Taggart,
J.A.:
—By
this
application
the
appellant,
The
Minister
of
National
Revenue
represented
by
The
Deputy
Attorney
General
of
Canada,
seeks
a
stay
of
the
effect
of
an
order
made
by
Madam
Justice
Southin
from
which
the
appeal
has
been
taken.
The
background
is
that
the
petitioners
filed
no
income
tax
returns
for
the
taxation
years
1983
and
1984.
In
1985
and
1986,
the
Minister,
acting
under
the
provisions
of
the
Income
Tax
Act,
required
them
to
file
returns
for
those
two
years.
They
complied.
Mr.
Griffin
showed
in
his
returns
no
tax
payable
in
either
year.
Ms.
Chudina
showed
no
tax
payable
for
1983
and
a
refund
of
tax
paid
of
just
over
$1,000
for
1984.
Assessments
were
then
issued
by
the
Minister.
In
the
case
of
Mr.
Griffin,
the
assessment
issued
on
August
9,
1985
showed
no
tax
owing
in
either
1983
or
1984.
In
the
case
of
Ms.
Chudina,
the
assessment
issued
on
September
3,
1986
showed
no
tax
owing
for
1983
and
a
refund
of
just
over
$1,000
for
1984.
On
December
13,
1986,
Griffin
and
Ms.
Chudina,
who
were
living
together
as
man
and
wife,
left
for
holidays
in
Mexico.
The
Minister
did
not
know
this.
On
December
16,
1986,
the
Minister
acted
under
subsection
225.2(1)
of
the
Income
Tax
Act.
He
sent
by
registered
post
assessments
for
the
years
1983
and
1984.
In
the
case
of
Ms.
Chudina,
the
aggregate
amount
said
to
be
owing
for
those
two
tax
years
was
$197,005.
In
the
case
of
Mr.
Griffin,
the
aggregate
amount
said
to
be
owing
was
$318,435.90.
The
assessments
were
in
part
based
on
the
net
worth
basis
of
Mr.
Griffin
and
in
part
on
the
provisions
of
section
160
of
the
Income
Tax
Act.
That
section
has
to
do
with
the
transfer
of
assets
between
spouses.
The
Minister
also
gave
notice
to
the
petitioners
that
it
might
reasonably
be
considered
that
collection
of
the
amounts
assessed
would
be
jeopardized
by
delay
in
collection
and
he
demanded
payment
forthwith
of
the
amounts
claimed
in
the
assessments.
Subsection
225.2(1)
of
the
Income
Tax
Act
provides:
225.2
(1)
Collection
in
jeopardy.
—
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,
by
notice
served
personally
or
by
registered
letter
addressed
to
the
taxpayer
at
his
latest
known
address,
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
(1)(a)
to
(g)
with
respect
to
that
amount
or
that
part
thereof.
The
registered
letters
were
mailed
at
8:25
and
8:35
a.m.
on
December
16,
1986.
On
the
same
day,
acting
under
subsections
223(1)
and
(2),
the
Minister
got
judgment
against
the
respondents
in
the
amount
claimed
to
be
owing
and
took
execution
proceedings
on
that
judgment
in
the
Federal
Court.
In
addition
the
judgment
was
registered
against
real
property
owned
by
the
respondents,
or
one
or
other
of
them,
or
their
nominees.
The
following
day,
December
17,
1986,
the
Sheriff
levied
execution
in
accordance
with
the
proceedings
taken
under
the
Federal
Court
Act.
Madam
Justice
Southin
in
her
reasons
for
judgment
dated
December
8,
1987,
said
this:
6.
The
reason
the
Minister
sent
letters
instead
of
serving
the
petitioners
personally
was
to
ensure
surprise.
As
Mr.
Casey,
the
solicitor
for
the
petitioners,
put
it
in
his
affidavit:
5.
When
I
asked
those
officials
why
they
did
not
give
actual
notice
to
my
clients
of
the
assessments
and
reassessments
and
of
the
Minister’s
direction
under
section
225.2
of
the
Income
Tax
Act
prior
to
taking
execution
proceedings,
I
was
advised
in
words
to
the
effect
that
Revenue
Canada
purposely
refrained
from
giving
the
Petitioners
actual
notice
because
Revenue
Canada
feared
that
such
notice
defeats
the
purpose
of
section
225.2
of
the
Income
Tax
Act
by
removing
the
element
of
surprise.
