This
appeal
has
been
brought
by
the
Royal
Bank
from
those
decisions.
The
Director
of
Employment
Standards
is
not
a
party
to
the
appeal,
and
apparently
an
agreement
has
been
made
which
will
permit
the
Director's
entitlement,
if
any,
to
be
determined
under
the
agreement
once
the
respective
entitlements,
if
any,
of
the
Federal
Crown
and
the
Royal
Bank
have
been
decided.
The
first
issue:
the
effect
of
the
writs
of
fieri
facias
Section
223:
The
Governing
Section
of
the
Income
Tax
Act
Section
223
of
the
Income
Tax
Act
deals
with
the
certification
of
amounts
payable
under
the
Act,
and
with
the
effect
of
such
a
certification
and
certificate.
At
the
relevant
time,
section
223
read:
223.
(1)
An
amount
payable
under
this
Act
that
has
not
been
paid
or
such
part
of
an
amount
payable
under
this
Act
as
has
not
been
paid
may
be
certified
by
the
Minister
(a)
where
there
has
been
a
direction
by
the
Minister
under
subsection
158(2),
forthwith
after
such
direction,
and
(b)
otherwise,
upon
the
expiration
of
30
days
after
the
default.
(2)
On
production
to
the
Federal
Court
of
Canada,
a
certificate
made
under
this
section
shall
be
registered
in
the
Court
and
when
registered
has
the
same
force
and
effect,
and
all
proceedings
may
be
taken
thereon,
as
if
the
certificate
were
a
judgment
obtained
in
the
said
Court
for
a
debt
of
the
amount
specified
in
the
certificate
plus
interest
to
the
day
of
payment
as
provided
for
in
this
Act.
(3)
All
reasonable
costs
and
charges
attendant
upon
the
registration
of
the
certificate
are
recoverable
in
like
manner
as
if
they
had
been
certified
and
the
certificate
had
been
registered
under
this
section.
[Emphasis
added.]
The
section
does
not
make
a
certificate
into
a
judgment.
Nor
does
it
provide
that
a
certificate
is
to
be
deemed
to
be
a
judgment.
What
it
does
is
say
that
a
certificate
has
the
same
force
and
effect
as
if
it
were
a
judgment
and
that
all
proceedings
may
be
taken
under
the
certificate
as
if
it
were
a
judgment.
See
Hongkong
Bank
of
Canada
v.
The
Queen
(1989),
58
D.L.R.
(4th)
385
at
390,
36
B.C.L.R.
(2d)
373
at
378.
In
my
opinion
that
means
that
the
certificate
may
be
enforced
in
all
respects
as
if
it
were
a
judgment
of
the
Federal
Court.
The
Authority
for
the
Writ
of
fieri
facias
Rule
1900(1)
of
the
Federal
Court
Rules
deals
with
the
enforcement
of
judgments
of
the
Court.
It
reads:
1900
(1):
Subject
to
the
provisions
of
the
Rules,
a
judgment
or
order
for
the
payment
of
money,
not
being
a
judgment
or
order
for
the
payment
of
money
into
court,
may
be
enforced
by
one
or
more
of
the
following
means,
that
is
to
say,
(a)
writ
of
fieri
facias;
(b)
garnishee
proceedings;
(c)
a
charging
order;
(d)
the
appointment
of
a
receiver;
(e)
in
a
case
in
which
Rule
1903
applies,
an
order
of
committal;
(f)
in
such
a
case,
a
writ
of
sequestration.
In
my
opinion
the
registration
of
the
two
certificates
in
the
Federal
Court
authorized
the
issuance
of
the
two
writs
of
fieri
facias.
The
Federal
Court
Statutory
Law
of
Execution
The
effect
of
the
two
writs
of
fieri
facias
in
the
hands
of
the
sheriff
of
Victoria
must
be
determined
under
subsection
56(3)
of
the
Federal
Court
Act,
which
reads:
56.
(3)
All
writs
of
execution
or
other
process
against
property,
as
well
those
prescribed
by
the
Rules
as
those
hereinbefore
authorized,
shall,
unless
otherwise
provided
by
the
Rules,
be
executed,
as
regards
the
property
liable
to
execution
and
the
mode
of
seizure
and
sale,
as
nearly
as
possible
in
the
same
manner
as
the
manner
in
which
similar
writs
or
process,
issued
out
of
the
superior
courts
of
the
province
in
which
the
property
to
be
seized
is
situated,
are,
by
the
law
of
that
province,
required
to
be
executed;
and
such
writs
or
process
shall
bind
property
in
the
same
manner
as
such
similar
writs
or
process,
and
the
rights
of
purchasers
thereunder
are
the
same
as
those
of
purchasers
under
such
similar
writs
or
process.
[Emphasis
added.]
Subsection
56(3)
is
a
provision
in
a
federal
statute.
It
provides
for
execution
on
a
judgment
of
the
Federal
Court,
itself
established
under
a
federal
statute
pursuant
to
the
power
conferred
by
section
101
of
the
Constitution
Act,
1867,
which
reads:
The
Parliament
of
Canada
may,
notwithstanding
anything
in
this
Act,
from
time
to
time
provide
for
the
constitution,
maintenance,
and
organization
of
a
General
Court
of
Appeal
for
Canada,
and
for
the
establishment
of
any
additional
Courts
for
the
better
administration
of
the
laws
of
Canada.
Subsection
56(3)
does
not
purport,
on
its
face,
to
integrate
the
federal
system
of
writs
of
execution
with
the
provincial
systems.
There
may
well
be
constitutional
impediments
to
doing
so.
Instead,
it
provides
for
a
federal
system
which
is
parallel
with
and
similar
to
the
various
provincial
systems
in
four
respects,
namely,
the
property
liable
to
execution,
the
mode
of
seizure
and
sale,
the
way
property
is
bound
by
a
writ,
and
the
rights
of
purchasers.
Subsection
56(3)
is
not
couched
in
language
which
would
be
appropriate
if
the
provincial
systems
of
execution
were
to
be
adopted
as
the
federal
system,
by
reference.
In
that
respect
it
is
helpful
to
compare
subsection
56(3)
with
subsection
38(1)
of
the
Federal
Court
Act
which
deals
with
limitation
of
actions.
