Date: 20010402
Docket: A-816-99
Coram: DÉCARY J.A.
LÉTOURNEAU J.A.
NOËL J.A.
Between:
YVETTE MARCOUX
Appellant
AND
ATTORNEY GENERAL OF CANADA
Respondent
JUDGMENT
The appeal is dismissed with costs.
Certified true translation
Suzanne M. Gauthier, LL.L. Trad. a.
Date: 20010402
Docket: A-816-99
Neutral reference: 2001 FCA 92
Coram: DÉCARY J.A.
LÉTOURNEAU J.A.
NOËL J.A.
Between:
YVETTE MARCOUX
Appellant
AND
ATTORNEY GENERAL OF CANADA
Respondent
Hearing held at Montréal, Quebec on Tuesday, March 20, 2001
Judgment rendered at Ottawa, Ontario on Monday, April 2, 2001
REASONS FOR JUDGMENT BY: NOËL J.A.
CONCURRED IN BY: DÉCARY J.A.
LÉTOURNEAU J.A.
Date: 20010402
Docket: A-816-99
Neutral reference: 2001 FCA 92
Coram: DÉCARY J.A.
LÉTOURNEAU J.A.
NOËL J.A.
Between:
YVETTE MARCOUX
Appellant
AND
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
NOËL J.A.
[1] This is an appeal from a decision by Denault J. (the decision is reported at [2000] D.T.C. 6010), by which he dismissed the appellant's application for judicial review asking the Court to quash a peremptory request (R.S.C. 1985, 5th Supp., c. 1 - "the Act") requiring The Manufacturers Life Insurance Company ("Manulife Financial") to pay the Receiver General 30 percent of the amount owed the appellant under his supplemental pension plan.
[2] The debt which gave rise to the peremptory demand resulted from a notice of assessment in the amount of $1,992.53 for the 1996 taxation year issued to the appellant in June 1997. As that debt remained unpaid, the Minister of National Revenue on March 5, 1998 sent Manulife Financial a formal request for payment to garnish 30 percent of the amount owed the appellant.
[3] Manulife Financial complied with this obligation as of April 1, 1998 and the appellant's debt for the 1996 taxation year was paid in its entirety. A second application for judicial review was filed by the appellant in respect of a second formal request for payment for the 1998 taxation year. However, a stay order was issued against that request until a final judgment was rendered in the case at bar.
[4] The appellant challenged the request, alleging that under art. 553(7) of the Code of Civil Procedure and arts. 2377 and 2378 of the Civil Code of Quebec the moneys were exempt from seizure.
[5] The trial judge first concluded that the facts in the case at bar did not fall within the scope of arts. 2377 and 2378 of the Civil Code. He also concluded that the appellant had not shown that his employer had contributed to his pension plan as required by art. 553(7) of the Code of Civil Procedure.
[6] In this Court the appellant conceded that the provisions of the Civil Code could not be applied to the case as it was constituted before the trial judge. However, the two parties argued their cases on the assumption that art. 553(7) of the Code of Civil Procedure could be applied despite the conclusion arrived at by the trial judge. In this connection, the evidence was that the employer had in fact contributed to the appellant's pension plan and that the trial judge could not initially exclude the application of art. 553(7) of the Code of Civil Procedure (see para. 8 of the appellant's detailed affidavit, appeal book p. 28).
[7] Despite his preliminary conclusion, the trial judge proceeded with his analysis and came to the conclusion that in any event the exceptions from seizure mentioned in the Civil Code and the Code of Civil Procedure could not be set up against the respondent. In the trial judge's view, it can be seen from ss. 224 and 225 of the Act that a distinction must be made between a seizure of movable property and the seizure of money in the hands of third parties. According to the trial judge, Parliament chose to deal with these two kinds of seizure in a different way by excluding provincial exemption from seizure rules for purposes of s. 224 and adopting them for purposes of s. 225. By way of conclusion, the trial judge added that the Act was a complete code which is really autonomous in terms of private law.
