Stephens v. The Queen, 85 DTC 5359, [1985] 2 CTC 149 (FCTD)

Reed, J:—This is a motion by the applicant for an order pursuant to Rules 2100 and 1909:

(a) staying certain writs of execution pursuant to Rule 2100 on the ground that there are special circumstances rendering it inexpedient to enforce the judgment or order giving rise thereto;

(b) staying execution of the judgment or order, giving rise to the writs of execution, pursuant to Rule 1909;

(c) permitting the payment out of court of moneys paid into court on November 15, 1983;

(d) finding that the certificate of judgment obtained in this action and any proceedings thereunder, and sections 222-224 inclusive of the Income Tax Act are inoperable or void as being contrary to the Canadian Charter of Rights and Freedoms.

The original motion in this case, pursuant to rule 2100 was first filed November 3, 1983. The supporting affidavits alleged that the applicant was impecunious and in ill health. The hearing of this motion on November 7, 1983 gave rise to an order of the Associate Chief Justice temporarily lifting writs of executions on the applicant's $220,000 residential property to allow it to be sold and providing that the proceeds be paid into court.

A motion pursuant to Rules 2100 and 1909 was refiled by the applicant on January 3, 1984, again alleging the impecuniosity and ill health of the applicant. The same affidavit material as that filed in support of the November 3, 1983 motion was relied upon. This second motion was set down for hearing on January 10, 1984. It was scheduled to be heard at the same time as the main issue in this action, the validity of certain tax assessment notices.* [1] The validity of the assessment notices was scheduled to be determined pursuant to a Rule 474 procedure. When the Rule 474 motion was heard on January 10, 1985, the Rule 2100 and 1909 motion was withdrawn. Only the validity of the assessment notices was addressed.

On February 23, 1984 the solicitor for the applicant again refiled the Rule 2100 and Rule 1909 motion, and for the first time included therein the Charter of Rights issue set out in paragraph (d) above. The motion lay dormant, it would seem, until April 30, 1985 when it was sought to have the matter brought on for a hearing. That initiative resulted in a hearing on June 12, 1985.

One issue can be disposed of quickly, and that is the argument that special circumstances exist rendering it inexpedient to enforce the judgment and writs of execution, on the ground that the applicant is impecunious and in ill health. If these are indeed grounds on which such order might be made, and I make no decision in that regard, there is simply not adequate evidence that the applicant is either impecunious or in ill health. The affi- davits allegedly attesting to these facts do little more than recount the content of letters received from the applicant. The truth of the contents of those letters is not attested to. The physician’s letter does no more than describe minor physical ailments which many people of the applicant’s age are likely to suffer. Indeed, I have wondered whether or not this issue is res judicata as a result of the Associate Chief Justice's order of November 7, 1983. Counsel have not treated it as such, but the affidavits which are being relied upon for the assertions of impecuniosity and ill health are the same as were before the Associate Chief Justice on that date, when he obviously declined to make the Rule 2100 order sought. In any event, whether the issue on the basis of facts asserted in those affidavits is res judicata or not, the affidavits do not constitute sufficient evidence of special circumstances to justify an order under Rule 2100, or under Rule 1909.* [2]

The second issue which can be disposed of quickly is counsel for the applicant's claim that I have authority pursuant to the order of the Associate Chief Justice of November 7, 1983 to permit payment out of court of the moneys paid in. I do not so read the Associate Chief Justice’s order. It gave the judge hearing the Rule 474 issue of law set down for January 10, 1984, authority to deal with the moneys which had been paid in. That is, the Associate Chief Justice's order contemplated that the payment out of court of the moneys would be dealt with by the trial judge who determined the validity of the tax assessment notices. The order did not contemplate any rehearing of the Rule 2100 motion. I heard the Rule 474 motion and decided against the applicant (decision dated January 27, 1984). Accordingly, no order for payment of the moneys out of court was made. This is not to say that there may not be authority elsewhere to give counsel for the applicant the remedy he seeks, but not flowing from the Associate Chief Justice's order of November 7, 1983.