Subsection
38(1)
reads:
Except
as
expressly
provided
by
any
other
Act,
the
laws
relating
to
prescription
and
the
limitation
of
actions
in
force
in
any
province
between
subject
and
subject
apply
to
any
proceedings
in
the
Court
in
respect
of
any
cause
of
action
arising
in
such
province,
and
a
proceeding
in
the
Court
in
respect
of
a
cause
of
action
arising
otherwise
than
in
a
province
shall
be
taken
within
and
not
after
six
years
after
the
cause
of
action
arose.
[Emphasis
added.]
Subsection
38(1)
makes
provincial
limitation
laws
apply
in
actions
in
the
Federal
Court.
But
that
is
not
what
is
done
by
subsection
56(3).
Instead
of
incorporating
provincial
execution
laws
as
federal
laws,
by
reference,
a
task
which
might
well
be
constitutionally
daunting
because
of
questions
of
priorities,
subsection
56(3)
establishes
a
federal
execution
law
for
Federal
Court
executions.
That
federal
execution
law
is
like
provincial
laws
in
the
four
stated
respects,
but
it
is
not
provincial
law
incorporated
as
federal
law,
but
rather
a
separate
federal
system
of
execution
law.
The
two
writs
of
fieri
facias
in
this
case
were
therefore
issued
under
the
federal
system
and
came
into
the
hands
of
the
sheriff
for
execution
under
the
federal
system.
He
seized
the
property
under
the
federal
system
and
he
sold
it
under
the
federal
system.
That
process
was
entirely
completed
before
any
writ
of
seizure
and
sale
issued
by
the
Royal
Bank
came
into
the
sheriff's
hands
under
the
provincial
system.
The
Existence
of
a
Federal
Common
Law
of
Execution
In
my
opinion
there
must
be
a
federal
common
law
which
governs
federal
executions
in
the
gaps
that
are
not
covered
by
the
statutory
provisions
set
out
in
subsection
56(3)
of
the
Federal
Court
Act.
As
authority
for
the
propositions
that
there
can
be
a
federal
common
law,
and
that
such
a
federal
common
law
is
part
of
"the
laws
of
Canada"
for
the
purposes
of
the
jurisdiction
of
the
Federal
Court,
I
rely
on
Roberts
v.
Canada,
[1989]
1
S.C.R.
322,
57
D.L.R.
(4th)
197,
particularly
at
pages
339-40,where,
in
a
unanimous
judgment
for
a
five-judge
division
of
the
Supreme
Court
of
Canada,
Madam
Justice
Wilson
decided
that
the
Federal
Court
had
jurisdiction
in
a
dispute
between
two
Indian
bands
because
both
the
Indian
Act
and
the
common
law
of
aboriginal
title
which
underlies
the
fiduciary
obligations
of
the
Crown
to
Indian
bands
are
"laws
of
Canada"
and
that
they
are
federal
laws
for
the
purposes
of
the
jurisdiction
of
the
Federal
Court
as
established
under
section
101
of
the
Constitution
Act,
1867.
If
the
law
in
relation
to
aboriginal
title
when
dealt
with
in
a
federal
context
is
federal
common
law
then
I
think
that
the
law
of
execution
of
a
Federal
Court
judgment
is
also
federal
common
law.
In
my
opinion
the
decisions
of
the
Supreme
Court
of
Canada
in
Quebec
North
Shore
Paper
Co.
v.
Canadian
Pacific
Ltd.,
[1977]
2
S.C.R.
1054,
[1978]
C.T.C.
628,
78
D.T.C.
6426,
McNamara
Construction
v.
The
Queen,
[1977]
2
S.C.R.
654,
75
D.L.R.
(3d)
273,
The
Queen
v.
Thomas
Fuller
Construction,
[1980]
1S.C.R.
695,
106
D.L.R.
(3d)
193
and
R.
W.D.S.U.
v.
Dolphin
Delivery
Ltd.,
[1986]
2
S.C.R.
573,33
D.L.R.
(4th)
174,
to
the
extent
that
they
might
be
thought
to
deny
the
existence
of
federal
common
law,
must
be
regarded
as
explained
and,
if
it
were
thought
necessary,
overruled
by
the
Roberts
case.
The
Substance
of
the
Relevant
Federal
Common
Law
of
Execution
Under
the
common
law
of
England,
the
goods
seized
under
a
writ
of
fieri
facias
or
an
equivalent
writ
remained
the
property
of
the
person
from
whom
they
were
seized,
after
the
seizure,
until
they
were
sold.
But
once
they
were
sold
they
became
the
property
of
the
purchaser
and
the
proceeds
of
sale
became
impressed
with
the
proprietary
interest
of
the
judgment
creditor
at
whose
instance
the
goods
had
been
sold.
The
proceeds
of
sale
never
became
the
property
of
the
judgment
debtor
from
whom
the
goods
had
been
seized.
In
this
connection
see
Giles
v.
Grover,
[1824-34]
All
E.R.
547,
particularly
Alderson,
J.
at
page
557
and
Lord
Tenterden,
C.J.
at
pages
568-9.
This
is
what
Alderson,
J.
had
to
say
at
page
557:
From
these
premises,
two
propositions
seem
to
me
to
follow—first,
that
at
no
period
of
time
at
all
does
the
execution
creditor
obtain
any
property
whatsoever
in
the
goods
themselves,
and,
secondly,
that
the
general
property
in
the
goods
seized
remains,
until
the
sale,
in
the
debtor,
and
is
not
changed
by
the
seizure:
Milton
v.
Eldrington.
After
the
sale
the
case
is
very
different,
for,
by
the
sale,
the
property
is
wholly
changed
from
the
debtor
to
the
vendee
of
the
sheriff,
and
the
money,
the
produce
of
the
goods,
then
becomes
the
property
of
the
creditor,
for
which
he
may
maintain
an
action
for
money
had
and
received
and
for
which
the
sheriff
is
responsible
to
him,
the
original
debtor
being
then
wholly
and
finally
discharged:
Perkinson
v.
Gilford.
The
rule
is
thus
expressly
laid
down
by
Garrow,
B.,
in
delivering
the
opinion
of
the
court
after
full
consideration
in
Higgins
v.