[8] The relevant legislation is as follows:
Sections 224(1) and 225(1) and (5) of the Act
| 224 (1) Where the Minister has knowledge or suspects that a person is, or will be within one year, liable to make a payment to another person who is liable to make a payment under this Act (in this subsection and subsections (1.1) and (3) referred to as the "tax debtor"), the Minister may in writing require the person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor's liability under this Act.
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224 (1) S'il sait ou soupçonne qu'une personne est ou sera, dans les douze mois, tenue de faire un paiement à une autre personne qui, elle-même, est tenue de faire un paiement en vertu de la présente loi (appelée "débiteur fiscal" au présent paragraphe et aux paragraphes (1.1) et (3)), le ministre peut exiger par écrit de cette personne que les fonds autrement payables au débiteur fiscal soient en totalité ou en partie versés, sans délai si les fonds sont immédiatement payables, sinon au fur et à mesure qu'ils deviennent payables, au receveur général au titre de l'obligation du débiteur fiscal en vertu de la présente loi.
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| 225 (1) Where a person has failed to pay an amount as required by this Act, the Minister may give 30 days notice to the person by registered mail addressed to the person's latest known address of the Minister's intention to direct that the person's goods and chattels be seized and sold, and, if the person fails to make the payment before the expiration of the 30 days, the Minister may issue a certificate of the failure and direct that the person's goods and chattels be seized.
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225 (1) Lorsqu'une personne n'a pas payé un montant exigible en vertu de la présente loi, le ministre peut lui donner un avis au moins de 30 jours avant qu'il procède, par lettre recommandée à la dernière adresse connue de cette personne, de son intention d'ordonner la saisie et la vente des biens meubles de cette personne; si, au terme des 30 jours, la personne est encore en défaut de paiement, le ministre peut délivrer un certificat de défaut et ordonner la saisie des biens meubles de cette personne.
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| (5) Exemptions from seizure. Such goods and chattels of any person in default as would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section.
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(5) Les biens meubles de toute personne en défaut qui seraient insaisissables malgré un bref d'exécution décerné par une cour supérieure de la province dans laquelle la saisie est opérée sont exempts de saisie en vertu du présent article.
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Article 553(7) of the Code of Civil Procedure
| 553. The following are exempt from seizure:
(7) Benefits payable under a supplemental pension plan to which an employer contributes on behalf of his employees, other amounts declared unseizable by an Act governing such plans and contributions paid or to be paid into such plans . . .
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553. Son insaisissables :
7. Les prestations accordées au titre d'un régime complémentaire de retraite auquel cotise un employeur pour le compte de ses employés, les autres sommes déclarées insaisissables par une loi régissant ces régimes ainsi que les cotisations qui sont ou doivent être versées à ces régimes . . .
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Analysis and decision
[9] Counsel for the appellant properly argued that St-Cyr v. La Société d'Administration et de Fiducie et al. and The King, [1951] D.T.C. 512, at 514 (Q.S.C.), and the consequent decisions, including Perron v. The Queen (T-1911-89, May 14, 1990, F.C.), no longer reflect the state of the law on the point in that they are based on art. 9 of the Civil Code of Lower Canada. Article 9 of the Civil Code of Lower Canada, which maintained the Crown's prerogative unless there was express provision to the contrary, is no longer in effect since the Civil Code of Quebec came into effect on January 1, 1994.
