Jerome,
A.C.J.:—This
is
a
motion
brought
by
Her
Majesty
the
Queen
(the
"respondent")
to
dismiss
an
application
brought
by
Timothy
P.
Neeb
(the
"applicant")
under
subsection
225.2(2)
of
the
Income
Tax
Act
(the
“within
application").
The
within
application
was
initiated
by
the
applicant
to
fix
a
day
and
place
for
determining
whether
a"
jeopardy
collection”
direction
issued
by
the
Minister
of
Revenue
pursuant
to
subsection
225.2(1)
of
the
Income
Tax
Act
was
justified
and
to
obtain
an
order
staying
execution
upon
certificates
filed
by
the
Minister
of
National
Revenue
(the"Minister")
pursuant
to
sections
222
and
223
of
the
Income
Tax
Act.
In
this
motion,
the
respondent
also
requests
that
the
partial
stay,
imposed
by
Madame
Justice
Reed
on
March
31,
1988,
be
discharged.
The
motion
was
heard
at
Toronto,
Ontario
on
February
5
and
March
5,
1990.
On
August
21,
1990,
I
granted
the
orders
requested
by
the
respondent
for
reasons
given
orally
and
indicated
that
these
written
reasons
would
follow.
The
specific
relief
sought
by
the
respondent
is
contained
in
the
respondent's
amended
notice
of
motion
dated
January
10,
1990:
The
Motion
Is
For:
1.
An
order
dismissing
the
within
Application;
2.
An
order
discharging
the
partial
stay
imposed
by
Order
of
the
Honourable
Madam
Justice
Reed
dated
the
31st
day
of
March,
1988;
3.
Accumulated
Sheriff's
storage
costs
arising
out
of
delay
in
the
disposition
of
this
matter;
and
4.
Costs.
The
salient
facts
are
as
follows.
By
four
notices
of
reassessment,
three
dated
June
30,
1987
and
one
dated
August
11,
1987,
the
applicant
was
reassessed
with
respect
to
his
1983,
1984,
1985
and
1986
taxation
years.
This
resulted
in
an
unpaid
tax
liability
in
the
amount
of
$1,502,359.89.
On
November
25,
1987,
the
applicant
filed
notices
of
objection
in
respect
of
all
four
reassessments,
outside
of
the
90-day
period
prescribed
by
subsection
165(1)
of
the
Income
Tax
Act.
The
applicant
also
applied
to
the
Tax
Court
of
Canada
pursuant
to
section
167
of
the
Income
Tax
Act
for
an
extension
of
time
to
file
the
aforementioned
notices
of
objection.
By
virtue
of
section
225.1,
the
Minister
is
restricted
from
taking
various
collection
activities
with
respect
to
outstanding
tax
liability
prior
to
the
completion
of
a
90-day
period
following
the
mailing
of
the
notices
of
assessment.
On
March
1,1988,
the
respondent
issued
a
ministerial
direction
pursuant
to
subsection
225.2(1)
of
the
Income
Tax
Act
which
allows
collection
activities
to
be
undertaken
where
such
activities
could
reasonably
be
considered
to
be
jeopardized
by
a
delay.
On
March
15,
1988,
the
respondent
registered
notices
of
seizure
with
respect
to
a
1978
Cadillac
Seville,
a
1986
Chevrolet
Blazer
and
the
exigible
assets
belonging
to
the
applicant
and
located
in
the
applicant's
dwelling
place
at
627
Bob-O-Lynk
Road,
Mississauga,
Ontario.
On
March
23,
1988,
the
applicant
initiated
the
within
application
pursuant
to
subsection
225.2(2)
to
vacate
the
ministerial
direction.
It
was
brought
before
Madame
Justice
Reed
on
March
23,
1988
and
a
hearing
date
was
set
for
April
27,
1988.
Reed,
J.
also
imposed
a
partial
stay
as
follows:
the
seizure
and
garnishment
of
assets
and
money
shall
be
permitted
to
proceed
provided
that
any
assets
seized
or
moneys
garnished
shall
not
be
sold
or
disposed
of
by
the
Sheriff
but
shall
be
held
by
him
until
further
order
of
this
Court.
On
April
27,
1988,
the
parties
appeared
before
Mr.
Justice
Addy
who
adjourned
the
within
application
sine
die
on
consent.
The
Tax
Court
of
Canada
heard
the
application
to
extend
time
to
file
notices
of
objection
on
June
27,
1988,
and
September
19,1988.
On
June
12,
1989,
the
Tax
Court
rendered
its
judgment
denying
the
applicant's
request
for
an
extension.
Following
the
Tax
Court's
decision
and
unsuccessful
efforts
by
the
parties
to
dispose
of
the
within
application
on
consent,
the
respondent
brought
a
motion
on
December
4,
1989,
amended
on
January
10,
1990,
to
dismiss
the
within
application.
