
of
motion
to
the
Deputy
Attorney
General
of
Canada,
apply
to
a
judge
of
a
superior
court
having
jurisdiction
in
the
province
in
which
the
taxpayer
resides
or
to
a
judge
of
the
Federal
Court
of
Canada
for
an
order
fixing
a
day
(not
earlier
than
14
days
nor
later
than
28
days
after
the
date
of
the
order)
and
place
for
the
determination
of
the
question
whether
the
direction
was
justified
in
the
circumstances;
(b)
serve
a
copy
of
the
order
on
the
Deputy
Attorney
General
of
Canada
within
6
days
after
the
day
on
which
it
was
made;
and
(c)
if
he
has
proceeded
as
authorized
by
paragraph
(b),
apply
at
the
appointed
time
and
place
for
an
order
determining
the
question.
(3)
An
application
to
a
judge
under
paragraph
(2)(a)
shall
be
made
(a)
within
30
days
after
the
day
on
which
the
notice
under
subsection
(1)
was
served
or
mailed;
or
(b)
within
such
further
time
as
the
judge,
upon
being
satisfied
that
the
application
was
made
as
soon
as
circumstances
permitted,
may
allow.
(4)
An
application
under
paragraph
(2)(c)
may,
on
the
application
of
the
taxpayer,
be
heard
in
camera,
if
the
taxpayer
establishes
to
the
satisfaction
of
the
judge
that
the
circumstances
of
the
case
justify
in
camera
proceedings.
(5)
On
the
hearing
of
an
application
under
paragraph
(2)(c)
the
burden
of
justifying
the
direction
is
on
the
Minister.
(6)
On
an
application
under
paragraph
(2)(c),
the
judge
shall
determine
the
question
summarily
and
may
confirm,
vacate
or
vary
the
direction
and
make
such
other
order
as
he
considers
appropriate.
(7)
Where
the
judge
to
whom
an
application
has
been
made
under
paragraph
(2)(a)
cannot
for
any
reason
act
or
continue
to
act
in
the
application
under
paragraph
(2)(c),
the
application
under
paragraph
(2)(c)
may
be
made
to
another
judge.
(8)
Costs
shall
not
be
awarded
upon
the
disposition
of
an
application
under
subsection
(2).
As
the
introductory
subsection
of
section
225.2
indicates,
the
recovery
procedure
created
is
an
exception
to
the
general
rule,
laid
down
by
section
225.1,
limiting
the
Minister's
right
to
recover
unpaid
taxes.
Section
225.1
provides:
225.1
(1)
Where
a
taxpayer
is
liable
for
the
payment
of
an
amount
assessed
under
this
Act
(in
this
subsection
referred
to
as
the
“unpaid
amount”),
other
than
an
amount
payable
under
subsection
227(9),
the
Minister
shall
not,
for
the
purpose
of
collecting
the
unpaid
amount,
(a)
commence
legal
proceedings
in
a
court,
(b)
certify
the
unpaid
amount
under
subsection
223(1),
(c)
require
a
person
to
make
a
payment
under
subsection
224(1),
(d)
require
an
institution
or
person
to
make
a
payment
under
subsection
224(1.1),
(e)
require
the
retention
of
the
unpaid
amount
by
way
of
deduction
or
set-off
under
section
224.1,
(f)
require
a
person
to
turn
over
moneys
under
subsection
224.3(1),
or
(g)
give
a
notice,
issue
a
certificate
or
make
a
direction
under
subsection
225(1)
before
the
day
that
is
90
days
after
the
day
of
mailing
of
the
notice
of
assessment.
Background
The
introduction
of
this
legislation
was
in
accordance
with
the
government's
desire
to
protect
the
rights
of
taxpayers,
as
indicated
by
the
following
extract
from
the
Speech
from
the
Throne
opening
the
First
Session
of
the
Thirty-Third
Parliament
—
November
5,
1984:
The
rights
of
taxpayers
must
be
protected.
In
particular,
legislation
will
be
presented
to
ensure
that
no
taxpayer
has
to
pay
taxes
in
dispute
before
an
impartial
hearing
has
been
concluded.
In
concrete
terms
this
intention
took
the
form
of
a
bill
which
ultimately,
on
adoption,
became
chapter
45
of
the
Statutes
of
Canada
1985.
