Cal Investments Ltd. v. The Queen, 90 DTC 6556, [1990] 2 CTC 418 (FCTD)

Joyal, J.: —This is an appeal by the plaintiff, a company incorporated under the laws of British Columbia, from a reassessment for income tax purposes for the taxation year 1980. The plaintiff alleges that not only is the reassessment wrong on the merits but that it was issued beyond the four-year limitation period applicable at the relevant period.

The plaintiff's challenge to the validity of the reassessment is on the grounds that a waiver signed on behalf of the plaintiff pursuant to subparagraph 152(4)(a)(ii) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") was not in a “prescribed” form and consequently is a nullity. The form prescribes that whenever the taxpayer is a corporation, its corporate seal must be affixed to the waiver. The corporate seal was not affixed.

After the parties had exchanged pleadings, they agreed that the issue of the validity of the reassessment which involves of course the validity of the waiver, should first be decided. The resolution of that issue would either bring the litigation to an end or otherwise provoke a second round of debate on the merits of the reassessment itself.

The Facts

The facts surrounding the waiver issue are not in dispute. Evidence was heard from James Findlay Briggs, vice-president, finance, of the plaintiff company and from Spencer William Holmes, an auditor with Revenue Canada, Taxation. Both witnesses gave clear and forthright testimony and it can be said that on all issues of substance, they effectively corroborated each other.

It was late in January or early February 1985, that Mr. Holmes started an audit of the plaintiff's books. In the course of the following seven or eight months, he attended intermittently at the plaintiff's offices to conduct his audit. His chief source of information throughout that period was of course Mr. Briggs whose duties and functions specifically involved the administration of the plaintiff's accounts and of its corporate records.

Mr. Briggs had held that position for some eight years. He was not, however, a shareholder or director of the plaintiff company. He also held the title of corporate secretary but did not have unilateral authority to affix the corporate seal to documents. Neither did he have possession of the corporate seal. The seal always remained in the care of the plaintiff's solicitors.

By September of 1985, Mr. Holmes was alerted to the fact that the limitation period was running out and on September 12, 1985, he submitted to Mr. Briggs a waiver document in the form prescribed by the Minister of National Revenue. The required information on the form had already been written and Mr. Briggs had simply to sign. Mr. Briggs had not seen that kind of form before but he assumed the four-year limitation was imminent. He did not discuss the matter with anyone in his company nor for that matter did Mr. Holmes ask him if he had the necessary authority nor did he request that the corporate seal be affixed. Mr. Briggs did not read the printed words in the waiver. He contented himself to reading the typed words which Mr. Holmes had inserted. Without further ado, Mr. Briggs signed the form.

Mr. Briggs admitted in his evidence that he assumed that it was within his sphere of responsibility as vice-president, finance, to sign the form. He knew enough from his experience as a chartered accountant that, should he refuse to sign it, an assessment would immediately issue. Furthermore, all previous corporate tax returns and amended returns had been signed by him. He felt that no special authority was required.

It was some weeks later that Mr. Holmes' colleagues in Revenue Canada alerted him to the absence of the corporate seal on the waiver document. On October 18, 1985, he returned to Mr. Briggs’ office and requested that this be done. Mr. Briggs informed him that he had no authority to affix the corporate seal and that in any event the seal was not in his possession. Mr. Briggs consulted the plaintiff's solicitors and on October 24, advised Mr. Holmes that no further action would be taken by the plaintiff and that the corporate seal would not be affixed.

The result is the issue as framed.

The Case for the Plaintiff

The plaintiff's argument may be summarized as follows:

1. Subsection 152(4) of the Income Tax Act provides for the waiver rule and states that a waiver must be filed or completed in the prescribed form;

2. Part XVII of the Act deals with interpretation and in subsection 248(1) thereof, the word “prescribed” in the case of a form means prescribed by order of the Minister;

3. Subsection 220(1) further stipulates that it is the duty of the Minister to administer and to enforce the Act.

4. In furtherance of the Minister’s duties, a form of waiver was prescribed and on the reading of it, it sets forth in unequivocal terms the manner in which a corporation may waive a statutory right.