M'Adam
(3
Y.
&
J.
at
page
13):
The
rule
is,
that
when
execution
is
executed,
the
property
is
changed;
and
execution
is
said
to
be
executed
when
a
sale
has
taken
place.
[Emphasis
added.]
I
have
been
unable
to
find
any
suggestion
in
the
decided
cases,
in
the
commentaries,
or
in
the
Law
Reform
reports
to
suggest
that
Giles
v.
Grover
is
no
longer
a
sound
expression
of
the
common
law,
as
opposed
to
the
statute
law,
of
execution
against
chattels.
Indeed
it
was
followed
and
applied
by
Mr.
Justice
Spencer
in
the
Supreme
Court
of
British
Columbia
in
A.G.
Canada
v.
Skeena
(1984),
52
B.C.L.R.
142.
Application
of
the
Federal
Law
of
Execution
to
this
Case
In
this
case
the
deputy
sheriff
had
seized
the
goods
and
chattels
of
International
Electronics
Corporation
under
the
two
writs
of
fieri
facias
issued
from
the
Federal
Court
at
the
instance
of
Revenue
Canada.
He
had
entirely
sold
those
goods
and
chattels
before
the
writ
of
execution
issued
from
the
Supreme
Court
of
British
Columbia
at
the
instance
of
the
Royal
Bank
came
into
his
hands.
It
is
my
opinion
that
when
the
sheriff
received
the
Royal
Bank
writ
there
were
no
longer
any
goods
or
chattels
or
funds
which
belonged
to
International
Electronics
Corporation
against
which
the
sheriff
could
levy
under
the
Royal
Bank's
writ.
For
those
reasons
it
is
my
opinion
that,
subject
to
the
arguments
under
the
Charter
and
the
Bill
of
Rights
to
which
I
am
about
to
turn,
the
entire
proceeds
of
the
execution
by
the
sheriff
which
are
now
held
in
the
interest
bearing
trust
account
are
or
would
be
funds
on
which
the
Royal
Bank
has
or
would
have
no
claim.
Two
Further
Observations
I
wish
to
add
two
observations.
My
first
observation
is
that
it
follows
from
the
ground
on
which
my
decision
on
this
issue
rests
that
it
is
not
necessary
to
explore
the
difficult
questions,
which
were
fully
argued
before
us,
relating
to
the
Crown
prerogative
to
be
paid
in
priority
to
the
subject
if
the
claim
of
the
Crown
and
the
claim
of
the
subject
are
of
equal
degree.
I
do
not
propose
to
do
so.
My
second
observation
is
that
I
feel
sure
that
the
conclusion
I
have
reached
reveals
a
whole
new
range
of
difficulty
and
complexity
about
the
priorities
between
the
rights
of
the
federal
Crown
on
the
one
hand
and
the
rights
of
the
provincial
Crown
and
the
subjects
of
the
Crown
on
the
other
hand.
I
suppose
that
some
of
the
direct
conflicts
between
rights
arising
under
federal
legislation
and
rights
arising
under
provincial
legislation
may
be
resolved
by
Multiple
Access
v.
McCutcheon,
[1982]
2
S.C.R.
161,
138
D.L.R.
(3d)
1.
But
I
see
no
opening
for
the
federal
Crown
to
accommodate
itself
to
the
Creditor
Assistance
Act
of
British
Columbia
and
to
obtain
the
benefits
of
the
Creditor
Assistance
Act's
proportional
recovery
system,
or
to
allow
other
creditors
to
do
so,
(even
if
the
federal
Crown
were
to
prefer
that
system
for
settling
priorities),
except
by
the
federal
Crown
starting
its
proceedings
from
the
beginning
in
the
provincial
system.
There
is
no
need
to
say
any
more
on
this
point
and
I
will
not
do
so.
The
second
issue:
unreasonable
seizure
Section
8
of
the
Charter
Section
8
of
the
Charter
reads:
Everyone
has
the
right
to
be
secure
against
unreasonable
search
or
seizure.
Counsel
for
the
Royal
Bank
argued
that
the
statutory
scheme
for
enforcing
the
Income
Tax
Act
based
on
a
certificate
made
by
a
tax
official,
of
which
the
taxpayer
may
have
been
given
no
notice,
and
enforcement
proceedings
on
the
certificate,
of
which
again
the
taxpayer
may
have
been
given
no
notice,
is
a
scheme
which
authorizes
unreasonable
seizures,
contrary
to
section
8
of
the
Charter.
For
that
reason,
counsel
for
the
Royal
Bank
argued
that
subsection
223(2)
of
the
Income
Tax
Act,
which
provided
for
the
certificates
on
which
the
scheme
rests,
and
for
their
enforcement
as
judgments,
should
be
declared
to
be
unconstitutional.
The
Statutory
Enforcement
Scheme
Part
XV
of
the
Income
Tax
Act
deals
with
administration
and
enforcement.
I
will
mention
the
provisions
which
were
in
effect
at
the
relevant
time.
Section
222
makes
income
tax
a
debt
to
the
Crown,
recoverable
in
the
Federal
Court
or
in
any
other
court
of
competent
jurisdiction.
Section
223
provides
that
the
Minister
may
certify
an
amount
that
is
payable
under
the
Act
and
has
not
been
paid,
and
that
the
certificate
may
be
registered
in
the
Federal
Court
and
enforced
as
a
judgment
of
that
Court.
For
convenience
of
reference
I
will
set
out
subsection
223(2)
again:
On
production
to
the
Federal
Court
of
Canada,
a
certificate
made
under
this
section
shall
be
registered
in
the
Court
and
when
registered
has
the
same
force
and
effect,
and
all
proceedings
may
be
taken
thereon,
as
if
the
certificate
were
a
judgment
obtained
in
the
said
Court
for
a
debt
of
the
amount
specified
in
the
certificate
plus
interest
to
the
day
of
payment
as
provided
for
in
this
Act.
[Emphasis
added.]
Section
224
provides
for
garnishment;
section
224.1
for
recovery
by
deduction.
Neither
of
those
sections
provides
for
notice
to
the
taxpayer
of
the
proposed
enforcement
action.
They
do
not
depend
on
a
judgment
or
even
on
a
certificate
that
has
the
effect
of
a
judgment.