As
regards
the
purposes
of
the
bill,
I
take
the
following
extracts
from
a
speech
to
the
House
of
Commons
by
the
Parliamentary
Secretary
to
the
Minister
of
Finance.
The
extracts
are
taken
from
the
House
of
Commons
Debates
for
September
24,
1985,
at
pages
6935-36:
The
proposed
amendments
relate
mainly
to
three
points:
first,
collection
restrictions;
second,
the
repayment
of
contested
taxes;
third,
preventive
measures
against
abuses
of
the
new
system.
Although
an
assessment
established
by
Revenue
Canada
under
the
Act
is
payable
by
the
taxpayer
without
delay,
the
amendments
pertaining
to
collection
restrictions
provide
that
no
formal
collection
measure
may
be
taken
by
Revenue
Canada
within
90
days
of
the
assessment.
During
those
90
days
the
taxpayer
may,
as
is
the
case
now,
appeal
the
decision
of
the
Minister
by
producing
a
notice
of
objection
to
the
assessment.
If
a
taxpayer
does
not
produce
a
notice
of
objection
and
does
not
pay
the
assessed
amount,
according
to
the
amendments,
formal
steps
to
collect
this
amount
may
be
taken
90
days
after
the
date
of
assessment.
However,
if
the
taxpayer
does
produce
a
notice
of
objection,
formal
steps
to
collect
the
amount
in
controversy
shall
be
delayed
until
Revenue
Canada
has
concluded
its
review
of
the
objection
and
until
the
period
the
taxpayer
has
to
appeal
from
Revenue
Canada's
decision
on
the
objection
has
expired.
If
a
taxpayer
decides
to
appeal
before
a
court,
within
the
90-day
period
provided
under
the
Act,
to
challenge
the
assessment
as
confirmed
or
modified
by
Revenue
Canada,
the
Bill
provides
that
formal
steps
to
collect
the
amount
in
controversy
shall
again
be
delayed
until
the
court
hands
down
its
final
decision.
Should
the
court's
decision
be
favourable*
to
the
taxpayer,
the
latter
must
either
pay
the
amount
in
controversy
or
provide
security
for
that
amount
to
Revenue
Canada,
even
if
he
appeals
from
the
decision
to
a
superior
court.
As
in
the
present
Act,
interest
on
the
amounts
finally
determined
payable
by
the
taxpayer
is
calculated
from
the
date
on
which
those
amounts
were
initially
determined
to
be
payable.
In
addition
to
provisions
limiting
the
right
of
Revenue
Canada
to
commence
collection
procedures
before
the
taxpayer
has
had
an
opportunity
to
apply
to
a
court,
there
are
certain
amendments
allowing
the
taxpayer
to
ask
that
the
amount
in
controversy
that
he
has
already
paid
be
refunded
to
him
or
that
the
collateral
provided
for
that
amount
be
returned
to
him
until
he
appeals
before
a
court
from
the
assessment
or
the
new
assessment
established
by
the
Minister
of
National
Revenue.
Moreover,
if
Revenue
Canada
has
not
replied
to
an
objection
filed
by
a
taxpayer
within
120
days
from
the
date
he
served
his
notice
of
objection,
the
taxpayer
may
ask
that
the
amount
in
controversy
be
reimbursed
to
him
or
that
the
security
offered
by
him
be
refunded,
without
having
to
appeal
to
another
court.
In
addition,
the
proposed
bill
includes
safety
features
against
possible
abuses
of
the
new
system.
Where
there
are
reasons
to
believe
that
the
granting
of
a
delay
could
jeopardize
the
collection
of
the
amounts
in
controversy,
the
bill
allows
Revenue
Canada
to
take
forthwith
recovery
action.
On
the
other
hand,
the
taxpayer
has
a
right
to
ask
a
judge
to
review
the
opinion
of
Revenue
Canada
that
the
collection
of
the
amount
in
controversy
would
be
jeopardized
by
such
a
delay.
There
is
in
the
bill
another
safety
clause
which
authorizes
the
courts
to
collect
an
amount
not
exceeding
10
per
cent
of
the
amount
in
controversy
in
the
case
of
an
appeal
which
they
deem
unfounded
and
made
essentially
for
the
purpose
of
unduly
postponing
payment
of
the
amount
of
an
already
owed
contribution.
Mr.