5. Further, says plaintiff's counsel, the Minister's prescription is deserving of the same recognition as a provision of a statute or of a regulation. Under section 2 of the Interpretation Act, R.S.C. 1985, C. I- 21, as complemented by statutory authority conferred on the Minister under the Income Tax Act, the word "enactment" and a Minister's “direction” have equal force and effect.

6. It can therefore be said that the Minister intended that the corporate seal be affixed to a corporation's waiver and there is no reason to suggest that the requirement is permissive or discretionary or elective.

7. Although plaintiff's counsel readily concedes that a corporate seal in contemporary terms might be regarded as an anachronism and indeed certain provincial corporation statutes have done away with it, the requirement of a corporate seal to bind a corporation is still there. The Company Act of British Columbia, R.S.B.C. 1979, c. 59 in section 124, provides for a seal. If the Minister should then prescribe that such a seal be affixed to a waiver, it becomes an essential requirement to its validity and has binding effect.

In support of the foregoing arguments, plaintiff's counsel relies inter alia on the case of Pan American World Airways Inc. v. The Queen, a 1979 decision of Mahoney, J., then of the Trial Division of this Court, and reported at [1979] 2 F.C. 34; 96 D.L.R. (3d) 267. In that case, Regulations pursuant to section 4 of the Aeronautics Act authorized the responsible Minister to impose charges on aircraft owners flying within Canada for use of public services and provided for the enforceable collection of these charges. Section 5 of the statute, however, authorized the Minister to “prescribe” charges which in effect were imposed on overflights of aircraft in Canada on international routes. Section 5, by some anomaly in drafting perhaps, did not provide for forcible collection. The argument advanced by Pan Am, of course, was that the Act failed to impose a liability for the payment of these charges and that this was a fatal gap in the legislative scheme.

Faced with this hard question, Mahoney, J. said this at D.L.R. page 276:

“Prescribing” as used in s. 5 is the gerund of the word “prescribe”, a transitive verb. It is not used in a medical context nor can it be found that Parliament intended to use it in one of its obsolete meanings. As a word having a technical legal meaning "prescribing" may be a word relating to the loss of a right by affluxion of time but it is plainly not employed in that sense in s. 5. It is to be given its ordinary English meaning.

The Oxford English Dictionary (1933) defines the current, transitive, verb "prescribe" as follows: "To write or lay down as a rule or direction to be followed; to appoint, ordain, direct, enjoin.” Funk and Wagnail's New Standard Dictionary of the English Language (1961) has the following definition: "To set or lay down authoritatively for direction or control; give as a law or direction.” Webster's Third New International Dictionary (1961) defines it in the following terms: "to lay down authoritatively as a guide, direction or rule of action: impose as a peremptory order; dictate, direct, ordain!' Referring to the same dictionaries, the Oxford's pertinent definition of "impose" is: "To lay on, as something to be borne, endured or submitted to; to inflict (something) on or upon; to levy or enforce authoritatively or arbitrarily.” Funk & Wagnail's definition is: "To lay or place, as something to be borne or endured; levy or exact as by authority, as to impose a tax, toll or

penalty.” Webster's definition is: "to make, frame or apply (as a charge, tax obligation, rule, penalty) as compulsory, obligatory or enforceable; levy, inflict.”

The words are synonyms. They have the same general meaning. Parliament may have intended to make a significant distinction between the authorities delegated by using “imposing” in s. 4 and “prescribing” in s. 5; however, that is not the most reasonable construction to be put on the sections. The corollary of the plaintiff's argument would, it seems, be that when the Governor in Council "imposes" a charge under s. 4, he does everything necessary but fix the amount of the charge and that there is no authority for him to do that, thereby rendering the legislative scheme fatally deficient. It is not, I think, to be assumed that Parliament, speaking in ordinary English, intends synonyms necessarily to have very different meanings, thereby rendering a legislative scheme as incomplete as the plaintiff would have this one. It is not an argument that would have occurred to any but a lawyer nor, very likely, even to a lawyer had the sections not appeared in immediate proximity.

I therefore conclude that when the Governor in Council or Minister of Transport, with due authority, which is not questioned in this action, makes a Regulation prescribing a charge under s. 5 of the Aeronautics Act for the use of any facility or service, he not only fixes the charges for such use but imposes on their user a legal obligation to pay the charges.