Section
225
provides
for
seizure
of
chattels.
By
contrast
to
section
224
and
section
224.1,
it
requires
that
30
days'
notice
must
be
given
to
the
taxpayer
by
registered
mail
of
the
Minister's
intention
to
make
the
seizure.
Sections
225.1
and
225.2
stipulate
that
the
Minister
cannot
invoke
the
enforcement
provisions
I
have
summarized
until
90
days
have
elapsed
after
the
day
of
mailing
to
the
taxpayer
of
the
notice
of
assessment
unless
the
Minister
considers
that
the
enforcement
could
be
jeopardized
by
the
delay.
Ninety
days
is,
of
course,
also
the
period
within
which
the
taxpayer
may
object
to
the
assessment.
The
first
significant
point
to
note
about
the
scheme
is
that
notice
is
given
to
the
taxpayer
by
registered
mail
of
the
assessment,
but
that
thereafter
no
notice
is
required
to
be
given
to
the
taxpayer
of
any
enforcement
action
that
is
contemplated
unless
the
contemplated
action
is
a
seizure
of
chattels
under
section
225,
in
which
case
30
days'
notice
must
be
given.
The
second
significant
point
is
that
the
requirement
of
notice
before
seizure
of
chattels
can
be
avoided
by
making
a
certificate
and
then
causing
a
writ
of
fieri
facias
to
be
issued
and
delivered
to
the
sheriff
for
execution.
So
the
Act
itself
sets
out
the
path
whereby
its
very
own
notice
provision
in
relation
to
seizure
of
chattels
may
be
defeated.
Was
This
a
"Seizure"
for
the
Purposes
of
Section
8
of
the
Charter?
Counsel
for
the
Crown
argued
that
a
seizure
from
International
Electronics
Limited
to
enforce
an
income
tax
obligation
was
not
a
seizure
to
which
section
8
of
the
Charter
would
apply,
because
section
8
was
limited
to
seizures
to
obtain
evidence
which
might
be
used
to
incriminate
a
person
in
proceedings
where
liberty
or
security
of
the
person
was
at
risk.
Counsel
relied
on
The
Queen
v.
Werhun,
[1991]
2
W.W.R.
344,
62
C.C.C.
(3d)
440,
a
decision
of
the
Manitoba
Court
of
Appeal.
I
regard
that
aspect
of
the
decision
in
Werhun,
and
perhaps
other
points
made
in
the
same
segment
of
the
reasons,
as
being
obiter
dicta;
but
whether
that
is
so
or
not
I
would
not
make
a
similar
limitation
on
the
rights
protected
by
section
8
of
the
Charter.
Thomson
Newspapers
Limited
v.
Director,
Combines
Investigation,
[1990]
1
S.C.R.
425,
67
D.L.R.
(4th)
161
establishes
that
the
concept
of
seizure
in
section
8
consists
of
taking
hold
by
a
public
official
of
a
thing
belonging
to
a
person
against
the
person's
will.
See
particularly
at
pages
494-95,
505,
596,
and
610
(S.C.R.).
In
my
opinion,
the
taking
of
the
goods
of
International
Electronics
Corporation
by
the
sheriff
was
a
seizure
within
the
meaning
of"
seizure”
in
section
8
of
the
Charter.
Was
it
a
Seizure
that
Might
be
"Unreasonable"?
In
my
opinion
the
seizure
of
chattels
under
the
Income
Tax
Act
without
any
notice
to
the
taxpayer
of
an
intention
to
seize
the
chattels
and
without
giving
the
taxpayer
reasonable
time,
following
the
notice,
to
discharge
the
tax
debt,
in
circumstances
where
there
is
no
reasonable
ground
for
a
belief
that
the
taxpayer
intends
to
avoid
the
payment
of
the
tax
debt,
may
constitute
an
unreasonable
course
of
conduct
and
an
unreasonable
seizure.
The
same
is
true
of
garnishment
of
wages
and
recovery
by
deduction
under
the
enforcement
scheme
of
the
Act
since
they
are
equally
within
the
definition
of
"seizure"
on
which
I
I
rely.
I
think
that
the
principle
in
Lister
v.
Dunlop,
[1982]
1
S.C.R.
726,
135
D.L.R.
(3d)
1,
that
a
person
from
whom
a
seizure
is
being
made
under
a
security
instrument
is
entitled
to
receive
such
notice
of
the
proposed
seizure
as
is
reasonable
in
the
circumstances,
is
a
principle
that
is
not
confined
to
security
instruments
but
applies
to
all
seizures
under
contract
and
to
all
seizures
under
a
statutory
scheme
that
does
not
specifically
provide
otherwise,
unless
the
person
on
whose
behalf
the
seizure
is
made
has
first
obtained
a
trial
judgment
under
court
processes
that
contemplate
the
giving
of
notice
of
the
proceedings
to
the
person
from
whom
the
goods
are
to
be
seized.
That
principle
was
applied
to
a
security
instrument
in
Waldron
v.
Royal
Bank
(1991),
53
B.C.L.R.
(2d)
294,
78
D.L.R.
(4th)
1
and
the
extent
of
the
applicability
of
the
principle
was
discussed
in
that
case
at
pages
299-300
(B.C.L.R.).
In
Salituro
v.
The
Queen,
[1991]
3
S.C.R.
654,
68
C.C.C.
(3d)
289
the
Supreme
Court
of
Canada
emphasized
that
the
Charter
must
stimulate
and
guide
incremental
developments
in
the
common
law,
and
that
concept
is
reflected
in
the
passage
in
Waldron
which
I
have
mentioned.
A
person
who
is
subject
to
a
seizure
may
well
suffer
losses
far
in
excess
of
the
amount
of
the
debt
that
is
discharged
through
the
seizure.
Those
losses
may
extend
beyond
the
direct
value
of
the
goods
seized
and
may
extend
to
injury
to
reputation
and
credit.
The
process
of
seizure
is
therefore
likely
to
involve
a
serious
invasion
of
a
reasonable
expectation
of
privacy.
See
Hunter
v.
Southam,
[1984]
2
S.C.R.
145,
11
D.L.R.
(4th)
641
per
Dickson,
C.J.
at
page
159
(S.C.R.).