Speaker,
the
inclusion
in
the
Income
Tax
Act
of
provisions
dealing
with
the
payment
of
amounts
in
controversy
is
a
concrete
effort
to
ensure
the
equitable
application
of
our
tax
collection
system,
based
more
on
a
spirit
of
natural
justice
than
judiciary
procedure.
Thanks
to
these
provisions,
taxpayers
will
not
have
to
pay
taxes
which
they
feel
they
do
not
owe
as
long
as
their
cases
have
not
been
heard
by
an
independent
court.
In
other
words,
the
taxpayer
will
not
be
deemed
guilty
until
fairly
dealt
with
by
the
courts.
This
is
a
major
step
in
the
implementation
of
a
fair
and
equitable
tax
collection
system
for
all
Canadians.
[My
emphasis]
In
short,
as
my
brother
Joyal,
J.
observed
in
Peter
S.
Laframboise
v.
The
Queen,
a
judgment
of
the
Federal
Court
on
July
2,
1986,
not
reported,
having
No.
T-667-86
(at
p.
2)
[reported
at
[1986]
2
C.T.C.
274
at
275;
86
D.T.C.
6396
at
6393}:
These
rules
represent
a
considerable
departure
from
a
long-standing
provision
in
the
Income
Tax
Act
and
are
meant
to
dampen
considerably
the
right
of
the
Minister
to
collect
a
tax
until
various
avenues
of
appeal
have
been
exhausted.
However,
the
Minister
still
has
a
way
out,
namely
subsection
225.2(1),
cited
above,
which
allows
him
to
take
immediate
steps
for
recovery
when
it
may
reasonably
be
considered
that
giving
the
taxpayer
time
to
pay
the
amount
assessed
in
respect
of
him
would
jeopardize
recovery
of
the
amount.
In
such
circumstances,
as
Joyal,
J.
again
wrote
in
Peter
S.
Laframboise
(supra),
the
Minister
may
by
order
require
payment
of
the
tax
assessed
forthwith
and
commence
recovery
proceedings
which
he
would
not
otherwise
be
able
to
initiate.
This
is
what
happened
in
the
case
at
bar.
As
I
emphasized
in
one
of
the
extracts
from
the
House
of
Commons
Debates,
the
taxpayer
can
object
to
such
an
exceptional
measure.
I
trust
that
it
will
not
be
held
against
me,
but
I
can
do
no
better
than
again
cite
my
learned
brother
Joyal,
J.
to
explain
the
machinery
of
review
created
by
subsection
225.2(3)
of
the
Act
(at
page
3
[C.T.C.
276;
D.T.C.
6397]):
Pursuant
to
subsection
225.2(3),
he
[the
taxpayer]
may
file
an
application
to
a
Superior
Court
or
Federal
Court
judge
to
have
the
direction
varied
or
vacated.
It
is
a
kind
of
show
cause
hearing
where
the
Minister
has
the
burden
of
justifying
his
direction.
The
judge
may
then
dispose
of
the
application
by
confirming
the
direction,
by
vacating
it
or
varying
it
and
may
make
such
other
order
as
he
considers
appropriate.
In
effect,
a
judge
may
look
at
the
grounds
on
which
the
Minister
has
made
his
direction
and
decide
whether
or
not
they
are
of
a
nature
to
justify
the
exceptional
measure
the
Minister
has
taken.
In
effect,
the
procedure
is
a
check
on
the
Minister’s
authority
which
would
otherwise
be
substantially
unfettered.
Those
are
the
circumstances
of
the
case
at
bar,
and
as
provided
in
subsection
225.2(5)
of
the
Act,
it
is
for
the
Minister
to
justify
his
order.
Minister's
Arguments
In
support
of
her
position
the
respondent
filed
a
number
of
sworn
statements,
including
one
by
Marc
Blanchard,
taxation
director
in
the
St-Hubert
district
office
of
the
Department
of
National
Revenue,
Taxation.
It
is
he
who
signed
the
original
of
the
notice
on
March
1,
1986
containing
the
order
to
the
applicant
to
pay
the
amount
of
the
reassessments
forthwith.
The
reasons
prompting
him
to
act
in
this
manner
are
indicated
in
paragraph
13
of
his
sworn
statement,
which
I
reproduce
forthwith:
13.