I take it that counsel's reliance on the foregoing case is to emphasize the seriousness and importance of any prescribed term or condition and to have the Court conclude that if the authority to "prescribe" in the Aeronautics Act includes the authority to impose and collect, it should follow that where a Minister prescribes that a corporate seal be affixed to a waiver, non-compliance results in a nullity.

Counsel for the plaintiff also cites the case of Waterous Engine Co. v. Town of Capreol, [1923] 3 D.L.R. 575, a judgment of the Court of Appeal of Ontario where the Court set aside a claim on a note issued and signed by the mayor and treasurer of a municipal corporation on the grounds that the note was not under seal and no by-law authorizing the note to be used had been passed. This case suggests again that whenever formalities, such as a corporate seal or by-law are imposed by law, non-compliance with those formalities have substantive results.

It is in the case of Guaranty Properties Ltd. v. The Queen, [1987] 1 C.T.C. 242; 87 D.T.C. 5124, that counsel for the plaintiff finds support for the proposition that a defect in the waiver cannot be cured. In that case, Rouleau, J. of this Court, after reviewing the statutory provisions of the Income Tax Act respecting corporate amalgamation, found that a reassessment issued in error against one corporation, could not be retroactively validated against another corporation where such a reassessment had become statute-barred. Rouleau, J. points out in that case, at page 252 (D.T.C. 5133), that:

The curative provisions of the Income Tax Act will not assist the defendant in this case. It is clear from the facts that a number of errors have plagued the defendant throughout this matter. The auditor who should have been made aware of the amalgamation was not advised and, by the time this was discovered and matters rectified, the time limit prescribed by statute for reassessing Dixie's 1976 taxation year had expired. Equity alone would prevent the use of curative provisions such as those contained within the Income Tax Act to correct a substantive error of this nature. I am of the opinion that the legislation does not contemplate the amendment of a reassessment after the expiry of a limitation period.

Finally, counsel for the plaintiff quotes from Phipson on Evidence, 8th ed., page 667, as quoted in Wilchar Construction Ltd. v. The Queen, [1981] C.T.C. 415; 81 D.T.C. 5318, at page 419 (D.T.C. 5321), as follows:

Estoppels of all kinds, however, are subject to one general rule: they cannot override the law of the land. Thus, where a particular formality is required by statute, no estoppel will cure the defect.

On that basis, argues counsel, it matters not what binding effect a document issued without a corporate seal would have on a corporation and no matter if the intention of Mr. Briggs in signing the waiver was to make of it an effective waiver, it cannot make up by way of estoppel the absence of a prescribed corporate seal.

The Case for the Crown

Crown counsel takes the position that a corporate seal on the waiver form is not necessary to make it valid. Alternatively, says counsel, if a seal is necessary, the form is substantially complete and is in substantial compliance with the prescribed form to make it valid.

Furthermore, counsel finds the necessary curative provisions in subsection 152(3), subsection 152(8) and in section 166 of the Income Tax Act.

Subsection 152(8) provides that "An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission therein or in any proceeding under this Act relating thereto."

Subsection 152(3) states that “Liability for the tax under this Part is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made”.

Section 166 of the Act provides that "An assessment shall not be vacated or varied on appeal by reason only of any irregularity, informality, omission or error on the part of any person in the observation of any directory provision of this Act".

Finally, counsel for the Crown argues that on the basis of Mr. Briggs’ conduct and of his own evidence in relation to the execution and delivery of the waiver form, the plaintiff must be estopped from denying the validity of the instrument or the authority of Mr. Briggs in executing it on behalf of the company.

With respect to the mystique or legal fiction of a corporate seal, counsel for the Crown quotes from F.W. Wegenast, The Law of Canadian Companies, Carswell, 1979 at page 268 as follows:

Section 36 of the Canadian Act provides that “every deed which any person, lawfully empowered in that behalf by the company as its attorney, signs on behalf of the company and seals with his seal, shall be binding on the company and shall have the same effect as if it was under the seal of the company." So that it is not so much a matter of affixing the corporate seal as it is of affixing a seal.