It
is
for
that
reason
that
the
Canadian
Charter
of
Rights
and
Freedoms
guarantees
the
right
to
be
secure
against
unreasonable
seizures.
So
I
do
not
believe
that
the
state
should
seize
the
goods
of
a
subject
in
circumstances
where
the
subject
might
well
be
expected
to
discharge
his
debt
to
the
state
voluntarily
if
he
knew
that
if
he
did
not
do
so
within
a
short
period
he
might
be
subject
to
such
a
seizure.
A
seizure
in
those
circumstances,
is
likely,
in
my
opinion,
to
be
unreasonable.
The
30-day
notice
provision
in
section
225
reflects
the
adoption
by
Parlia-
ment
of
the
concept
that
there
should
be
adequate
notice
to
the
taxpayer
before
a
seizure
of
goods.
And,
of
course,
there
should
be
a
method
of
dispensing
with
notice
when
an
impartial
process
leads
to
a
conclusion
that
the
giving
of
notice
would
be
likely
to
thwart
the
collection
of
the
tax
debt.
I
do
not
consider
that
section
225.1,
which
was
enacted
in
1985,
and
which
provides
for
a
postponement
of
collection
action
while
an
assessment
is
being
disputed,
meets
the
same
purpose
as
would
be
met
by
a
provision
for
notice
before
seizure.
So
I
consider
that
because
of
the
absence
of
any
notice
to
International
Electronics
Corporation
of
the
intention
to
make
and
register
a
certificate,
or
of
the
intention
to
issue
a
writ
of
fieri
facias
and
to
deliver
it
to
the
sheriff
with
instructions
to
make
a
seizure,
there
is
a
genuine
question
raised
by
this
appeal
about
whether
the
statutory
scheme
which
permits
such
a
seizure
is
unconstitutional
under
section
8
of
the
Charter.
In
this
case
we
are
not
being
asked
whether
the
specific
seizure
is
unreasonable
and,
as
such,
results
in
an
unconstitutional
application
of
a
constitutional
provision.
Rather,
we
are
being
asked
to
declare
that
subsection
223(2)
of
the
Income
Tax
Act
itself
is
unconstitutional
as
being
contrary
to
section
8
of
the
Charter.
The
fact
that
the
seizure
in
this
case
is
of
the
type
that
might
be
unreasonable
and
that
it
occurred
in
the
ordinary
administration
of
the
Act
is
the
only
determination
which
need
be
made
at
this
point.
The
Standing
of
the
Royal
Bank
and
the
Remedies
the
Bank
May
Seek
The
bank
is
a
person
directly
affected
by
the
seizure
in
this
case.
If
the
seizure
took
place
under
an
unconstitutional
enactment
then
in
my
opinion,
under
the
normal
rules,
the
bank,
as
a
person
directly
affected
by
an
application
of
the
enactment,
has
standing
to
challenge
its
constitutionality.
In
reaching
that
conclusion
I
rely
on
Thorson
v.
Attorney
General
of
Canada,
[1975]
1
S.C.R.
138,
43
D.L.R.
(3d)
1;
The
Nova
Scotia
Board
of
Censors
v.
McNeil,
[1976]
2
S.C.R.
265,
55
D.L.R.
(3d)
632;
The
Minister
of
Justice
of
Canada
v.
Borowski,
[1981]
2
S.C.R.
575,
57
D.L.R.
(4th)
231;
and
Canadian
Council
of
Churches
v.
The
Queen
(1992),
132
N.R.
241
(all
decisions
of
the
Supreme
Court
of
Canada).
The
recent
decision
of
the
Supreme
Court
of
Canada
in
The
Wholesale
Travel
Group
Inc.
v.
The
Queen,
[1991]
3
S.C.R.
154,
67
C.C.C.
(3d)
193,
which
deals
with
the
standing
of
a
corporation
to
challenge
the
constitutionality
under
the
Charter
of
a
statutory
provision
which,
in
its
terms,
applies
to
both
individuals
and
corporations,
confirms
that
the
bank
has
standing
in
this
case
even
though
the
challenge
to
the
constitutionality
of
subsection
223(2)
is
a
Charter
challenge
and
even
though
the
bank
is
a
corporation.
The
decision
of
the
Supreme
Court
of
Canada
in
The
Queen
v.
Goltz
(1991),
67
C.C.C.
(3d)
481
raises
some
new
issues
with
respect
to
standing
but
I
would
not
apply
that
decision
to
refuse
standing
to
the
Royal
Bank
in
this
case,
where
the
issue
of
standing
was
substantively
conceded
before
the
decision
in
the
Goltz
case
became
available.
The
bank
does
not
seek
any
remedy
based
on
the
manner
in
which
the
seizure
was
Carried
out,
including
the
fact
that
no
notice
was
given
to
International
Electronics
Corporation
before
the
certificate
having
the
effect
of
a
judgment
was
registered
in
the
Federal
Court,
and
including
the
fact
that
no
notice
was
given
to
International
Electronics
Corporation
before
the
writs
of
fieri
facias
were
issued
and
the
seizure
took
place.
If
the
bank
were
seeking
such
a
remedy
it
would
face
difficult
problems
in
showing
it
had
an
expectation
of
privacy
in
relation
to
the
chattels
of
its
customer
and
in
asserting
that
a
claim
could
be
made
by
a
corporation
with
respect
to
a
violation
of
a
section
8
right.
But
it
is
not
necessary
to
consider
those
questions
in
this
case.
So
the
bank's
claim
is
confined
to
a
request
for
a
declaration
that
subsection
223(2)
of
the
Income
Tax
Act
is
unconstitutional
because
it
authorizes
both
reasonable
seizures
and
unreasonable
seizures,
without
distinction.
“Reading
Down"
the
Legislative
Scheme
to
Retain
Constitutionality
Clearly
it
would
be
possible
to
devise
a
scheme
for
enforcement
of
income
tax
obligations
by
seizure
of
chattels
similar
to
the
certificate
provisions
in
subsection
223(2),
but
which
would
limit
the
scheme
to
circumstances
where
the
registration
of
the
certificate,
and
the
issuance
of
the
writ
of
fieri
facias,
and
the
seizure,
would
all
be
reasonable.