I
therefore
considered
on
March
11,
1986
that
it
might
reasonably
be
considered
that
giving
1853
time
to
pay
the
assessment
made
in
respect
of
it
for
1983
and
1984,
in
the
amount
of
$3,096,556.98,
would
jeopardize
the
recovery,
and
I
decided
to
order
payment
forthwith
for
the
following
reasons:
(a)
it
appeared
that
1853
paid
no
attention
to
the
notice
and
warning
from
their
accountants
in
October
1983
regarding
its
tax
situation
for
1983;
(b)
the
accountant
in
fact
said
that
the
money
might
quickly
be
gone
and
we
knew
what
we
had
to
do;
(c)
on
February
14,
1986
the
directors
settled
their
differences;
(d)
on
the
same
day
(February
14,
1986),
despite
a
notice
from
the
accountants
regarding
possible
tax
of
$1,900,000
for
1983
and
1984,
1853
—
sold
debts
totalling
$1,608,000
in
capital
alone,
bearing
interest
at
12%
and
over,
and
due
partly
in
January
1987,
partly
in
February
1988
and
partly
in
February
1993;
—
obtained
the
sum
of
approximately
$1,664,000
for
this
transfer;
—
declared
and
paid
a
dividend
of
some
$4,500,000
to
the
personal
management
companies
of
Messrs.
Gagnon
and
Archambault;
(e)
all
that
remained
in
certificates
of
deposit
was
some
$1,300,000,
due
on
March
24,
1986,
to
cover
the
federal
and
provincial
tax
for
1985
and
1986;
(f)
the
amount
of
the
debt
by
the
Caisse
de
dépôt
et
de
placement
du
Québec
to
1853
was
between
$1
and
6
million;
(g)
the
assets
mentioned
in
paragraph
4(b)
above
(other
than
the
debt
by
the
Caisse
de
dépôt
et
de
placement)
not
already
liquidated
did
not
cover
the
amount
of
the
assessment,
$3,096,556.68,
and
could
easily
be
liquidated
or
discounted.
The
assets
referred
to
in
paragraph
(g)
above
are,
in
addition
to
the
debt
by
the
Caisse
de
dépôt
et
de
placement,
a
promissory
note
for
$1
million
from
the
Crédit
industriel
Desjardins,
bearing
interest
at
12.5
per
cent
and
due
on
January
14,
1987,
Commission
scolaire
Le
Gardeur
bonds
in
the
amount
of
$608,000,
bearing
interest
at
12
per
cent
and
12.5
per
cent
and
due
partly
in
February
1988
and
partly
in
February
1993,
except
that
this
note
and
these
bonds
were
transferred
to
Lévesque
Beaubien
Inc.
on
February
14,
1986
for
approximately
$1,664,000.
Finally,
the
applicant
was
still
owed
a
second
mortgage
debt
amounting
to
$813,000.
Those
grosso
modo
are
the
facts
and
reasons
why
the
taxation
director
thought
the
disputed
order
should
be
made.
Applicant's
Arguments
In
its
application
for
review,
the
applicant
alleged
that
the
Minister
lacked
sufficient
grounds
for
considering
that
granting
the
applicant
the
time
specified
in
the
Act
(225.1)
to
pay
the
amount
of
the
assessments
would
jeopardize
recovery
of
the
tax.
The
applicant’s
argument
was
based
on
a
number
of
sworn
statements
both
by
directors
of
the
applicant
company
and
by
lawyers
and
accounting
experts
hired
by
it.
The
following
is
a
summary
of
what
may
be
gleaned
from
these
statements:
(1)
the
Minister
did
not
take
into
account
the
fact
that
the
applicant
paid
a
dividend
of
$4.5
million
only
after
having
previously
set
aside
$1.3
million
for
its
1986
taxes;
(2)
the
Minister
did
not
take
into
account
a
balance
of
sale
of
some
$7
million
owed
to
the
applicant
by
the
Caisse
de
dépôt
et
de
placement,
and
that
this
balance
returned
the
applicant
$60,000
a
month
in
the
form
of
interest;
(3)
the
Minister
did
not
take
into
account
a
tax
credit
of
some
$1
million
payable
to
the
applicant
in
1987;
(4)
the
Minister
did
not
take
into
account
another
balance
of
sale
of
$700,000
owed
to
the
applicant
by
Alfid
Services
Immobiliers;
and
(5)
the
Minister
did
not
take
into
account
the
value
of
the
shares
held
by
the
applicant
in
its
subsidiaries
Place
Mont-Royal
Inc.
and
Bupo
Inc.