That leaves the Charter of Rights issue raised by solicitor for the applicant in paragraph (d) of the motion above. Counsel for the respondent raised a preliminary objection to the applicant raising this issue. He argued that it was inappropriate to address a Charter of Rights issue in the context of what is really a motion brought pursuant to Rules 2100 and 1909, and that in any event he had not had sufficient notice that this issue was to be raised. At the same time he did not wish an adjournment, but it was agreed that should I find any merit in the applicant’s Charter argument the issue would be reopened for further evidence and argument by both parties. (Evidence particularly addressed to the criteria of reasonable limitations demonstrably justifiable in a free and democratic society society as provided for in section 1 of the Canadian Charter of Rights and Freedoms.)

I am not prepared to find that it is inappropriate to raise a Charter issue in the context of motions brought pursuant to Rules 2100 and 1909. There may be cases where the validity of a writ, or judgment is so patent that this would be an appropriate procedure. If for example, the Supreme Court had recently held writs and judgments identical to those in this case, invalid, then it might very well be that it would be appropriate to proceed as counsel for the applicant has done.

I do not, however, find any merit in the applicant’s Charter argument in this case. The original writs of execution were issued on April 25, 1979 pursuant to a judgment of the Federal Court of the same date. This judgment was issued pursuant to sections 222-224 of the Income Tax Act, RSC 1952, c 148, as amended. The original certificate of judgment was filed at the same time that a letter was sent to the applicant advising him that the Minister was of the opinion that he was attempting to avoid taxes and ordering the payment thereof forthwith under subsection 158(2) of the Income Tax Act. It is to be noted that this was all done prior to the coming into force of the Canadian Charter of Rights and Freedoms on April 17, 1982. Sections 222- 224 of the Income Tax Act at the time, were clearly valid they could not have been challenged on Charter grounds. The judgments issued pursuant thereto could not have been challenged on Charter grounds. The writs of execution and the actions of the sheriff in April 1979, were all taken long before the Charter came into effect.

As noted above, the writs were temporarily lifted on November 15, 1983 pursuant to an order of the Associate Chief Justice on November 7, 1983, to allow for the sale of the applicant’s residential property, and the payment of the proceeds thereof into court. As I understand counsel’s argument it is that the refiling of the writs at that time was invalid because this constituted an invalid seizure. Presumably it is also argued that the payment into court of the proceeds of the sale, pursuant to the order of the Associate Chief Justice, was also an invalid seizure. It is argued that the refiling (and presumably the enforced payment into Court) offend section 8 of the Charter of Rights :

Everyone has the right to be secure against unreasonable search or seizure.

Counsel for the applicant cited MNR et al v Kruger Inc et al, [1984] CTC 506; 84 DTC 6478 (FCA); Hunter et al v Southam Inc, 84 DTC 6467 (SCC); and The Queen v Dorothy Dzagic, [1985] 1 CTC 346; 85 DTC 5252 (OHCJ) as support for his proposition. In the Kruger case the Federal Court of Appeal held that subsection 231(4) of the Income Tax Act was invalid because it authorized searches and seizures of anything that might afford evidence of a violation of any provision of the Income Tax Act even though, at the time the authorization to search issued, there might only be reasonable grounds to believe that a violation of one provision of the Act had occurred. The Court held subsection 231(4), because of its broad scope, offended section 8 of the Charter and the seizure of documents pursuant to an authorization issued on July 8, 1983 was invalid. No part of the invalid transaction took place before the Charter was in effect.

In the Southam case the Supreme Court held subsections 10(1) and (3) of the Combines Investigation Act RSC 1970, c C-23 invalid because they authorized seizures on the “belief” that an offence had been committed. The court held that section 8 of the Charter required as a minimum standard that there be “reasonable and probable grounds” for believing an offence had been committed before a search or seizure could be authorized. At the same time it was held that the authorization for the search had to be given by an independent arbiter and not by a member of the Restrictive Trade Practices Commission. In the Southam case the purported authorization for the seizure had been given on April 16, 1982 (the day before the Charter came into effect). The search and seizure itself took place April 20, 1982 (after the Charter came into effect).