[10] Having said that, the issue as submitted to this Court ultimately only involves a question of statutory construction. Counsel for the appellant conceded, as he did before the trial judge, that the Parliament of Canada has the legislative authority to raise money "by any Mode or System of Taxation" (s. 91(3) of the Constitution Act, 1867, U.K., 30 & 31 Vict., c. 3), that this jurisdiction includes that of recovering the taxes so raised (R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627; Transgas Ltd. v. Mid-Plains Contractors Ltd., [1994] 3 S.C.R. 753; Pembina on the Red Development Corp. v. Triman Industries Ltd., [1991] 6 W.W.R. 481) and that s. 224 is part of the legitimate exercise of that power (Sun Life Assurance Company of Canada v. Canada, [1992] 4 W.W.R. 504). Counsel for the appellant accordingly acknowledged that in exercising this power Parliament is free to disregard or to adopt the exemptions from seizure made pursuant to provincial law (Wainio v. Ontario Teachers' Pension Plan Board, [2000] O.J. No. 1175 (Q.L.), para. 6), so that the only question that arises in the case at bar is whether these exemptions were excluded in respect of seizures made pursuant to s. 224.
[11] Counsel for the appellant submitted that the trial judge erred in answering this question in the affirmative. In particular, he erred in concluding that s. 224, despite being silent on this point, has the effect of excluding the exemptions from seizure enacted by the Code of Civil Procedure. He noted that in Quebec the Civil Code and the Code of Civil Procedure constitute the corpus of private law and that the rules they contain supplement federal law. Paragraphs 24 to 59 of the reasons of Décary J.A. in Attorney General of Canada v. Constance St-Hilaire, 2001 FCA 63, an unreported judgment rendered on March 19, 2001 (A-355-99), were cited in this connection.
[12] Counsel for the appellant also noted that the interpretation accepted by the trial judge created a paradox in that the exemption of a tax debtor's property from seizure would depend on the recovery procedure selected by National Revenue. He concluded that the silence of s. 224 on the question of exempting property covered by that section from seizure should be interpreted as a reference to the applicable private law on the point, here the Civil Code and Code of Civil Procedure.
[13] In my view, this challenge to the Trial Division judgment has to be dismissed since it cannot be said in this instance that Parliament was silent. As Décary J.A. noted in St-Hilaire, supra, at para. 30 of his reasons, Parliament may derogate from the civil law when it legislates on a subject that falls within its jurisdiction. Section 224, when read with s. 225, shows that in creating the methods of seizure mentioned in those sections Parliament had in mind the exemptions from seizure enacted in private law, and chose to take them into account in s. 225 and not take them into account in s. 224. Contrary to what was argued by counsel for the appellant, Parliament has spoken on the point at issue.
[14] Moreover, that choice does not create a paradox. While it is true that a debt is a movable and that the seizure of a debt at first sight could also take place by virtue of s. 224, a careful reading indicates that the use of the power mentioned in s. 225 is reserved for the seizure of goods and chattels while s. 224 is reserved for the seizure of debts. Just as a debt cannot fall within the "goods and chattels [to] be seized and sold" as authorized by s. 225, so s. 224 also cannot be used to attach goods and chattels. It is therefore wrong to say that the liability to seizure of a tax debtor's property depends on the recovery procedure selected by National Revenue.
[15] Accordingly, the trial judge properly concluded that the seizure made in the case at bar was legal despite the exemption from seizure contained in art. 553(7) of the Code of Civil Procedure.
[16] I would dismiss the appeal with costs.
I concur.
Robert Décary J.A.
I concur.
Gilles Létourneau J.A.
Certified true translation
Suzanne M. Gauthier, LL.L. Trad. a.
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
FILE: A-816-99
STYLE OF CAUSE: Yvette Marcoux -and- Attorney General of Canada
PLACE OF HEARING: Montréal
DATE OF HEARING: March 20, 2001
REASONS FOR JUDGMENT BY:Noël J.A.
CONCURRED IN BY: Décary and Létourneau JJ.A.
DATED: April 2, 2001
APPEARANCES:
Serge Bouchard FOR THE APPELLANT
Patrick Vézina FOR THE RESPONDENT
Claude Bernard
SOLICITORS OF RECORD:
Pothier, Delisle, Sainte-Foy FOR THE APPELLANT
Morris Rosenberg, Ottawa FOR THE RESPONDENT
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