Applicable
Law
Since
these
new
provisions
received
royal
assent,
on
October
29,
1985,
this
is
the
third
application
of
this
kind
submitted
to
the
Federal
Court.
The
first
was
Peter
S.
Laframboise
(supra)
and
the
second,
just
recently,
was
Bonnie
Ellen
Danielson
v.
Deputy
Attorney
General
of
Canada
et
al.,
an
unreported
decision
having
No.
T-1139-86
and
handed
down
by
McNair,
J.
on
September
5,
1986
[reported
at
[1986]
2
C.T.C.
380;
86
D.T.C.
6518].
In
the
latter
case,
my
learned
brother
made
the
following
observations
at
page
3
(C.T.C.
381;
D.T.C.
6518):
In
my
judgment,
the
issue
goes
to
the
matter
of
collection
jeopardy
by
reason
of
the
delay
normally
attributable
to
the
appeal
process.
The
wording
of
subsection
[225.2(1)]
would
seem
to
indicate
that
it
is
necessary
to
show
that
because
of
the
passage
of
time
involved
in
an
appeal
the
taxpayer
would
become
less
able
to
pay
the
amount
assessed.
In
my
opinion,
the
fact
that
the
taxpayer
was
unable
to
pay
the
amount
assessed
at
the
time
of
the
direction
would
not,
by
itself,
be
conclusive
or
determinative.
Moreover,
the
mere
suspicion
or
concern
that
delay
may
jeopardize
collection
would
not
be
sufficient
per
se.
The
test
of
“whether
it
may
reasonably
be
considered''
is
susceptible
of
being
reasonably
translated
into
the
test
of
whether
the
evidence
on
balance
of
probability
is
sufficient
to
lead
to
the
conclusion
that
it
is
more
likely
than
not
that
collection
would
be
jeopardized
by
delay.
[My
emphasis.]
I
agree
with
McNair,
J.
when
he
says
that
the
Minister
can
require
payment
of
the
assessment
forthwith
if
a
taxpayer
may
not
be
in
a
position
to
pay
simply
because
of
the
passage
of
time
allowed
by
the
Act.
The
amount
of
money
involved
is
not
significant:
what
the
Minister
has
to
know
is
whether
the
taxpayer’s
assets
can
be
liquidated
in
the
meantime
or
be
seized
by
other
creditors
and
so
not
available
to
him.
Similarly,
I
agree
entirely
with
Joyal,
J.
when
he
says
in
Peter
S.
Lafram-
boise
(supra)
that
the
word
"may”
and
the
phrase
“reasonably
be
considered"
read
together
give
the
Minister
great
latitude.
In
my
opinion,
this
latitude
allows
the
Minister
to
rely
on
the
exceptional
provisions
contained
in
subsection
225.2(1)
whenever,
on
a
balance
of
probability,
the
time
allowed
the
taxpayer
by
subsection
225.1(1)
would
jeopardize
his
debt.
I
emphasize
on
a
balance
of
probability,
not
beyond
all
reasonable
doubt.
In
this
I
concur
with
the
remarks
of
McNair,
J.
reproduced
above.
I
would
say
in
passing
here
that
I
agree
with
counsel
for
the
respondent
when
he
told
the
Court
that
the
immediate
payment
order
under
subsection
225.2(1)
is
not
equivalent
to
a
seizure
before
judgment
as
provided
in
Articles
733
et
seq.
of
the
Quebec
code
of
Civil
Procedure.
In
St.
Lawrence
Mechanical
Contractor
Ltd.
v.
Acadian
Consulting
Co.
Ltd.
et
al,
[1974]
C.A.
236,
Dubé,
J.A.
of
the
Quebec
Court
of
Appeal
made
the
following
observation,
at
237:
.
.
.
the
suing
creditor
must
adduce
on
oath
facts
establishing
that
the
debtor
is
trying
to
remove
or
conceal
his
possessions
so
as
to
prevent
his
creditor
realizing
the
debt;
refusing
to
pay
or
delaying
payment
is
a
ground
which
justifies
the
creditor
in
ringing
a
court
action
against
his
debtor,
but
is
not
automatically
reason
to
fear
that
unless
there
is
a
seizure
before
judgment
the
debt
will
be
jeopardized.
