Martin,
J.:—This
is
a
case
stated
for
the
opinion
of
the
Court
on
the
effectiveness
of
''Third
Party
Demand
for
Payment"
and
a
"Demand
for
Tax
on
Assigned
Accounts"
issued
pursuant
to
subsections
(6)
and
(10)
of
section
52
of
the
Excise
Tax
Act,
R.S.C.
1970,
c.
E-13.
Originally
there
were
two
questions
but
at
the
beginning
of
the
hearing
counsel
informed
me
they
had
reached
agreement
that
the
"Third
Party
Demand
for
Payment"
issued
by
the
defendant
on
September
12,1983
under
subsection
52(6)
did
not
give
the
defendant
priority
over
the
plaintiff's
claims
to
the
accounts
receivable
which
it
had
seized
and
retained
on
September
9,
1983.
Because
counsel
reached
agreement
on
the
answer
to
the
first
question
no
argument
was
given
and
I
was
informed
that
I
need
only
concern
myself
with
the
second
question.
As
already
indicated
the
second
question
concerns
the
effectiveness
of
a
demand
for
tax
on
assigned
accounts
issued
on
September
12,1983
by
the
defendant
to
the
plaintiff
in
respect
of
accounts
receivable
which
had
been
assigned
by
Olympic
Rubber
Products
Ltd
(Olympic)
to
the
plaintiff
in
1981
and
again
in
1983.
Olympic
was
an
Ontario
producer
and
seller
of
Canadian
goods
to
which
paragraph
27(1)(a)
of
the
Excise
Tax
Act
applied.
In
this
respect
Olympic,
at
some
time
prior
to
September
12,
1983,
had
sold
goods,
the
federal
sales
tax
on
which
amounted
to
at
least
$11,210.65,
for
which
it
had
not,
by
September
12,1983,
received
either
the
sale
price
or
the
tax
imposed
on
the
transaction.
Earlier,
in
May
of
1983,
Olympic
owed
substantial
sums
of
money
to
the
plaintiff
and,
among
other
documents,
executed
a
general
assignment
of
book
debts
in
favour
of
the
plaintiff,
notice
of
which
was
duly
registered
by
a
Financing
Statement
filed
under
the
Personal
Property
Security
Act,
R.S.O.
1980,
c.
375
at
the
Branch
Registry
Office
at
London,
Ontario,
on
May
17,
1983.
On
September
9,
1983,
when
Olympic
owed
the
plaintiff
$323,863.07
and
was
in
default
of
its
obligations
to
the
plaintiff,
the
plaintiff
served
on
Olympic
notice
of
its
intention
to
seize
and
retain
Olympic's
undertaking,
including
its
accounts
receivable.
Pursuant
to
its
notice
of
intention
the
plaintiff's
agents
physically
seized
Olympic's
undertaking
on
September
9,
1983
by
entering
on
Olympic's
business
premises,
evicting
the
agents
of
Olympic
from
the
premises,
changing
the
locks
and
securing
all
of
the
chattels
and
records
of
Olympic
on
the
premises.
At
the
time
of
the
seizure,
on
September
9,
1983,
agents
of
the
defendant
were
on
Olympic’s
premises
for
the
purposes
of
conducting
an
audit.
They
were
informed
by
agents
of
the
plaintiff
that
the
seizure
was
being
effected
in
accordance
with
the
security
documentation
which
the
plaintiff
had
taken
earlier
that
year
from
Olympic.
At
the
time
of
the
seizure
on
September
9,
1983
three
documents
were
completed
and
duly
served
or
mailed
by
the
plaintiff.
The
first
was
the
notice
of
the
plaintiff's
intention
to
seize
and
retain
Olympic's
undertaking
and
also
contained
Olympic's
acknowledgment
of
its
default
and
its
consent
to
the
seizure
and
retention
in
the
following
form:
NOTICE
AND
ACKNOWLEDGMENT
TO:
OLYMPIC
RUBBER
PRODUCTS
LTD.
AND
TO:
WILLIAM
MURCHIE,
EDWARD
KING
and
JAMES
PASSMORE
Dear
Sirs:
You
are
hereby
notified
that
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
("Thames")
as
holders
of
the
securities
described
in
Schedule
"A"
hereto
including
those
granted
pursuant
to
a
Loan
Agreement
dated
May
16th,
1983
("Securities"),
given
by
Olympic
Rubber
Products
Ltd.