As to the necessity of the seal in contracts, section 37 of the Canadian Act provides that "every contract, agreement, engagement or bargain made, and every bill of exchange drawn, accepted or endorsed, and every promissory note and cheque made, drawn or endorsed on behalf of the company, by any agent, officer or servant of the company, in general accordance with his powers as such under the by-laws of the company, shall be binding upon the company. In no case shall it be necessary to have the seal of the company affixed to any such contract, agreement, engagement, bargain, bill of exchange, promissory note or cheque or to prove that the same was made, drawn, accepted or endorsed, as the case may be, in pursuance of any by-law or special vote or order. No person so acting as such agent, officer or servant of the company shall be thereby subjected individually to any liability whatever to any third person.

This statutory provision is conclusive as to a number of questions which were formerly the cause of much difficulty. The general rule of the common law was that a corporation was not bound by contracts unless under seal, though even in early times it was recognized that the seal was not necessary for every corporate act. In modern times the common law rule has become so eaten up with exceptions that little remains of it, apart from special statutory intervention. It has been laid down in the first place that in all matters of trifling importance and frequent occurrence a contract duly entered into by any corporation would be binding both on the corporation and the other party, notwithstanding the absence of the corporate seal. Again it is well settled that in the case of executed contracts, that is to say contracts in which one of the parties, whether the corporation or the other party, had done its part, the corporation was liable though the contract was not under the corporate seal. Further, it has been clearly established that all contracts of trading corporations within the scope of their objects are binding on the corporation without the corporate seal. Finally, it has been laid down that even in the case of non-trading corporations a contract may be binding without the corporate seal so long as the contract is within the special purposes of the corporation's charter. It has been held under some of the provincial Acts that important appointments such as that of manager or a chief engineer should be made under seal; but this would not be so under the Canadian Act except in the sense that the appointment to be regular, should be by by-law, or at least under the authority of a general bylaw. But, as already said, the provision of the Canadian Act seems thoroughly to cover the subject, and incidentally to assimilate, in the case of Canadian companies, the law of Quebec with that of the other provinces in the matter of the use of the corporate seal.

Practically speaking, therefore, and apart from section 37, the use of the seal is required of a corporation only where it would be of an individual, that is to say upon such documents as deeds, powers of attorney, etc. In this connection the reader may be reminded that a seal "imports" both consideration and delivery: that is to say, where a contract is under seal it is not necessary to prove either consideration or the delivery of the contract, consideration not being necessary in the case of a contract under seal and delivery being presumed. But that is not to say that want of consideration may not be proved or that a deed or contract under seal may not be held in escrow. It is a matter of fact and intention whether delivery has taken place, but prima facie delivery may be presumed; and where an instrument is produced under the seal of a company it is presumed to have been properly executed, though this presumption may be rebutted.

Crown counsel relies heavily on the statement in the foregoing extract that in modern times, the common law rule to the effect that no corporation is bound by contract except under seal, has become so eaten up with exceptions that little remains of it, apart from special statutory intervention. It is argued that in the circumstances the prescribed “corporate seal" on a waiver document is not an essential requirement to establish a document valid on its face and binding on the company.

Crown counsel also finds comfort in sections 124 and 125 of the Company Act, R.S.B.C. 1979, c. 59, which appears to establish that whatever is required between natural persons to enter into binding contracts applies as well to companies. These sections read as follows:

124. (1) Every contract that, if made between natural persons would by law be required to be in writing and under seal, may be made for a company in writing under seal and may, in the same manner, be varied or discharged.

(2) Every contract that, if made between natural persons would by law be required to be in writing and signed by the parties to be charged, may be made for the company in writing signed by a person acting under its authority, express or implied, and may in the same manner be varied or discharged.

(3) Every contract that, if made between natural persons would by law be valid although made orally and not reduced to writing, may be made in like manner for the company by a person acting under its authority, express or implied, and may in the same manner be varied or discharged.

(4) Every contract made according to this section is effectual in law, and shall bind the company and its successors and all other parties to it.

(5) Every bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by, or on behalf of, or on account of, the company by a person acting under its authority.

125. A document that requires authentication or certification by a company may be authenticated or certified by a director, or officer of the company, or by the solicitor for the company, and need not be under its common seal.

There is also reference by Crown counsel to a number of cases under the Income Tax Act where strict adherence to various prescriptions has been found wanting without affecting the legality of the document.