Seizure
before
judgment
is
undoubtedly
an
extraordinary
form
of
relief
which
can
only
be
granted
for
extraordinary
reasons:
in
practice
in
order
to
be
entitled
to
it
a
party
must
allege
fraud
or
grounds
amounting
to
fraud
against
the
defaulting
debtor.
Clearly
the
burden
placed
on
the
Minister
in
the
case
at
bar
is
well
within
that
placed
on
a
seizing
creditor
under
Article
733
of
the
Code
of
Civil
Procedure.
The
Minister
may
certainly
act
not
only
in
cases
of
fraud
or
situations
amounting
to
fraud,
but
also
in
cases
where
the
taxpayer
may
waste,
liquidate
or
otherwise
transfer
his
property
to
escape
the
tax
authorities:
in
short,
to
meet
any
situation
in
which
a
taxpayer's
assets
may
vanish
into
thin
air
because
of
the
passage
of
time.
Accordingly,
I
think
it
is
now
for
me
to
decide
whether
in
the
case
at
bar
the
Minister
had
reasonable
grounds
for
believing
that
the
taxpayer
would
waste,
liquidate
or
otherwise
transfer
its
assets,
so
jeopardizing
the
Minister’s
debt.
Ratio
Decidendi
After
hearing
the
parties
and
taking
their
arguments
into
consideration,
I
have
come
to
the
conclusion
that
the
respondent
was
not
justified
in
requiring
payment
of
the
assessments
forthwith.
There
is
nothing
to
show
that
the
applicant
was
trying
to
avoid
its
tax
obligations.
In
concluding
as
I
have
done,
I
have
given
the
greatest
weight
to
the
following
points.
(1)
Regarding
balance
of
sale
owed
by
Caisse
de
dépôt
et
de
placement
du
Québec
It
was
established
that,
though
part
of
the
debts
of
the
Caisse
to
the
applicant
are
currently
the
subject
of
court
actions,
the
remainder
of
the
debt
is
not
disputed
and
for
the
applicant,
under
the
very
wording
of
the
transaction,
constitutes
an
account
receivable
(and
so
an
asset)
valued
at
approximately
$3.5
million.
It
should
further
be
noted
that,
at
the
time
of
the
seizure
on
March
11,
1986,
the
Caisse
was
paying
$50,000
a
month
interest.
The
respondent
subsequently
consented
to
a
release
of
the
seizure
and
the
monthly
payments
of
the
Caisse
to
the
applicant
have
resumed,
as
indicated
in
a
letter
of
April
3,
1986
from
the
taxation
director,
Marc
Blanchard,
filed
as
Exhibit
A
of
the
sworn
statement
by
Bernard
Reis,
counsel
for
the
applicant.
(2)
Regarding
payment
of
a
dividend
of
$4.5
million
to
shareholders
of
applicant
The
evidence
showed
that
the
applicant
had
never
previously
paid
any
dividends
and
that
it
was
agreed
to
pay
such
a
dividend
as
the
result
of
settlement
of
a
dispute
between
the
two
sole
shareholder-directors
of
the
applicant.
This
dividend
was
originally
to
be
some
$5.5
million;
but
after
consulting
with
the
applicant’s
auditors,
the
directors
thought
it
better
to
reduce
this
amount
to
$4.5
million
and
to
keep
a
reserve
of
$1.3
million
cash
to
pay
taxes.
Though
this
dividend
payment
was
made
on
February
14,
1986,
a
month
before
the
immediate
payment
order
by
the
Minister,
the
latter
was
not
able
to
show
that
the
payment
was
in
fact
made
to
waste,
liquidate
or
otherwise
transfer
part
of
the
applicant’s
assets
so
as
to
keep
them
from
the
Revenue
Department.
There
is
nothing
unusual
in
this,
especially
when
we
take
into
account
the
value
of
the
applicant’s
assets,
including
its
accounts
receivable,
and
the
fact
that
fundamentally
it
had
only
one
creditor,
the
federal
Revenue
Department.
(3)
Regarding
accountant’s
statement
that
applicant's
money
might
quickly
be
gone
and
Department
knew
what
it
had
to
do
At
a
meeting
between
the
applicant's
accountants
and
the
Department's
investigators,
one
of
the
accountants
allegedly
said
the
following:
1853
has
money
in
the
bank
now
but
it
might
quickly
be
gone.