("Olympic"),
by
reason
of
the
several
defaults
of
Olympic
in
the
performance
of
its
obligations
under
the
Securities
and
with
respect
to
its
indebtedness
to
Thames
as
secured
thereby,
are
proceeding
immediately
to
take
all
necessary
action
to
seize,
protect,
realize
upon
and
retain
all
of
the
undertaking,
property
and
assets
of
Olympic
and
all
the
shareholdings
of
William
Murchie,
Edward
King
and
James
Passmore
in
Olympic,
all
for
the
benefit
of
Thames.
DATED
at
London,
Ontario
this
9th
day
of
September,
1983.
THAMES
BANDAG
AND
TIRE
LIMITED
per
C/S
President
THAMES
TIRE
&
AUTO
CENTRE
(LONDON)
INC.
per
C/S
President
OLYMPIC
RUBBER
PRODUCTS
LTD.
hereby
acknowledges
its
default
under
the
securities
described
in
Schedule
"A"
hereto
and
consents
to
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
seizing,
protecting,
realizing
upon
and
retaining
all
of
its
undertaking,
property
and
assets.
DATED
AT
London,
Ontario,
this
9th
day
of
September,
1983.
OLYMPIC
RUBBER
PRODUCTS
LTD.
per
President
C/S
per
Vice-President
WILLIAM
MURCHIE,
EDWARD
KING
and
JAMES
PASSMORE
hereby
each
acknowledge
default
has
been
made
under
the
Securities
described
in
Schedule
"A"
hereto
and
consents
to
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
seizing,
protecting,
realizing
upon
and
retaining
all
of
the
shareholdings
held
by
each
of
them
in
Olympic.
DATED
this
9th
day
of
September,
1983.
William
Murchie
Edward
King
James
Passmore
|
SCHEDULE
“A”
|
|
|
DESCRIPTION
OF
SECURITY
|
DATE
|
|
Security
Agreement
|
October
15,
1981
|
|
General
Assignment
of
Book
Debts
|
May
16th,
1983
|
|
Demand
Debenture
|
May
16th,
1983
|
|
Pledge
Agreement
|
May
16th,
1983
|
|
General
Security
Agreement
|
May
16th,
1983
|
|
Assignment
of
Securities
|
May
16th,
1983
|
The
second
document
was
the
notice
by
the
plaintiff
to
Olympic
of
its
right
to
redeem
its
undertaking
by
the
payment
of
$333,863.07
by
September
26,
1983
and
Olympic's
waiver
of
its
right
to
the
15-day
notice
in
the
following
form:
NOTICE
AND
WAIVER
TO:
OLYMPIC
RUBBER
PRODUCTS
LTD.
1220
Balmoral
Road
Cambridge,
Ontario
AND
TO:
ROYAL
BANK
OF
CANADA
AND
TO:
WILLIAM
MURCHIE,
EDWARD
KING
and
JAMES
PASSMORE
TAKE
NOTICE
that
default
has
been
made
under
a
Loan
Agreement
dated
May
16th,
1983
and
under
the
securities
(“Securities”)
described
in
Schedule
"A"
hereto
annexed,
granted
by
Olympic
Rubber
Products
Ltd.
(“Olympic”)
of
1220
Balmoral
Road,
Cambridge,
Ontario,
to
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
("Thames")
having
their
principal
places
of
business
at
563
Clarke
Road,
London,
Ontario.
The
Securities
cover
all
the
undertaking,
property
and
assets
of
Olympic
and
all
the
shareholdings
of
William
Murchie,
Edward
King
and
James
Passmore
in
Olympic,
("Collateral").
The
amount
required
to
satisfy
the
claims
of
Thames
is
made
up
as
follows:
Principal
and
interest
to
and
including
September
9,
1983
$323,863.07
Estimated
Expenses
of
seizing,
protecting,
realizing
upon
and
retaining
the
Collateral
10,000.00
TOTAL
$333,863.07
Thames
also
claims
interest
at
the
Prime
Rate
as
defined
in
the
Loan
Agreement
plus
One
Percent
(1%)
per
annum
from
the
9th
day
of
September,
1983
until
the
date
of
payment
hereunder.