In The Queen v. Hart Electronics Ltd., [1959] C.T.C. 507; 59 D.T.C. 1192, the taxpayer company was charged with failure to file tax returns. In fact, an officer of the company had forwarded a letter to National Revenue enclosing unsigned T-2 return forms showing no tax payable and on which certain remarks and information had been filled in. No documents were attached to the forms.

The Manitoba Court of Appeal dismissed an appeal by the Crown from a magistrate's dismissal of the charge. At page 509 (D.T.C. 1193), the Court stated:

The form was not signed but was enclosed with a letter. The omission to sign the form does not render the return a nullity. If a cheque had been enclosed it could not be argued that there was no return. If it appears that no tax is payable it also is a return though the form was not signed. In my opinion a form T2, which gives certain information sent by letter though the form is not signed, does constitute an income tax return.

A similar finding occurred in The Queen v. Ross Kidd (1974), 6 O.R. (2d) 769; 74 D.T.C. 6574. Lacourciére, J., then of the Ontario High Court, refused to entertain a defence of wilful tax evasion on the grounds that the accused taxpayer had not signed his tax returns when he had failed to declare his true income. His Lordship stated at D.T.C. pages 6575-6576:

The unsigned income tax returns for the 1970 and 1968 taxation years were complete and sufficient to constitute a defence on a failure to file charge. The Queen v. Hart Electronics Ltd., [1959] C.T.C. 507; 59 D.T.C. 1192. If the appeal intended that the return should form the basis for his tax assessment—and there cannot be another conclusion —he cannot rely on his omission to sign it. He cannot have it both ways: the return cannot be a defence to a charge of non-filing as well as a defence, because it is unsigned, to a charge of evasion.

Noël, A.C.J. of this Court faced an analogous issue in the case of The Queen v. Simard-Beaudry Inc., [1971] F.C. 396; 71 D.T.C. 5511. The defendant in 1964 had purchased most of the assets of Simard & Frères Cie Limitée and had undertaken to pay the seller's debts incurred prior to January 1, 1965.

When the seller was reassessed in 1969 for substantial amounts of taxes covering the years 1954-1964, the Crown claimed the unpaid taxes from the defendant. In resisting the claim, the defendant pleaded the invalidity of certain waivers it had signed on behalf of the other company. His Lordship's comments on that issue are found at page 905 (D.T.C. 5516):

Defendant's argument that the waivers signed by it for the mis-en-cause for 1961 and 1962—as regards which it claims that there were no misrepresentations or fraud and where, as a result, the prima facie presumption of validity of the assessments would not apply—are not valid because they were not signed by the taxpayer cannot be raised here. Defendant held itself out as the agent, or apparent agent, of the mis-en-cause, and plaintiff, relying on these waivers, subsequently allowed the four years specified in s. 46(4) to elapse with respect to the years in question. In the circumstances plaintiff [sic] is in no position to plead the invalidity of these waivers. Moreover, I do not think it is too surprising that the waivers were signed by the purchaser of the rights and property of the vendor, since the purchaser, in which some of the persons having an interest also had interests in the mis-en-cause, is the very same company which continued the vendor's operations and must have collected the profits therefrom.

It was in the case of Smerchanski v. M.N.R., [1974] C.T.C. 241; 74 D.T.C. 6197, that MacKay, D.C.]. raised the issue of estoppel on which Crown counsel relies. His Lordship said at page 251 (D.T.C. 6204):

Hanbury's Modern Equity, 9th ed., p. 664 and 666, defines estoppel as a doctrine which presents a person acting inconsistently with a representation which he has made to the other party, in reliance on which the other party has acted to his detriment. It is necessary that there should be an unambiguous representation of existing fact upon which the representee is intended to act and does act to his detriment.

Finally, Crown counsel cites the dictum of Muldoon, J., of this Court, in the case of Optical Recording Corporation v. The Queen, [1986] 2 C.T.C. 325; 86 D.T.C. 6465 at 338 (D.T.C. 6474): "Printed forms are part of the essential mystique of governments in the twentieth century, but one must not be dazzled by printed forms even when they are officially prescribed. The printed form itself carries no legal force.”