So
you
[the
Department]
know
what
you
have
to
do.
These
remarks
were
passed
on
by
the
investigator
Ronald
Davis
to
the
taxation
director,
Marc
Blanchard.
He
made
them
one
of
the
reasons
for
issuing
the
payment
order
(see
paragraph
13(b)
of
his
sworn
statement).
However,
what
the
evidence
showed
was
that
this
statement
was
never
really
taken
seriously
by
the
investigators
or
by
Mr.
Blanchard
himself.
When
questioned
by
counsel
for
the
applicant,
Mr.
Blanchard
admitted
that
his
decision
to
issue
the
immediate
payment
order
was
not
specifically
based
on
this
statement
by
the
accountant,
it
was
simply
“information”
which
he
had
(see
page
12
of
his
examination
on
affidavit).
Similarly,
the
investigator
Ronald
Davis,
when
examined
on
his
affidavit,
took
pains
to
minimize
the
importance
of
the
accountant's
statements.
I
refer
the
parties
to
page
13
of
his
examination,
where
he
replied
that
he
did
not
necessarily
conclude
from
the
statement
that
people
were
going
to
make
off
with
the
money.
It
was
a
comment,
he
added,
and
he
did
not
conclude
that
immediate
steps
would
have
to
be
taken
to
recover
the
amount
of
the
assessment.
(4)
Regarding
interest
of
one
of
applicant's
directors
in
company
located
in
West
Indies
The
evidence
established
that
the
taxation
director's
fears
regarding
the
possible
transfer
of
the
applicant’s
assets
to
the
Turks
and
Caicos
Islands,
the
location
of
the
company
in
which
one
of
the
applicant’s
directors
had
an
interest,
were
without
foundation.
The
director
in
question
had
ceased
to
be
a
shareholder
of
the
West
Indian
company
since
November
1,
1984
(see
affidavit
by
Maurice
E.
Archambault
dated
April
25,
1986).
The
four
points
which
I
have
just
listed
and
discussed
will
be
amply
sufficient
to
justify
my
decision.
For
greater
certainty,
however,
I
would
add
that
the
evidence
presented
on
other
points,
though
in
my
opinon
not
as
important,
still
is
worth
taking
into
account.
I
refer
to
the
fact
that
the
applicant
holds
a
maritime
lien
in
the
amount
of
$300,000,
owns
100
per
cent
of
the
capital
stock
in
Place
Mont-Royal
Inc.,
which
itself
owns
two
pieces
of
land
valued
at
approximately
$700,000,
also
owns
all
the
shares
in
another
company,
Bupo
Inc.,
which
has
a
mortgage
on
property
valued
at
$300,000,
and
finally
it
is
owed
a
further
balance
of
sale
amounting
to
about
$700,000
by
Alfid
Services
Immobiliers.
As
if
that
were
not
enough,
there
is
the
undertaking
by
one
of
the
applicant's
directors,
Maurice
E.
Archambault,
who
in
his
sworn
statement
on
April
9,
1986
promised
to
block
a
withdrawal
of
funds
by
shareholders
or
persons
connected
with
them
as
long
as
the
tax
assessments
involved
in
the
Minister
of
National
Revenue’s
order
remained
unpaid.
In
any
case,
if
the
applicant’s
actions
do
not
comply
with
the
undertaking
given
by
one
of
its
directors
on
its
behalf,
the
Minister
can
always
apply
the
provisions
of
subsection
225.2(1)
and
again
require
payment
of
the
assessments
forthwith.
Finally,
it
was
established
that
the
seizures
in
the
case
at
bar
have
had
the
effect
of
paralyzing
the
applicant’s
activities
and,
indirectly,
those
of
some
of
its
subsidiaries.
In
short,
the
question
is
whether
the
respondent's
debt
is
likely
to
be
more
jeopardized
by
the
applicant's
paralysis
than
by
the
passage
of
time
allowed
the
taxpayer
under
subsection
225.1(1).
In
view
of
what
I
have
just
said,
the
question
provides
its
own
answer.
The
Minister's
order
is
accordingly
set
aside
and,
pursuant
to
the
provisions
of
subsection
225.2(8),
no
costs
will
be
awarded.
Needless
to
say,
the
seizures
by
garnishment
made
in
the
case
at
bar
are
also
vacated.
Application
granted.
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