For
example,
such
a
limit
might
confine
the
scheme
to
cases
where
notice
had
been
given
to
the
taxpayer
of
the
imminence
of
the
seizure
if
payment
of
the
tax
obligation
was
not
made
promptly,
and
to
cases
where
it
was
established
by
a
process
involving
a
proper
measure
of
impartiality
that
such
a
notice
could
not
be
given
without
jeopardizing
the
prospects
of
enforcing
the
obligation.
In
my
opinion
it
is
not
the
proper
course
to
read
down
a
legislative
enactment,
which
is
in
some
applications
contrary
to
the
Charter,
by
devising
a
legislative
policy
which
would,
if
it
were
incorporated
in
the
scheme,
place
limits
on
the
scheme
such
that
the
scheme
would
become
constitutional,
and
then
to
treat
the
legislative
scheme
as
if
it
contained
those
limits
and
to
apply
it
only
within
those
limits.
In
this
connection
I
refer
to
the
decisions
of
the
Supreme
Court
of
Canada
in
Hunter,
supra,
at
pages
168-69,
and
The
Queen
v.
Seaboyer,
[1991]
2
S.C.R.
577,
66
C.C.C.
(3d)
321,
per
McLachlin,
J.
at
pages
403-05
(C.C.C.).
But
that
is
not
to
say
that
the
determination
of
constitutionality
must
be
made
in
relation
to
the
scheme
as
a
whole.
I
come
now
to
the
decision
of
the
Supreme
Court
of
Canada
in
Goltz,
supra.
A
Legislative
Scheme
Which
Authorizes
both
Constitutional
Applications
and
Unconstitutional
Applications
Because
judgment
was
handed
down
by
the
Supreme
Court
of
Canada
in
Goltz
after
this
appeal
was
argued,
we
asked
for
responsive
written
submissions
on
the
application
of
the
Goltz
case
to
this
appeal.
We
have
received
and
considered
those
submissions.
In
the
Goltz
case
the
majority
judgment
was
given
by
Mr.
Justice
Gonthier
for
himself
and
for
La
Forest,
L'Heureux-Dubé,
Sopinka,
Cory
and
lacobucci,
JJ.
Madam
Justice
McLachlin
gave
dissenting
reasons.
Chief
Justice
Lamer
and
Mr.
Justice
Stevenson
agreed
with
her.
The
Goltz
case
related
to
the
constitutionality
of
paragraph
88(1)(c)
of
the
Motor
Vehicle
Act
of
British
Columbia
which
makes
it
an
offence
to
drive
while
the
driver
is
prohibited
from
driving
under
any
one
of
four
sections
of
the
Act,
or
while
the
driver's
licence
is
suspended
under
any
one
of
six
sections
of
the
Act,
and
imposes
a
mandatory
minimum
sentence
of
seven
days'
imprisonment.
The
argument
on
behalf
of
Willy
Goltz
was
that
paragraph
88(1)(c)
was
contrary
to
section
12
of
the
Charter
because
in
some
fairly
common
situations
its
application
would
constitute
cruel
and
unusual
punishment
by
imposing
a
punishment
which
was
grossly
disproportionate
to
the
offence.
That
argument
was
successful
at
trial,
and
on
a
Crown
appeal
in
this
Court.
However,
it
was
rejected
by
the
majority
in
the
Supreme
Court
of
Canada.
The
majority
reasons
of
Mr.
Justice
Gonthier
confine
the
issue
of
constitutionality
to
the
precise
subparagraph,
namely
subparagraph
86(1)(a)(ii),
which
authorized
the
driving
prohibition
which
was
applied
to
Willy
Goltz
and
which
made
his
driving
an
infringement
of
subsection
88(1).
That
precise
subparagraph
was
the
one
which
allowed
the
superintendent
to
prohibit
a
person
from
driving
if
the
Superintendent
thought
that
the
person's
driving
record
was
unsatisfactory.
All
the
other
provisions
which
could
lead
to
prohibitions
or
to
licence
suspensions
were
said
not
to
be
in
issue
in
the
appeal
(page
490).
Consequently,
Mr.
Justice
Gonthier's
consideration
of
the
constitutionality
of
paragraph
88(1)(c)
under
section
12
of
the
Charter
was
specifically
limited
to
prohibitions
under
only
one
subparagraph
out
of
the
ten
sections
which
could
lead
to
driving
prohibitions
or
to
driver's
licence
suspensions.
Mr.
Justice
Gonthier
than
said
that
paragraph
88(1)(c)
could
only
be
unconstitutional
in
relation
to
an
application
to
a
person
prohibited
from
driving
under
paragraph
86(1)(a)(ii)
if
its
application
to
Willy
Goltz
himself
would
amount
to
cruel
and
unusual
punishment,
or
if
its
application
to
some
other
person
who
had
been
prohibited
from
driving
under
the
exact
same
provision
as
Willy
Goltz
in
"reasonable
hypothetical
circumstances"
would
amount
in
those
reasonable
hypothetical
circumstances"
to
cruel
and
unusual
punishment
(pages
496-97).
Mr.
Justice
Gonthier
considered
that
the
application
to
Willy
Goltz
himself
did
not
amount
to
cruel
and
unusual
punishment
because
in
his
particular
case
there
was
no
gross
disproportionality
between
the
punishment
and
the
offence
(page
497-503).
Willy
Goltz
had
a
thoroughly
bad
record
for
speeding,
had
been
prohibited
from
driving
by
the
Superintendent,
and
was
caught
speeding
once
again.
Mr.
Justice
Gonthier
considered
that
Willy
Goltz's
case
was
an
illustration
of
the
fact
that,
in
its
usual
applications,
the
imposition
of
punishment
under
paragraph
88(1)(c)
to
a
person
prohibited
from
driving
under
paragraph
86(1)(a)(ii)
because
of
a
bad
driving
record
would
not
result
in
grossly
disproportionate
punishment
(page
504).
He
concluded
that
there
was
no"
reasonable
hypothetical
circumstance”
in
which
seven
days'
imprisonment
would
be
a
grossly
disproportionate
punishment
for
a
person
who
had
been
prohibited
from
driving
because
of
a
poor
driving
record
(page
504-507).