The Findings

The issue remains whether the absence of a corporate seal on a prescribed waiver document renders it null and void. To determine this, the following elements, in my view, should be considered.

1. Nature of a waiver

A waiver of the sort at issue in this case, might be interpreted as an accommodation between the Crown and a taxpayer for the better administration of the Income Tax Act and to provide a more efficient determination of any liability thereunder. In the light of the limitations on assessments under section 152 of the Act, the Crown requests a waiver so that it may continue its assessment or audit work in a normal administrative mode without having to worry about limitations. The taxpayer, on the other hand, knows full well that on an assessment being made, he alone has the burden of proving it wrong. That burden becomes much heavier if the Crown, facing the end of the limitation period, issues what might be termed a premature assessment which, for purposes of abundant caution, would include many sundry items which the taxpayer would have to traverse one by one. The taxpayer in those circumstances would look upon a waiver as being to his own benefit as well as the Crown's and would ordinarily comply with the Crown's request.

In many cases, also, the waiver might be limited to specified issues, i.e., those where assessing or auditing processes have not been completed and which in fact remain the only outstanding items on which the Crown can ultimately decide to assess or reassess. This narrows the field of the assessment and again provides mutual advantages to both the Crown and the taxpayer.

2. Requirements of a prescribed form of waiver

If by its nature, a waiver under the Income Tax Act may be said to be a mutual affair, it might nevertheless be incumbent upon the Crown in accepting a waiver to be satisfied that the taxpayer will be bound by it. This would normally present no problem when the taxpayer is an individual. It is otherwise, however, when the taxpayer is a corporation which can only become bound by the hand of a person or persons acting on its behalf. The authority of such person or persons would of course be best assured by the affixing of the corporate seal. The corporate seal would thus provide a sufficient degree of validity or authenticity on which the Crown could rely.

Viewed in that light, the requirements of a corporate seal could be said to be for the benefit of the Crown.

3. The statutory basis for the prescribed form

Subsection 244(16) of the Act provides that "Every form purporting to be a form prescribed or authorized by the Minister shall be deemed to be a form prescribed by order of the Minister under this Act unless called in question by the Minister or some person acting for him or Her Majesty".

Subparagraph 152(4)(a)(ii) provides that a Minister may reassess at any time when a taxpayer “has filed with the Minister a waiver in prescribed form within four years. . .”. [Emphasis added.]

The prescribed form of waiver in 1985 declares that it is authorized and prescribed by the Minister. The form also includes on its face a series of instructions which the form indicates must be fulfilled in order for the waiver to be valid. It must be signed by the taxpayer himself, if an individual, or if a corporation, by the authorized signing officer with the authority to bind the corporation. In the case of a corporation, the corporate seal must be affixed.

This is in line with plaintiff's argument that the corporate seal requirement is mandatory. Its absence renders the waiver null and void. It is not a valid waiver and the statute prescribes that a valid waiver it must be. Furthermore, according to this line of thinking, the waiver cannot be accepted as valid if the signing officer as vice-president, finance, enjoying the ostensible authority to bind the company, did not have, on the evidence, any authority on his own to affix the corporate seal. This of course is to suggest that even if by some circumstance or other, Mr. Briggs had had possession of the corporate seal at the time the waiver was submitted to him, his affixing it without the required authority would not have bound the company.

4. General rules re corporate seal

It may be briefly stated that according to sections 124 and 125 of the Company Act of British Columbia, it would not have been ordinarily required to affix the seal to the waiver document to make it valid and binding on the company. In the circumstances, the issue of the waiver's validity rests exclusively on whether or not the prescription is of such a mandatory nature that its absence makes the document null and void.

5. Mandatory or directory "enactment"

This requires an interpretation of the "prescribed" conditions. The attachment of a corporate seal is either a mandatory requirement or a discretionary one. Whether it is one or the other requires consideration of the purpose of the prescription, the context within which it is deemed to apply and the general intendment of either Parliament or of its servant in imposing it. I subscribe in this respect to the words of Lord Campbell in the case of Liverpool Borough Bank v. Turner (1860), 2 De G.F. & J. 502 where he stated at 507-508:

No universal rule can be laid down for the construction of statutes as to whether mandatory enactments shall be considered directory only or obligatory only with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed.