We
hereby
give
you
notice
that
you
may
redeem
the
Securities
of
Thames
upon
paying
the
total
sum
of
$333,863.07
referred
to
above
plus
interest
on
or
before
the
26th
day
of
September,
1983.
Please
be
advised
that
if
the
total
amount
mentioned
above
plus
interest
is
not
paid
to
Thames
on
or
before
the
26th
day
of
September,
1983,
Thames
will
retain
the
Collateral.
This
notice
is
given
to
you
as
you
appear
to
have
an
interest
in
the
Collateral.
DATED
at
London,
Ontario
this
9th
day
of
September,
1983.
THAMES
BANDAG
AND
TIRE
LIMITED
per
C/S
President
THAMES
TIRE
&
AUTO
CENTRE
(LONDON)
INC.
per
C/S
The
address
of
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
is
563
Clarke
Road,
London,
Ontario.
OLYMPIC
RUBBER
PRODUCTS
LTD.
hereby
acknowledges
its
inability
to
redeem
the
Collateral
described
above
in
accordance
with
the
provisions
of
the
Personal
Property
Security
Act
and
further
waives
its
rights
to
the
15
day
notice
in
accordance
with
the
provisions
of
the
said
Act
and
further
authorizes
and
directs
Thames
to
retain
the
Collateral
forthwith.
DATED
at
London,
Ontario
this
9th
day
of
September,
1983.
OLYMPIC
RUBBER
PRODUCTS
LTD.
per
President
C/S
per
Vice-President
ROYAL
BANK
OF
CANADA,
WILLIAM
MURCHIE,
EDWARD
KING
and
JAMES
PASSMORE
acknowledge
that
they
have
no
intention
to
redeem
the
Collateral
in
accordance
with
the
provisions
of
the
Personal
Property
Security
Act
and
therefore
waive
their
rights
to
the
15
day
notice
in
accordance
with
the
provisions
of
the
said
Act.
DATED
at
London,
Ontario
this
9th
day
of
September,
1983.
ROYAL
BANK
OF
CANADA
per
D.R.
McLennan
per
D.J.
Lee
William
Murchie
Edward
King
James
Passmore
|
SCHEDULE
“A”
|
|
|
DESCRIPTION
OF
SECURITY
|
DATE
|
|
Security
Agreement
|
October
15,
1981
|
|
General
Assignment
of
Book
Debts
|
May
16th,
1983
|
|
Demand
Debenture
|
May
16th,
1983
|
|
Pledge
Agreement
|
May
16th,
1983
|
|
General
Security
Agreement
|
May
16th,
1983
|
|
Assignment
of
Securities
|
May
16th,
1983
|
The
third
form
was
the
notice
which
the
plaintiff
mailed
to
Olympic's
debtors
requiring
any
amount
due
to
Olympic
to
be
paid
directly
to
the
plaintiff
as
follows:
September
9th,
1983
Re:
Olympic
Rubber
Products
Ltd.
Dear
Sirs:
On
Thursday,
September
8th,
1983,
the
Royal
Bank
of
Canada,
Commercial
Banking
Centre,
383
Richmond
Street,
London,
Ontario
(679-7850),
pursuant
to
the
terms
of
a
Security
Agreement
and
promissory
note,
demanded
repayment
of
its
outstanding
indebtedness.
As
a
result
of
the
demand
by
the
Royal
Bank
Thames
Bandag
and
Tire
Limited
and
Thames
Tire
&
Auto
Centre
(London)
Inc.
("Thames")
of
563
Clarke
Road,
London,
Ontario,
pursuant
to
the
terms
of
a
Loan
Agreement
dated
May
16th,
1983,
and
as
holders
of
securities
given
by
Olympic
Rubber
Products
Ltd.
(“Olympic”)
to
Thames,
and
as
a
result
the
demand
of
the
Royal
Bank
had
constituted
default
by
Olympic
in
the
performance
of
its
obligations
under
the
said
Loan
Agreement
and
Securities
and
with
respect
to
Olympic's
indebtedness
to
Thames
as
secured
thereby,
are
entitled
to
direct
payment
of
all
debts,
demands
and
accounts
receivable,
which
are
now
due,
owing
or
accruing
due
or
which
may
hereafter
become
due,
owing
or
accruing
due
to
Olympic
and
hereby
notified
you
accordingly.