The
reference
to
"officials"
is
to
those
officers
of
the
Department
of
National
Revenue
with
whom
Mr.
Casey
met
on
December
30,
1986.
The
substance
of
paragraph
5
is
not
controverted
in
the
evidence
adduced
by
the
respondents.
I
conclude
that
the
officials
of
the
Department
knew
full
well
when
the
process
was
invoked
that
the
taxpayer
would
have
no
opportunity
whatever
to
pay
up
the
assessment.
I
hold:
1.
That
the
Minister
could
not
have
had
any
rational
belief
that
either
or
both
of
the
documents
could
come
into
the
hands
of
the
petitioners
before
execution
proceedings
began
on
December
17.
2.
That
when
the
Minister
began
on
the
17th
to
take
actions
described
in
paragraphs
225.1(1)(a)
to
(g)
he
had
no
belief
that
the
petitioners
could
not
conveniently
be
found.
He
believed
that
the
petitioners
were
at
home.
So
what
it
comes
to
is
that
all
in
one
day,
the
Minister
assessed
for
tax
asserted
due,
sent
a
letter
of
assessment
with
a
demand
for
payment,
obtained
a
judgment,
and
obtained
process
of
execution,
and
the
next
day
executed
that
process.
Of
all
this,
the
petitioners
had
no
knowledge
until
they
returned
home
from
their
holiday.
When
the
respondents
returned
home
at
the
end
of
December
1986,
they
found
that
the
following
property
had
been
seized
by
the
Sheriff.
Category
1
Category
1
consisted
of
furnishings
in
the
petitioners'
residence
in
Surrey.
Virtually
everything
in
the
house
that
could
be
moved
and
was
of
any
value
was
taken
by
the
Sheriff.
The
petitioners
applied
for
the
return
of
those
goods
and
chattels.
They
were
released
and
are
now
in
the
possession
of
the
respondents.
Category
2
Category
2
arises
from
three
garnishing
proceedings
taken
by
the
Minister.
The
first
of
the
three
was
a
garnishing
proceeding
taken
on
December
16,
1986
in
which
the
garnishee
was
the
Surrey
Credit
Union.
Some
$10,633.09
was
attached
in
those
proceedings
and
that
money
is
now
in
the
possession
of
the
Minister
of
National
Revenue.
The
second
garnishing
proceeding
was
taken
against
a
debtor
whose
name,
I
believe,
is
Prisco.
He
appears
to
owe
the
respondents,
or
one
or
other
of
them,
money.
Nothing
appears
to
have
been
attached
as
a
result
of
those
garnishing
proceedings.
The
third
garnishing
proceedings
related
to
the
employer
of
Ms.
Chudina,
who
is
employed
in
a
restaurant
in
New
Westminster.
Those
garnishing
proceedings
attach
$100
in
each
month
from
her
wages.
I
was
told
by
counsel
that
those
garnishing
proceedings
are
still
operating
to
attach
each
month
that
amount
of
money.
Category
3
Category
3
consists
of
two
real
properties.
The
first
is
what
has
been
described
as
the
Surrey
residence
and
against
which
the
judgment
obtained
by
the
Minister
was
registered.
The
Surrey
property
is
in
the
name
of
a
limited
company
but
it
is
clear
that
it
acts
as
a
nominee
for
Ms.
Chudina.
The
second
property
involved
was
the
Abbotsford
property
registered
again
in
the
name
of
a
nominee
of
Ms.
Chudina.
The
judgment
obtained
by
the
Minister
of
National
Revenue
was
registered
against
this
property.
Category
4
The
fourth
category
of
assets
consists
of
shares
in
brokerage
accounts
owned
by
one
or
other,
or
both,
of
the
respondents.
Proceedings
were
taken
against
Canerim
Investments
and
shares
and/or
money
was
attached.
If
shares
were
attached
they
were
sold.
Something
in
the
order
of
$4,000
representing
the
proceeds
of
the
sale
of
shares
or
cash
in
the
brokerage
account
was
attached
and
is
now
held
by
the
Minister
of
National
Revenue.
Category
5
The
fifth
category
of
property
were
motor
vehicles.
There
were
three
in
all
—
a
Cadillac
owned
by
Ms.