The
respondent
also
wrote
to
the
applicant
on
two
separate
occasions,
February
2,
1989,
and
July
10,
1989,
indicating
that
reassessments
were
proposed
for
the
taxation
years
in
issue.
On
December
27,
1989,
the
respondent
sent
the
applicant
another
letter
suggesting
that
it
did
not
propose
to
issue
such
reassessments
at
that
time.
The
issue
before
me
with
respect
to
this
motion
is
whether
the
within
application
has
been
rendered
academic
by
the
judgment
of
the
Tax
Court
of
Canada.
The
provisions
of
the
Income
Tax
Act
relevant
to
this
motion
are
the
seizure
of
chattels
provisions,
section
225,
the
collection
restrictions
provisions,
section
225.1,
the
collection
in
jeopardy
provisions,
section
225.2
,
and
the
assessment
provisions,
section
152:
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
.
.
.
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
30
days,
the
Minister
may
issue
a
certificate
of
the
failure
and
direct
that
the
person's
goods
and
chattels
be
seized.
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"),
.
.
.
the
Minister
shall
not,
for
the
purpose
of
collecting
the
amount,
(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.
(2)
Where
a
taxpayer
has
served
a
notice
of
objection
under
this
Act
to
an
assessment
of
an
amount
payable
under
this
Act,
.
.
.
the
Minister
shall
not,
for
the
purpose
of
collecting
the
amount
in
controversy,
take
any
of
the
actions
described
in
paragraphs
(1)(a)
to
(g)
before
the
day
that
is
90
days
after
the
day
on
which
notice
is
mailed
to
the
taxpayer
that
the
Minister
has
confirmed
or
varied
the
assessment.
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,
.
.
.
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(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)
.
.
.
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.
(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.
(8)
Costs
shall
not
be
awarded
upon
the
disposition
of
an
application
under
subsection
(2).
152.
(1)
The
Minister
shall,
with
all
due
dispatch,
examine
a
taxpayer’s
return
of
income
for
a
taxation
year,
assess
the
tax
for
the
year,
the
interest
and
penalties,
if
any,
payable
and
determine
.
.
.
(2)
After
examination
of
a
return,
the
Minister
shall
send
a
notice
of
assessment
to
the
person
by
whom
the
return
was
filed.
(8)
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.
Counsel
for
the
respondent
argues
that,
absent
the
restrictions
set
out
in
section
225.1
of
the
Income
Tax
Act,
the
respondent
is
statutorily
unrestrained
from
taking
action
to
enforce
Her
claims
with
respect
to
a
taxpayer's
tax
liability.
The
respondent
submits
that
the
90-day
limitation
prescribed
by
section
225.1
had
been
exhausted
and,
therefore,
did
not
apply
to
restrain
the
respondent
from
enforcing
Her
claims
against
the
applicant.
The
Minister
nevertheless
considered
it
prudent
to
make
a
direction
under
subsection
225.2(1)
in
the
light
of
the
applicant's
Tax
Court
application.
Counsel
maintains,
however,
that
the
Minister
need
not
have
done
so
and
submits
that,
in
any
event,
the
Tax
Court
decision
effectively
ends
the
matter.
Counsel
for
the
respondent
submits
that
by
virtue
of
subsection
152(8),
the
four
notices
of
reassessments
sent
to
the
applicant
are
valid.
They
have
not
been
varied
or
vacated
on
objection
or
appeal
and
there
has
not
been
a
subsequent
reassessment.
As
a
result
of
the
Tax
Court's
decision
denying
the
applicant
an
extended
period
of
time
within
which
to
file
notices
of
objection
to
the
reassessments,
the
applicant
has
no
statutory
means
available
to
him
to
contest
the
reassessments.
A“
jeopardy
collection”
direction
under
subsection
225.2(1)
is
no
longer
necessary
to
enable
the
Minister
to
seize,
sell
and
otherwise
dispose
of
the
taxpayer's
assets
to
collect
the
assessed
tax.
Therefore,
the
subject
matter
of
the
within
application
no
longer
exists
and
the
within
application
should
be
dismissed.
Counsel
for
the
applicant,
on
the
other
hand,
argues
that
the
Tax
Court
decision
does
not
render
academic
his
client's
application.
He
suggests
that
there
is
yet
another
way
for
the
reassessments
to
be
subject
to
review
and
collection
activities
restricted.
He
reasons
that
if
the
Minister
issues
new
notices
of
reassessment,
the
applicant
would
then
have
another
opportunity
to
file
notices
of
objection,
the
collection
restrictions
found
in
subsection
225.1(1)
would
again
apply,
and
the
provisions
of
section
225.2,
upon
which
the
within
application
is
based,
would
again
come
into
play.