Pursuant
to
the
provisions
of
the
Personal
Property
Security
Act
you
are
required
to
make
all
further
payments
in
satisfaction
of
the
outstanding
balance
of
your
account
with
Olympic
payable
to
Thames
Bandag
and
Tire
Limited
and
this
shall
be
your
good
and
sufficient
authority
for
so
doing.
In
the
event
you
have
any
concerns
or
questions,
please
feel
free
to
contact
a
representative
of
Thames
Bandag
and
Tire
Limited
in
Cambridge,
Ontario,
(519)
653-0403
or
in
London,
Ontario
at
(519)
453-5300,
or,
alternatively,
contact
its
solicitors,
Chizmar
Walker,
636
Wellington
Street,
London,
Ontario,
N6A
3R9,
(519)
672-8440.
Yours
very
truly
THAMES
BANDAG
AND
TIRE
LIMITED
THAMES
TIRE
&
AUTO
CENTRE
(LONDON)
INC.
per:
Some
three
days
later,
on
September
12,
1983,
the
defendant
sent
to
the
plaintiff
its
"Demand
for
Tax
on
Assigned
Accounts".
Because
so
much
was
made
of
this
notice
by
counsel
for
the
plaintiff
it
should
also
be
set
out
here:
Revenue
Canada
Customs
and
Excise
REGISTERED
Thames
Building
&
Tire
Ltd.
563
Clarke
Road
London,
Ontario
N5V
2E1
Reply
to:
P.O.
Box
5548
London,
Ontario
N6A
4R3
September
12,
1983
DEMAND
FOR
TAX
ON
ASSIGNED
ACCOUNTS
RE:
Olympic
Rubber
Products
Ltd.
1220
Balmoral
Road
Cambridge,
Ontario
N1T
1A5
It
is
believed
that
you
have
received
from
the
above-named,
licensed
under
the
Excise
Tax
Act,
an
assignment
of
book
debts
or
negotiable
instruments
of
title
to
such
debts.
You
are,
hereby,
required
to
pay
to
the
Receiver
General
for
Canada,
pursuant
to
the
provisions
of
section
52,
subsections
(10)
and
(11)
of
the
Excise
Tax
Act,
out
of
any
moneys
received
by
you,
after
receipt
of
this
notice,
on
account
of
such
debts,
a
sum
equivalent
to
the
amount
of
any
tax
imposed
by
the
said
Act,
upon
the
transactions
giving
rise
to
the
debts
assigned.
An
Excise
Tax
Auditor
of
the
Department
has
been
instructed
to
assist
you
in
determining
the
tax
properly
payable.
Cheques
should
be
made
payable
to
the
Receiver
General
for
Canada,
and
mailed
to
the
Regional
Chief,
Collections,
Revenue
Canada-Excise,
P.O.
Box
5548,
London,
Ontario
N6A
4R3
Telephone
519-679-4145
who
will
furnish
you
with
receipts
therefor.
L.J.
Kluger
Regional
Director,
Excise
Department
of
National
Revenue
Customs
and
Excise
Section
52,
subsections
(10)
and
(11)
of
Chapter
E-13,
R.S.C.
1970
reads
as
follows:
52(10)
When
the
minister
has
knowledge
that
any
person
has
received
from
a
licensee
any
assignment
of
any
book
debt
or
of
any
negotiable
instrument
of
title
to
any
such
debt,
he
may,
by
registered
letter,
demand
that
such
person
pay
over
to
the
Receiver
General
out
of
any
moneys
received
by
him
on
account
of
such
debt
after
the
receipt
of
such
notice,
a
sum
equivalent
to
the
amount
of
any
tax
imposed
by
this
Act
upon
the
transaction
giving
rise
to
the
debt
assigned.
(11)
The
person
receiving
any
such
demand
shall
pay
the
Receiver
General
according
to
the
tenor
thereof,
and
in
default
of
payment
is
liable
to
the
penalties
provided
in
this
Act
for
failure
or
neglect
to
pay
the
taxes
imposed
by
Parts
III
to
V.