Chudina,
and
a
Mercedes
and
motorhome
owned,
I
believe
by
Mr.
Griffin.
The
Cadillac
was
released
by
an
order
made
by
Mr.
Justice
Taylor
on
condition
that
it
not
be
sold.
The
Mercedes
and
motorhome
were
released
by
Mr.
Justice
Hutcheon
of
this
Court
on
the
basis
that
possession
would
be
in
Mr.
Griffin
as
the
nominee
of
the
bailiff
to
maintain
possession
of
the
property
on
the
bailiff’s
behalf.
That
was
the
property
attached
by
the
Minister
and
any
disposition
that
may
have
been
made
of
the
property
attached.
The
petitioners
brought
these
proceedings
seeking
relief
from
the
seizures
and
attachments
made
on
behalf
of
the
Minister.
They
also
sought
such
other
relief
that
may
be
deemed
just
in
the
circumstances.
I
emphasize
that
the
single
issue
decided
by
Madam
Justice
Southin
was
whether
the
seizures
were
valid.
In
effect
the
question
she
posed
was
whether
the
Minister
acted
in
accordance
with
the
provisions
of
the
Income
Tax
Act.
Her
conclusions
were
summed
up
in
this
way:
My
view
is
that
the
relief
which
is
just
is
a
declaration
that
as
of
December
17,
1986
the
Minister
had
no
lawful
right
to
take
any
of
the
actions
so
described.
When
Madam
Justice
Southin
used
the
term
“so
described”,
she
had
reference
to
the
description
given
to
what
the
Minister
might
do
under
the
provisions
of
subsection
225.2(1)
and
section
225.1.
Her
conclusion
was
based
on
her
interpretation
of
the
language
of
subsection
225.2(1)
and
especially
her
interpretation
of
the
notice
requirements
of
that
section.
She
described
the
process
taken
by
the
Minister
in
this
case
as
being
analogous
to
a
"Mareva
injunction
process".
Having
so
described
the
proceedings
she
said
this:
In
my
opinion,
the
concept
underlying
section
225.2
is
simple.
The
taxpayer
must
pay
up
right
away
or
the
Minister
will
use
the
full
panoply
of
his
powers.
The
amount
assessed
is
effectively
treated
as
a
demand
debt
upon
the
non-payment
of
which
then
and
there
the
taxpayer
is
in
the
position
he
was
before
the
1985
amendments.
But
how
can
the
taxpayer
avoid
the
seizure
of
his
property
by
paying
up
unless
he
knows
that
he
owes
the
money
(i.e.
has
been
assessed)
and
that
the
Minister
insists
on
having
it?
In
the
case
before
me,
the
assessment
and
the
demand
for
payment
were
both
posted
on
December
16,
and
the
seizure
took
place
the
next
day.
This
course
of
action
was
deliberately
adopted
so
that
the
taxpayer
would
not
have
a
chance
to
pay
Up.
To
adopt
a
course
of
action
deliberately
intended
as
this
was
to
deprive
the
taxpayer
of
the
opportunity
however
brief
of
paying
up
before
the
seizure
of
all
his
property
is,
in
my
opinion,
to
misuse
the
power
conferred.
It
is
a
subversion
of
Parliamentary
intention.
The
thrust
of
these
sections
is
that
the
taxpayer
is
to
be
given
the
opportunity
to
appeal
and
the
opportunity
to
pay.
Section
225.2
is
a
special
power
for
a
limited
purpose.
The
principles
applicable
on
applications
such
as
this
one
have
been
frequently
stated.
A
very
succinct
and
useful
statement
of
the
principles
is
found
in
the
judgment
of
Mr.
Justice
Macfarlane
in
Bolton
et
al.
v.
Forest
Pest
Management
Institute
et
al.
(1985),
66
B.C.L.R.
126
(C.A.).
I
refer
especially
to
this
language
at
pages
135-36:
The
next
question
is
whether
an
interim
injunction
should
be
granted
to
the
plaintiffs
to
preserve
their
rights
pending
the
hearing
of
the
appeal.
Section
10(2)(b)
of
the
Court
of
Appeal
Act
authorizes
such
an
order
to
prevent
prejudice.
I
think
the
principles
used
in
deciding
whether
to
grant
a
stay
of
proceedings,
when
there
is
an
order
to
be
stayed,
are
appropriate
for
consideration
on
an
application
under
s.10(2)(b).