The
Minister
would
then
be
precluded
from
taking
action
to
realize
on
the
unpaid
tax
liability
until
the
within
application
is
determined.
The
applicant's
argument
is
essentially
based
on
two
letters
sent
by
the
respondent
to
the
applicant
on
February
2,
1989
and
July
10,
1989.
The
relevant
portions
of
these
letters,
Exhibits
"A"
and"B"
to
the
affidavit
of
Timothy
P.
Neeb
dated
December
8,
1989,
are
as
follows:
February
2,
1989
Dear
Mr.
Neeb:
We
have
now
completed
the
investigation
of
your
financial
affairs
.
.
.
The
attached
schedule
shows
the
unassessed
portion
of
your
income.
We
will
hold
the
reassessing
action
for
30
days
pending
receipt
of
any
representations
in
this
matter.
If
you
wish
to
meet
to
discuss
your
tax
affairs
we
will
be
pleased
to
meet
with
you
at
your
convenience.
July
10,
1989
Dear
Mr.
Neeb:
Following
the
receipt
of
additional
information,
revisions
have
been
made
in
calculations
of
your
income
earned
over
the
years
1983-87.
Schedules
are
enclosed
setting
out
the
following:
1.
Calculations
of
your
revised
unreported
income.
2.
Calculations
of
revised
unreported
income
to
be
assessed.
We
propose
to
issue
reassessments
without
delay,
however;
if
you
wish
to
discuss
the
proposed
reassessments
please
contact
us
to
arrange
a
meeting.
In
addition,
we
wish
to
remind
you
that
you
have
not
yet
filed
your
T1
Income
Tax
Returns
for
1986,
1987
or
1988.
Although
the
Department
has
assessed
tax
for
1986
and
1987
under
authority
of
subsection
152(7)
of
the
Income
Tax
Act
this
does
not
relieve
you
of
the
responsibility
to
file
Returns
for
those
years.
A
third
letter,
dated
December
27,1989,
referred
to
in
the
applicant's
[sic]
memorandum
of
fact
and
law
at
paragraph
4,
wherein
the
Minister
advised
the
applicant
that
the
Minister
did
not
"propose
to
issue
reassessments
at
this
time,”
should
also
be
noted.
Counsel
for
the
applicant
states
that
the
letters
of
February
2,
1989,
and
July
10,
1989,
represent
a
"concrete
indication
from
the
respondent
that
there
will
be
a
new
reassessment."
He
states
that
this
alleged
possibility
of
a
new
reassessment
and,
hence,
the
possibility
of
another
right
to
object,
is
sufficient
to
maintain
the
within
application.
Counsel
for
both
parties
have
made
reference
during
argument
to
a
decision
of
the
Tax
Review
Board,
Russell
v.
M.N.R.,
[1977]
C.T.C.
2473;
77
D.T.C.
334,
particularly
the
following
statement
of
Board
Member,
Mr.
Dubrule,
at
page
2479
(D.T.C.
339):
The
Minister,
in
the
words
of
subsection
152(2),
.
.shall
assess
the
tax.
.
.-
payable”.
To
me
that
clearly
means
the
tax
as
computed
by
the
Minister
in
accordance
with
the
provisions
of
the
Income
Tax
Act
and
any
other
relevant
statute.
This
would
appear
to
be
the
duty
imposed
on
the
Minister
by
the
Income
Tax
Act
and
it
is
incumbent
upon
him
to
perform
that
duty
if
he
may
reassess
within
the
limits
imposed
by
the
Act.
Not
only
should
he,
but
he
must
correct
assessing
errors
by
reassessment
if
he
knows
of
them.
Assuming
(without
deciding)
that
that
which
he
did
in
this
case
was
correcting
errors,
then
the
reassessments
were
not"
unfair
and
unreasonable
treatment”
by
the
Minister.
In
Russell,
the
taxpayer
had
appealed
an
adverse
ruling
on
his
notice
of
objection.
The
taxpayer
had
been
served
three
notices
of
reassessment
in
one
year
and
the
issue
before
the
Tax
Review
Board
was
whether
the
reassessments
were
”
unfair
and
unreasonable”
treatment
by
the
Minister.
The
applicant
argues
that
the
letters
referred
to
above
provide
clear
evidence
from
the
Minister’s
own
officials
that
evidence
of
an
error
has
been
discovered
and
therefore,
based
on
the
comments
of
Board
Member
Dubrule
in
Russell,
the
Minister
is
under
a
positive
duty
to
reassess.
However,
Board
Member
Dubrule’s
comments
must
be
considered
in
the
light
of
the
issue
before
him.