A similar approach was adopted by Lord Penzance in Howard v. Boddington (1877), 2 P.D. 203 at 211:

I believe that as far as any rule is concerned you cannot safely go further than that in each case you must look to the subject matter; consider the importance of the provision that has been disregarded and the relation of that provision to the general object intended to be secured by the Act; upon a review of the case in that aspect decide whether the matter is what is called imperative or only directory.

The Conclusion

A review of the particular facts before me as well as of the extensive case law referred to by counsel leads me to the conclusion that the requirement of the corporate seal is directory only. I view the prescription imposed by the Minister in that regard as one to provide the Minister with an assurance that he can safely postpone his reassessment and that he may rely on the corporate taxpayer being bound by it. The taxpayer would not, absent unusual circumstances such as a forged signature, be in a position to repudiate it when the limitations have run out.

On the facts before me, no such unusual circumstances apply. There is no doubt in my mind that Mr. Briggs, as vice-president, finance, had an implied authority to agree to a waiver. He knew full well the purpose of the waiver and although he had not previously been called upon to deal with a waiver on behalf of his company, he knew from his previous experience as a chartered accountant what a waiver was all about. He had no hesitation in signing it. He assumed, correctly in my view, that without a waiver, an immediate assessment would issue. He did not feel the need to bring the matter to the attention of his directors. He felt it was part of his basic responsibility as vice-president, finance, to deal with it. For some years, as a matter of fact, he had dealt with the company's tax matters and had signed several T-2 tax returns in previous years. Mr. Briggs of course had no specific authority to use the seal but I must find, on the evidence, he had no less an implied authority to sign a waiver than he had to sign corporate tax returns.

The other aspect material to the case is that the prescription imposed by the Minister is, in my view, for the benefit of the Minister. For reasons already stated, it is the Minister's measure of protection and may, in appropriate circumstances, be waived by him. The Minister's position in that regard is analogous to any person's prerogative to waive a condition prescribed in his favour.

A further element in the matter before me is that this waiver, however prescribed in its form, is not a statutory obligation imposed on a taxpayer over which, in appropriate cases, statutory defences might be raised. A waiver, as prescribed in this case, is no more, no less a consensual arrangement between the taxpayer and the Crown to accept a delayed process for an assessment to be made for reasons which are mutually advantageous. It is clear from the evidence that Mr. Briggs willingly signed the waiver with the intention of making of it a valid waiver binding on the company. From the realities of the situation as I have described it, the waiver, in the eyes of Mr. Briggs, was no big deal.

In such circumstances, can it now be said that in the absence of such a ministerial prescription as a corporate seal on the waiver form, the document should be considered null and void and bereft of any legal weight? To do so, in my respectful view, would be to endorse the arguments advanced by plaintiff's counsel that the subject matter be treated within the narrow perimeters of the prescribed form, within the even narrower context of the Minister's printed postulates and that the substance and mutuality of the waiver process itself be disregarded. It would require a strict or literal interpolation of the several doctrines of interpretation suggested by plaintiff's counsel and confer on the prescriptions of the waiver form a sovereign and inviolate character which, in my respectful view, is not warranted.

If an unsigned tax return can be found to be a valid return as in the Hart Electronics case, supra, or if a waiver signed by one company can be found to bind another company, as in the Simard-Beaudry case, supra, I can see no reason why, in the particular circumstances of the case before me, a document intended to bind the company, signed on its behalf by a senior officer with at the very least an implied authority to do so, could now be repudiated on grounds of non-compliance with one of its prescribed conditions. It may be said that the Minister was at risk when he accepted the plaintiff's waiver without its corporate seal. It does not, however, leave it open to the plaintiff to repudiate the waiver on that ground.

I should therefore find that, despite the ingenious arguments of the plaintiff's counsel to the contrary, the corporate seal is a discretionary provision for the Minister’s benefit, that the deficiency in the waiver does not create a nullity and that the assessment subsequently issued is valid in all respects.

Further to the parties’ consent to a hearing and adjudication of this preliminary yet very much substantive issue, the plaintiff's action is dismissed. Subject to any appeal, the parties may now move to set down for trial on the merits of the plaintiff's appeal against the defendant's assessment.

Costs shall be in the cause.

Action dismissed.