Those
principles
may
be
stated
in
this
way.
The
Court
of
Appeal
has
the
power
to
grant
a
stay
of
proceedings
pending
disposition
of
an
appeal
in
a
proper
case.
It
is
discretionary,
and
should
only
be
exercised
when
it
is
necessary
to
preserve
the
subject
matter
of
the
litigation
pending
final
decision
of
the
court,
to
prevent
irremedial
damage,
or
where
there
are
other
special
circumstances.
On
such
an
application,
the
court
must
attempt
to
do
justice
between
the
parties,
that
is,
not
prevent
an
appellant
from
prosecuting
an
appeal,
while
at
the
same
time
not
causing
prejudice
to
the
respondents.
This
court
does
not
lightly
deprive
parties
of
the
benefit
of
the
judgment
which
they
have
obtained
in
a
trial
court,
but
nevertheless,
a
function
of
this
court
is
to
review
orders
made
in
the
lower
courts
and
to
make
appropriate
orders
in
this
court
to
see
that
justice
is
done.
Here
the
principal
arguments
were
as
to
the
merits
of
the
appeal
and
as
to
the
necessity
to
preserve
the
subject
matter
of
the
appeal.
As
to
the
merits,
counsel
for
the
Minister
submitted
that
subsection
244(14)
and
subsection
248(7)
dealing
with
the
mailing
process
contemplated
by
subsection
225.2(1)
support
the
conclusion
the
Minister
acted
within
the
provisions
of
the
Act.
Subsections
244(14)
and
248(7)
relate
to
times
when
notices
such
as
those
given
in
this
case
are
deemed
to
have
been
mailed
and
received.
Counsel
for
the
respondents
contended
that
subsections
244(14)
and
248(7)
and
especially
subsection
244(14),
are
not
sections
which
conclusively
deem
what
are
the
mailing
date
and
receipt
date
of
the
notices.
Subsection
244(14)
in
his
submission
does
no
more
than
raise
a
presumption
as
to
the
mailing
date.
Since
it
is
only
a
presumption,
it
is
rebuttable
and
in
this
case,
was
rebutted
by
the
material
presented
to
Madam
Justice
Southin.
I
cannot
say
there
is
no
argument
to
be
made
on
behalf
of
the
Minister
of
National
Revenue
on
this
appeal.
But
as
I
view
the
matter,
it
is
at
best
an
argument
which
is
highly
technical
and
provides
scant
support
for
the
stay
of
proceedings
sought
by
the
Minister.
That
is
especially
so
when
one
compares
the
statute
as
it
was
before
amendments
were
made
in
1985
with
the
amended
statute.
As
to
the
second
aspect
which
the
Minister
must
overcome,
that
of
preserving
the
subject
matter
of
the
appeal,
it
is
clear
beyond
question
that
the
circumstances
now
obtaining
are
markedly
different
from
those
which
existed
when
the
Minister
made
his
declaration
in
December
of
1986.
The
Minister
seems
to
have
acted
on
the
premise
the
respondents
were
absconding,
or
intended
to
abscond
in
the
future,
to
a
jurisdiction
where
their
assets
would
not
be
attachable
by
the
Minister.
The
evidence
as
to
that
is
hotly
contested
by
the
respondents
and
their
position
is
supported
to
a
considerable
extent
by
independent
affidavit
evidence
which
was
before
Madam
Justice
Southin.
The
Minister
may
also
have
been
influenced
by
criminal
charges
arising
out
of
drug
transactions
in
which
the
respondent
Griffin
was
alleged
to
be
involved.
Some
of
those
were
conspiracy
charges,
some
possession
and
some
trafficking.
All
of
them
have
now
been
dismissed.
The
respondent
Griffin
was
convicted
of
a
threatening
charge
but
he
has
appealed
that
conviction
and
the
appeal
is
pending.
In
the
circumstances
it
is
my
opinion
that
the
merits
of
the
appeal
do
not
support
the
application
for
a
stay,
and
certainly,
no
ground
has
been
shown
upon
which
it
can
be
said
that
it
is
necessary
for
the
protection
of
the
Minister
that
the
subject
matter
of
the
appeal
be
preserved.
Accordingly
it
is
my
opinion
that
the
application
must
be
dismissed.
Costs
must
follow
the
event.
Application
dismissed.
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