Once
again,
Mr.
Justice
Gonthier
said
that
those
“reasonable
hypothetical”
cases
where
seven
days
imprisonment
would
be
imposed
for
driving
while
a
licence
had
been
suspended
for
a
failure
to
pay
for
a
licensing
examination
or
a
failure
to
pay
an
insurance
claim
were
of
no
relevance
to
the
constitutional
issue
to
which
the
Goltz
case
was
limited,
namely
the
disproportionality
of
the
punishment
for
Willy
Goltz
himself
or
for
a
person
who
had
been
prohibited
from
driving
for
the
very
same
reason
as
Willy
Goltz.
The
dissenting
reasons
of
Madam
Justice
McLachlin
indicate
that
in
her
opinion
Mr.
Justice
Gonthier’s
approach
severs
the
unconstitutional
applications
from
the
constitutional
applications
before
even
starting
on
a
consideration
of
whether
the
section
is
constitutional;
that
it
fails
to
answer
the
precise
constitutional
question
that
was
stated
by
the
Chief
Justice
as
being
the
constitutional
question
for
decision
in
the
Goltz
case;
that
it
reads
down
the
section
by
confining
it
to
constitutional
applications
by
imposing
limits
that
were
not
enacted
by
Parliament;
that
it
is
contrary
to
the
decision
of
the
Supreme
Court
of
Canada
in
Seaboyer,
supra;
and
that
it
leaves
the
section
in
the
statute
books
as
a
valid
section
when
it
is
valid
only
in
some
applications
and
not
in
others,
with
the
distinction
between
the
two
categories
being
impossible
to
recognize
by
an
examination
of
the
section
itself,
resulting
in
a
checkerboard
applicability
with
the
checkerboard
only
mistily
perceived.
And,
of
course,
it
follows
that
the
decisions
of
the
Supreme
Court
on
standing,
particularly
Thorson
and
McNeil,
supra,
may
not
be
applicable
in
cases
where
the
standing
is
asserted
to
challenge
the
constitutionality
of
a
provision
on
the
ground
that
the
provision
is
contrary
to
the
Charter,
if
the
challenge
is
made
by
a
person
who
relies
on
applications
of
an
enactment
in
reasonable
hypothetical
circumstances
which
are
not
closely
similar
to
that
person's
own
circumstances.
But
see
The
Queen
v.
Big
M
Drug
Mart
Ltd.,
[1985]
1
S.C.R.
295,
18
C.C.C.(3d)
385.
The
ratio
decidendi
of
the
reasons
of
Mr.
Justice
Gonthier
is
binding
on
this
Court.
The
Goltz
case
should
not
be
distinguished
in
this
Court
on
grounds
which
do
not
establish
a
true
distinction,
as,
for
example,
that
it
only
applies
where
the
counsel
defending
the
constitutionality
of
the
provision
has
confined
his
case
to
the
precise
application
arising
from
the
facts
of
his
own
case.
A
stronger
argument
could
be
made
for
distinguishing
the
Goltz
case
on
the
ground
that
its
scope
was
intended
to
be
limited
to
cases
arising
under
section
12
of
the
Charter.
It
is
difficult
to
conceive
that
cruel
or
unusual
punishment
could
ever
be
justified
in
a
free
and
democratic
society.
So
the
fact
that
section
1
is
most
unlikely
to
have
any
applicability
to
a
case
under
section
12
may
arguably
be
a
reason
for
giving
a
narrower
constitutional
focus
to
cases
under
section
12
than
is
given
to
cases
under
section
8.
However,
I
would
be
reluctant
to
apply
such
a
distinction
to
the
Goltz
case
until
the
Supreme
Court
of
Canada
itself
has
had
an
opportunity
to
discuss
the
relationship
of
the
decision
in
Goltz
to
its
decisions
in
other
cases.
In
my
opinion
the
ratio
of
Mr.
Justice
Gonthier's
decision
is
applicable
to
this
case
and
must
be
applied
to
this
case.
Application
of
the
Goltz
Decision
to
this
Case
In
this
case
subsection
223(2)
was
invoked
by
the
Accounting
&
Collections
Division
of
Revenue
Canada
as
a
method
of
enforcing,
by
seizure,
the
debt
owed
by
International
Electronics
Corporation
to
the
Crown
for
tax
assessed
under
Part
VIII
of
the
Income
Tax
Act.
Part
VIII
imposes
a
tax
equal
to
50
per
cent
of
the
total
amounts
designated
by
a
corporation
in
respect
of
a
share
or
debt
obligation
issued
by
it
in
a
year.
All
or
some
of
the
tax
may
become
refundable.
The
tax
under
Part
VIII
is
only
imposed
on
corporations
and
it
is
only
imposed
after
a
corporation
invites
its
imposition
by
making
a
designation
under
Part
VIII.
At
that
stage
the
corporation
knows,
from
the
amount
it
has
designated,
how
much
the
tax
is
going
to
be,
and
that
the
corporation
is
required,
under
subsection
195(2),
to
pay
the
tax
by
the
last
day
of
the
month
after
it
makes
its
designation.
In
this
case
the
total
of
the
amounts
designated
by
International
Electronics
Corporation
between
July
and
December,
1984
was
$65,000,000.
The
total
tax
payable
on
those
designated
amounts
was
50
per
cent
of
$65,000,000,
or
$32,500,000.
The
majority
reasons
for
judgment
in
the
Goltz
case
require
that
we
confine
our
consideration
of
the
constitutionality
of
subsection
223(2)
to
the
precise
circumstances
of
International
Electronics
Corporation
or
to
a
case
that
could
be
said
to
arise
through
a
similar
application
of
subsection
223(2)
in
''reasonable
hypothetical
circumstances"
to
a
corporation
which
had
made
a
designation
in
respect
of
a
share
or
debt
obligation
of
the
corporation
and
so
had
invoked
the
necessity
to
pay
Part
VIII
tax.
In
my
opinion,
on
that
narrow
application
of
subsection
223(2),
that
provision
is
not
unconstitutional
as
being
contrary
to
section
8
of
the
Charter,
which
provides
protection
against
unreasonable
seizures.