After
the
plaintiff
received
the
above
demand
from
the
defendant
it
recovered,
from
those
who
were
formerly
indebted
to
Olympic
for
the
price
of
the
manufactured
articles
sold
to
them
by
Olympic
and
for
the
federal
sales
tax
on
the
transaction,
total
payments
in
respect
of
which
the
sum
of
$11,210.65
represents
the
federal
sales
tax
properly
payable
by
Olympic
but
not
paid
by
it
on
these
transactions.
The
plaintiff
now
wants
to
keep,
not
only
the
amount
of
the
sale
price
on
each
transaction
between
Olympic
and
its
customers,
but
also
the
amount
of
the
federal
sales
tax
imposed
on
the
transaction.
On
these
facts
the
following
question
has
been
put
for
my
opinion:
ls
Thames
liable
pursuant
to
subsection
52(10)
of
the
Excise
Tax
Act,
R.S.C.
1970,
Chapter
E-13
for
the
payment
to
Revenue
Canada
of
a
sum
equivalent
to
the
amount
of
taxes
imposed
by
the
Excise
Tax
Act
out
of
monies
received
by
Thames
on
account
of
the
debts
seized
and
retained
by
it
in
accordance
with
the
default
provisons
of
the
Securities?
Counsel
for
the
plaintiff
submits
that
because
the
plaintiff
was
the
owner
and
not
the
assignee
of
the
accounts
receivable
at
the
time
the
defendant
issued
its
demand
it
was
outside
the
ambit
of
subsection
52(10).
He
argues
that
the
plaintiff's
seizure
and
retention
of
the
accounts
receivable
under
the
provisions
of
subsection
61(2)
of
the
Ontario
Personal
Property
Security
Act
is
analogous
to
the
foreclosure
of
a
mortgage.
That
is
to
say,
once
a
secured
creditor
had
taken
collateral
and
retained
it
under
subsection
61(2)
he
no
longer
has
a
right
to
sue
for
a
deficiency
but
instead
the
secured
property
becomes
his
own
free
of
the
debtor's
equity
with
the
assignee
waiving
any
claim
to
a
deficiency.
Even
if
the
plaintiff
could
bring
itself
within
the
provisions
of
subsection
61(2)
of
the
Personal
Property
Security
Act
and
convince
me
that
on
September
12,
1983
it
was
the
absolute
owner
of
the
accounts
receivable,
that
would
not,
in
my
view,
allow
it
to
escape
the
provisions
of
subsection
52(10)
of
the
Excise
Tax
Act.
That
subsection
allows
the
defendant
to
demand
from
any
person
who
has
received
from
a
licensee
any
assignment
of
any
book
debt
out
of
the
money
received
by
him
on
account
of
the
defendant
an
amount
equivalent
to
the
tax
on
the
transaction
which
gave
rise
to
the
debt
assigned.
In
this
matter
it
is
not
disputed
that
Olympic
was
a
licensee
and
that
it
assigned
its
book
debts,
both
the
portions
represented
by
the
price
of
the
products
sold
and
the
portions
represented
by
the
federal
sales
tax
on
the
transaction,
to
the
plaintiff.
The
plaintiff
thus
falls
into
the
category
of
a
person
who
has
received
from
a
licensee
an
assignment
of
book
debts
and
as
such
it
is
obliged
to
pay
over
to
the
defendant,
out
of
any
moneys
it
receives
on
account
of
such
debts,
a
sum
equivalent
to
the
amount
of
the
tax
imposed
on
the
transaction
which
gave
rise
to
the
debt.
The
plaintiff’s
claim
to
the
book
debts
of
the
licensee,
Olympic,
arose
as
a
result
of
the
receipt
by
the
plaintiff
of
an
assignment
of
book
debts.
I
can
see
no
merit
in
the
plaintiff's
argument
that
because
it
is
now
the
owner
of
the
debts
it
is
no
longer
the
assignee
and
is
thus
beyond
the
reach
of
subsection
52(10).
The
provisions
of
subsection
52(10)
do
not
direct
themselves
to
the
nature
or
degree
of
the
plaintiff's
claim
to
the
book
debts
at
the
time
the
demand
under
subsection
52(10)
is
made.
It
only
addresses
itself
to
how
the
plaintiff's
claim
to
the
book
debts
arose,
and,
so
long
as
the
plaintiff's
ownership
arose
by
way
of
an
assignment
of
book
debts
from
a
licensee
then,
assuming
that
there
is
compliance
with
the
other
provisions
of
subsection
52(10),
that
section
is
applicable
to
the
plaintiff.