In the Dzagic case the Ontario High Court held paragraph 231(1)(d) of the Income Tax Act invalid on the basis of the reasoning found in the Kruger and Southam cases (supra) but held that this did not preclude copies of documents seized, before the Charter came into effect, pursuant to that section being used in evidence at a subsequent trial of the offence charged. The issue raised in Dzagic was the use of the documents in subsequent proceedings: it did not directly raise the validity of a continued detention of goods seized. The court however, did address this issue in its reasons:

The Charter does not apply retrospectively to render unreasonable a search that was not unreasonable or unlawful when it took place. The effect of now ordering the return of what was seized would be to declare as unreasonable what in fact at the material time was reasonable.

Thus, none of the cases cited by counsel for the applicant support his contention that the Charter has the retroactive effect claimed. At the same time, I am aware that one decision seems to have held that section 8 has a limited retroactive effect: Blackwoods Beverages Ltd et al v The Queen et al (1984), 47 CPC 294 (Man CA). In my view, however, there is no doubt that the better interpretation is that quoted above in the Dzagic case and that expressed by Mr Justice Dubé, of this Court in Pattison Industries Ltd v The Queen, (decision dated January 11, 1985, Court file T-2644-84):

. . . plaintiffs insist that they are not attacking the seizure of the documents but their “retention” and “use”. Yet, the Charter is silent as to the retention and use of property. In fact, property rights as such are not protected by the Charter. There are no words in section 8 of the Charter that would protect the right of a Canadian citizen to be secure against unreasonable “retention” or “use”. The plain meaning of the word “seizure” is the forcible taking possession. “Retention” is something else. “Use” is something else again. The distinction is quite clear in the Criminal Code of Canada: for instance, something may be “seized” under section 445 and “detained” under section 446.

Section 8 cannot be applied retroactively so as to render invalid a preCharter search and seizure and it cannot be interpreted so as to compel the return of goods seized thereunder.* [3]

What then of counsel for the applicant's argument that the November 7, 1983 order of this court providing for the payment of money into court and the refiling of the writs is a post-Charter "seizure".

I do not accept this contention: for several reasons. The November 7, 1983 Court order has its foundation in the April 1979 judgment and the writs of execution issued at that time. It takes its validity from that foundation. There is nothing new in the November 1983 situation except accommodation to the applicant’s request that the writs be temporarily lifted to allow for the sale of the property. The November 7, 1983 order and the actions taken pursuant thereto cannot be classified as new "seizure" so as to become subject to section 8 of the Charter.

Secondly, it is not at all clear to me that the refiling of writs of execution or the payment of money into court pursuant to a court order are "seizures" as that term is used in section 8 of the Charter. In Montreal Lithographing Limited v Deputy Minister of National Revenue for Customs and Excise (judgment dated January 6, 1984, Court file No T-2838-83) Mr Justice Cattanach held that section 8 of the Charter could not apply to section 102 of the Customs Act (which allows for the withholding of the release of wares for alleged failure to pay customs duties). He held the relevant provision provided for a lien not a seizure. A similar result was reached in Re Workers' Compensation Board of Nova Scotia and Coastal Rentals, Sales and Service Ltd et al (1983), 12 DLR (4th) 564 (NSSC). As of November 7, 1983 the writs of execution outstanding against the applicant's property could be seen as no more than liens against the property. I note also that Francois Chevrette in Canadian Charter of Rights and Freedoms: Commentary (ed W J Tarnopolsky and G A Beaudoin, 1982) at 298 expresses the view that section 8 affords security against confiscations only within the framework of an investigation or criminal conviction and was not intended to carry a broader meaning.

I do not need to decide on the exact scope of the term "seizure", however, because in my view the overriding consideration which renders the applicant’s argument totally without merit is the fact that the November 7, 1983 order of the Associate Chief Justice ordering payment into court and providing for the refiling of the writs of execution, was granted at the request of and with the consent of the applicant. It was a consent order. It seems to me it is simply not now open to the applicant to come to the court and contest the validity of those orders and the actions taken thereunder on Charter grounds.

An order will issue dismissing the applicant's motion.

Motion dismissed.