Where
the
corporation
acts
to
make
the
designation
which
results
in
the
assessment,
and
where
the
payment
must
be
made
in
the
month
after
the
month
in
which
the
designation
is
made,
a
seizure
for
persistent
or
continuing
non-payment
must
be
regarded
as
being
the
probable
consequence
of
invoking
the
Act
and
then
flouting
it.
Such
a
seizure
cannot
be
regarded
as
unreasonable.
The
situation
might
well
be
otherwise
where
the
seizure
is
founded
on
a
certificate
issued
under
subsection
223(2)
in
circumstances
where
the
taxpayer
is
an
individual
who
has
had
no
actual
notice
of
the
specific
possibility
of
seizure,
other
than
the
bare
assessment
of
tax.
The
Canadian
Bill
of
Rights
An
alternative
argument
was
made
on
behalf
of
the
Royal
Bank
to
the
effect
that
subsection
223(2)
of
the
Income
Tax
Act,
that
is,
the
same
certificate
provision
which
I
have
been
discussing
with
respect
to
constitutionality
under
the
Charter,
must
be
applied
under
section
2
of
the
Canadian
Bill
of
Rights
in
such
a
way
as
to
invalidate
the
seizure
by
the
sheriff
under
Revenue
Canada
writs
of
fieri
facias,
in
accordance
with
the
right
embodied
in
these
words
in
subsection
1(a)
of
the
Canadian
Bill
of
Rights:
1.
It
is
hereby
recognized
and
declared
that
in
Canada
there
have
existed
and
shall
continue
to
exist
without
discrimination
by
reason
of
race,
national
origin,
colour,
religion
or
sex,
the
following
human
rights
and
fundamental
freedoms,
namely,
(a)
the
right
of
the
individual
to
life,
liberty,
security
of
the
person
and
enjoyment
of
property,
and
the
right
not
to
be
deprived
thereof
except
by
due
process
of
law;
[Emphasis
added.]
The
right
to
the
enjoyment
of
property
recognized
and
confirmed
by
subsection
1(a)
of
the
Canadian
Bill
of
Rights
is
not
a
right
of
corporations
but
a
right
of
individuals.
Having
regard
to
the
reasons
for
judgment
of
the
majority
of
the
Supreme
Court
of
Canada
in
Goltz
and
notwithstanding
the
reasons
of
the
Supreme
Court
of
Canada
in
The
Wholesale
Travel
Group
Inc.
case,
supra,
I
would
not
apply
the
Bill
of
Rights
to
protect
the
right
of
a
corporation
to
the
enjoyment
of
property
just
because
an
individual
might
well
be
able
to
invoke
that
section
of
the
Bill
of
Rights
in
order
to
obtain
protection
from
an
unreasonable
seizure
under
a
certificate
made
under
subsection
223(2)
of
the
Income
Tax
Act.
Under
the
decision
of
the
Supreme
Court
of
Canada
in
The
Queen
v.
Drybones,
[1970]
S.C.R.
282,
[1970]
3
C.C.C.
355,
the
effect
of
the
infringement
of
a
provision
in
an
Act
of
the
Parliament
of
Canada
that
is
contrary
to
section
1
of
the
Canadian
Bill
of
Rights
is
that
the
infringing
section
is
inoperative.
The
offending
section
does
not
become,
by
the
infringement,
or
by
the
possibility
of
other
infringements,
unconstitutional.
In
those
circumstances,
it
seems
to
me
that
there
would
be
no
authority
for
applying
the
protection
and
recognition
given
to
the
right
of
individuals
to
the
enjoyment
of
property
by
subsection
1(a)
of
the
Canadian
Bill
of
Rights
to
the
protection
of
any
equivalent
right
of
a
corporation.
Disposition
I
have
concluded
that
the
seizure
under
the
writs
of
fieri
facias
issued
on
behalf
of
Revenue
Canada
was
entirely
completed,
by
the
sale
of
the
goods
seized,
by
the
time
the
Royal
Bank's
writ
came
into
the
hands
of
the
sheriff,
and
that
there
was
therefore
nothing
in
the
sheriff's
hands
to
which
the
Royal
Bank's
writ
could
attach.
The
proceeds
of
sale
were
already
the
property
of
the
Crown,
though
they
remained
in
the
hands
of
the
sheriff.
I
have
also
concluded
that
the
seizure
based
on
a
certificate
made
under
subsection
223(2)
of
the
Income
Tax
Act
is
not
unconstitutional
as
being
contrary
to
section
8
of
the
Charter
in
circumstances
where
the
tax
assessed
was
tax
assessed
on
a
corporation
under
Part
VIII
of
the
Income
Tax
Act.
Had
the
seizure
been
made
against
an
individual
for
tax
under
Part
I
of
the
Income
Tax
Act
without
specific
actual
notice
to
the
individual
of
the
imminent
possibility
of
such
a
seizure,
my
conclusion
might
well
have
been
different.
Such
a
seizure
might
well
be
unreasonable
and
contrary
to
section
8
of
the
Charter.
One
of
the
Crown's
writs
of
fieri
facias
was
issued
under
the
certificate
relating
to
the
assessment
of
$32,500,000
for
tax
under
Part
VIII
of
the
Income
Tax
Act.
The
other
writ
of
fieri
facias
was
based
on
a
certificate
for
$26,142.17
for
withholding
tax
under
Part
I
of
the
Income
Tax
Act.
Having
regard
to
the
legal
consequence
of
a
decision
that
the
seizure
under
the
writ
of
fieri
facias
resting
on
the
certificate
for
$32,500,000
was
constitutional,
effective,
and
complete,
there
is
no
purpose
to
be
served
in
undertaking
an
analysis
of
whether
the
certificate,
writ,
and
seizure
with
respect
to
the
tax
debt
of
$26,142.17
under
Part
I
of
the
Income
Tax
Act
were
contrary
to
section
8
of
the
Charter.
Finally,
I
have
concluded
that
the
seizure
against
International
Electronics
Corporation
with
respect
to
its
liability
for
Part
VIII
tax
and
flowing
from
the
certificate
issued
under
subsection
223(2)
of
the
Income
Tax
Act
was
not
contrary
to
subsection
1(a)
of
the
Canadian
Bill
of
Rights.
Accordingly,
I
would
dismiss
the
appeal.
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