Although,
in
my
view,
it
does
not
matter
whether
the
plaintiff
was
or
was
not
the
absolute
owner
of
the
accounts
receivable,
without
reference
to
any
rights
or
equities
of
Olympic,
to
make
it
liable
to
comply
with
the
provisions
of
subsection
52(10),
the
plaintiff
was
not
in
that
position,
as
suggested
by
counsel
for
the
plaintiff,
on
September
12,
1983
when
the
subsection
52(10)
demand
was
made
by
the
defendant.
Under
section
61
of
the
Personal
Property
Security
Act
there
is
a
15-day
waiting
period
within
which
a
debtor
may
object
to
the
assignee's
retention
of
the
security
under
subsection
61(2)
and,
in
effect,
force
the
assignee
to
have
the
security
appraised
prior
to
its
sale.
In
the
present
case
the
debtor,
Olympic,
attempted
to
waive
the
15-day
period
in
the
“Notice
and
Waiver"
served
on
September
9,
1983.
However
subsection
56(5)
of
the
Personal
Property
Security
Act
prohibits
such
a
waiver
and
in
my
view
the
purported
or
attempted
waiver
by
Olympic
forming
a
portion
of
the
Notice
and
Waiver
was
ineffectual
so
as
to
allow
the
plaintiff
to
retain
book
debts
in
satisfaction
of
the
obligation
secured
within
the
meaning
of
subsection
61(2)
of
the
Act.
In
other
words
the
seizure
and
retention
could
not
occur
until
the
15-day
period
had
expired
on
September
26,
1983,
some
12
days
after
the
date
of
the
defendant's
demand
under
subsection
52(10)
of
the
Excise
Tax
Act.
Accordingly,
even
if
the
plaintiff's
argument
that
absolute
ownership
of
the
book
debts
free
from
any
claim
or
equitable
rights
of
Olympic
would
place
it
beyond
the
reach
of
the
defendant's
demand,
that
absolute
ownership
could
not
have
arisen
or
occurred
until
at
least
September
26,
1983
and,
thus,
did
not
exist
when
the
defendant's
demand
was
made
on
September
9,
1983.
There
is
also
the
possibility
that
neither
of
the
two
September
9,
1983
notices
to
Olympic
were
effective
to
vest
the
book
debts
in
the
plaintiff
free
and
clear
of
any
claim
by
Olympic
because
neither
of
them
complied
with
the
mandatory
provisions
of
subsection
61(2)
which
requires
the
creditor
to
notify
the
debtor
that
the
creditor
intends
”
.
.
.
to
retain
the
collateral
in
satisfaction
of
the
obligation
secured"
[Angelkovski
et
al.
v.
Trans-Canada
Foods
Ltd.,
6
P.P.S.A.C.
1,
Man.
Q.B.].
Although
both
notices
informed
Olympic
that
the
plaintiff
intended
retaining
the
book
debts,
neither
went
on
to
inform
the
debtor
that
the
purpose
of
the
retention
was
to
satisfy
the
obligation
secured.
In
view
of
my
findings
that
absolute
ownership
by
the
plaintiff
is
irrelevant
and,
even
if
it
were
relevant,
it
could
not
have
become
effective
until
after
the
defendant's
September
12,
1983
notice,
and
thus
could
not
take
the
debts
out
of
the
reach
of
the
subsection
52(10)
notice,
I
do
not
have
to
and
do
not
intend
to
address
this
third
argument.
Counsel
for
the
plaintiff
also
advances
the
argument
that
the
notice
issued
by
the
defendant
was
not
the
notice
contemplated
by
subsection
52(10)
of
the
Excise
Tax
Act
and
was
thus
ineffective
to
oblige
the
plaintiff
to
make
the
payments
referred
to
in
the
notice.
One
of
the
defects
invalidating
the
notice,
he
submits,
consists
of
the
opening
words
“It
is
believed
.
.
.
.
Counsel
argues
that
because
subsection
52(10)
requires
the
Minister
to
have
knowledge,
or,
as
he
put
it,
to
have
a
confirmed
belief
it
is
not
sufficient,
to
comply
with
subsection
52(10),
for
the
defendant
to
say
"It
is
believed
.