Consequently,
the
decision
in
Russell
cannot
be
extended
to
impose
a
positive
duty
upon
the
Minister
to
reassess
as
has
been
alleged
by
the
applicant.
The
decision
rather
is
limited
to
the
proposition
that
if
the
Minister
has
a
reasonable
basis
upon
which
to
reassess
and
he
does
so,
such
action
is
not
unfair
or
unreasonable.
Counsel
for
the
respondent
has
also
drawn
to
my
attention
a
number
of
cases
that
support
the
proposition
that
the
Crown
is
not
bound
by
"undertakings"
or
"indications"
given
by
its
officers.
In
No.
358
v.
M.N.R.
(1956),
16
Tax
A.B.C.
14;
56
D.T.C.
466,
the
Tax
Appeal
Board
stated
at
page
17
(D.T.C.
468):
It
has
been
observed
more
than
once
in
reasons
for
judgment
issued
by
the
Board
that
the
Crown
is
not
estopped
by
opinions
set
out
in
any
departmental
report
or
letter
by
any
of
its
officers
or
servants.
Where
that
has
been
written
is
found
later
to
be
incorrect,
a
Minister
is
at
liberty
to
proceed
as
though
it
were
not
even
on
record:
The
King
v.
Capital
Brewing
Co.
Ltd.
(1932),
Ex.
C.R.
171,
at
p.
182.
Similarly,
in
Humphrey
Gilbert
v.
M.N.R.,
[1970]
Tax
A.B.C.
1285;
71
D.T.C.
13,
Tax
Appeal
Board
Member,
Mr.
W.O.
Davis,
commented
at
page
1287
(D.T.C.
15):
Regardless
of
what
information
was
given
to
the
appellant
by
the
Minister's
officials,
the
Minister
is
not
obliged
to
apply
the
provisions
of
the
Income
Tax
Act,
as
enacted
by
Parliament
and,
regrettable
though
it
may
seem
to
the
appellant,
I
know
of
no
provision
of
the
Act
which
would
permit
me
to
deal
with
the
assessment
other
than
in
a
manner
that
is
already
adopted
by
the
Minister.
After
having
examined
the
arguments
put
forward
by
the
taxpayer,
I
find
that
I
am
unable
to
accept
his
submissions.
There
is
no
basis
in
law
to
support
the
submission
that
the
Minister
is
bound
by
the
indications
of
his
officers,
or
his
own
indications
for
that
matter,
that
he
intends
to
reassess.
A
reassessment
is
a
process
undertaken
by
the
Minister
that
culminates
in
a
notice
of
reassessment.
The
process
is
not
reviewable
until
the
notice
is
sent
to
the
taxpayer
and
it
is
only
reviewable
if
a
notice
of
objection
is
filed
by
the
taxpayer
within
a
statutorily
prescribed
period
of
time
unless
the
Tax
Court
grants
the
taxpayer
an
extension.
In
any
event,
this
right
does
not
pre-exist
the
notice
of
reassessment.
The
applicant
taxpayer,
therefore,
cannot
rely
on
indications
that
a
reassessment
may
take
place
to
argue
that
a
reassessment
must
follow,
for
two
reasons:
first,
that
such
indications
cannot
otherwise
bind
the
Minister;
and
second,
that
the
applicant's
statutory
rights
do
not
arise
unless
and
until
a
notice
of
reassessment
is
given.
Counsel
for
the
applicant
has
agreed
that
I
am
unable
to
direct
the
Minister
to
reassess
and
I
am
of
the
opinion
that
Russell
does
not
extend
the
Minister's
duty
to
reassess.
Finally,
it
now
appears
that
the
special
collection
procedures
invoked
by
the
Minister
are
no
longer
necessary.
Since
the
Tax
Court
has
denied
the
applicant
an
extension
to
file
notices
of
objection,
the
time
period
limitations
are
conclusively
exhausted
and
the
Minister
has
no
statutory
restrictions
preventing
him
from
taking
action
to
realize
on
the
unpaid
tax
liability.
The
rationale
for
the
ministerial
direction
no
longer
exists
and
the
within
application
to
vacate
the
ministerial
direction
should
be
dismissed.
Accordingly,
the
relief
sought
by
the
respondent
is
granted,
the
applicant's
within
application
under
subsection
225.2(2)
of
the
Income
Tax
Act
is
dismissed,
and
the
partial
stay
imposed
by
Madame
Justice
Reed
is
removed.
The
accumulated
sheriff's
storage
costs
will
be
added
to
the
balance
of
the
taxpayer's
outstanding
tax
liability,
however,
in
accordance
with
subsection
225.2(8)
of
the
Income
Tax
Act,
costs
will
not
be
awarded.
Respondent's
relief
granted.
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