.
.
Ad
The
second
alleged
defect
in
the
notice
has
to
do
with
the
several
references
to
debts
and
transactions
in
the
plural
when
subsection
52(10)
refers
to
them
in
the
singular.
Counsel
says,
for
example,
that
if
the
plaintiff
received
payment
on
one
receivable
it
would
be
required
to
pay
only
the
amount
of
the
tax
imposed
upon
the
transaction
associated
with
that
receivable
and
would
not
be
required
to
remit
the
whole
amount
of
the
receivable
collected
to
discharge
taxes
imposed
upon
other
transactions.
He
argues
that
the
subsection
52(10)
demand
should
have
listed
each
of
the
debts
arising
out
of
the
transaction
on
which
the
tax
was
imposed,
the
amount
of
the
tax
imposed
and
a
demand,
in
respect
of
each
listed
debt
and
tax,
for
only
the
tax
portion
of
the
total
amount
recovered
by
the
plaintiff.
In
support
of
these
arguments
counsel
for
the
plaintiff
has
referred
me
to
Royal
Trust
Co.
v.
Montex
Apparel
Industries
Ltd.
(1972),
3
O.R.
132
(C.A.);
27
D.L.R.
(3d)
551.
In
that
case
the
subsection
52(10)
demand
was
found
by
the
Ontario
Court
of
Appeal
to
be
invalid
because
it
had
been
addressed
to
the
wrong
person.
The
Court
found
that
in
issuing
the
notice
the
Minister
was
bound
to
strict
observance
of
the
conditions
precedent
to
the
right
to
issue
it
and
that
as
the
notice
was
a
notice
personal
to
the
assignee
and
no
one
else
and
was
neither
directed
to
him
nor
to
his
attention
at
the
firm
where
he
worked,
it
was
ineffective
to
operate
according
to
its
terms.
In
my
view
neither
of
the
so-called
defects
raised
by
counsel
for
the
plaintiff
is
sufficient
to
invalidate
the
demand.
The
purpose
of
the
demand
is
to
notify
the
plaintiff
of
its
obligation
to
pay
to
the
defendant
the
federal
sales
tax
portion
of
a
combined
amount
of
the
sale
price
and
the
tax
formally
owed
to
Olympic
and
recovered
by
the
plaintiff
under
its
assignment
of
both
the
sale
price
and
the
tax.
The
opening
words
of
the
demand
“‘It
is
believed
that
you
have
received
.
..
an
assignment
of
book
debts
.
.
.
”
can
only
indicate
that
the
Minister
has
some
knowledge
that
there
has
in
fact
been
an
assignment.
Subsection
52(10)
does
not
require
the
Minister
to
have
absolute,
certain
or
confirmed
knowledge.
The
expression
of
the
Minister's
belief
satisfies
the
condition
precedent
to
the
issuance
of
the
notice
that
there
be
knowledge.
As
to
the
plaintiff's
submission
with
respect
to
the
pluralizing
of
the
words
"debt"
and
“transaction”
in
the
demand
when
the
singular
is
used
in
subsection
52(10),
I
have
had
some
difficulty
in
understanding
precisely
how
this
would
operate
to
invalidate
the
demand.
It
seems
perfectly
clear
to
me
that
the
demand
is
being
made
for
the
tax
portion
of
the
debt
and
not
for
the
amount
which
is
attributable
to
the
sale
price
of
the
article.
Because
the
demand
specifically
says
it
is
being
made
pursuant
to
subsection
52(10)
and
because
that
subsection
is
set
out
in
full
at
the
foot
of
the
page
containing
the
demand,
I
fail
to
see
how
the
plaintiff
can
claim
that
the
demand
is
invalid
because
it
is
claiming
more
than
is
authorized
by
subsection
52(10).
Finally,
I
note
that,
notwithstanding
the
plaintiff's
arguments
to
the
effect
that
the
demand
was
unclear,
the
parties
had
no
difficulty
in
determining
precisely
the
amount
which
had
to
be
paid
when,
for
the
purposes
of
calculating
the
amount,
they
assumed
the
notice
to
be
valid.
Under
the
circumstances
the
plaintiff's
claim
is
dismissed
with,
as
both
counsel
have
requested,
no
order
as
to
costs.
Claim
dismissed.
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