Bell
J.T.C.C.:
—
These
three
appeals
were
heard
on
common
evidence.
Reference
to
the
“Appellant”
is
a
reference
to
each
of
the
three
Appellants,
the
procedures
taken
by
the
Minister
of
National
Revenue
(“Minister”)
in
respect
of
each
of
them
being
identical.
The
issue
is
whether
an
assessment
made
under
the
authority
of
subsection
227(10)
based
upon
subsection
224(4)
of
the
Income
Tax
Act
(“Act”)
should
be
vacated.
Subsection
227(10)
reads
as
follows
The
Minister
may
assess
...
any
person
for
any
amount
payable
by
that
person
under
subsection
...
224(4)
...
and,
where
he
sends
a
notice
of
assessment
to
that
person,
Divisions
I
and
J
of
Part
I
are
applicable
with
such
modifications
as
the
circumstances
require.
Those
divisions
provide,
inter
alia,
for
objections
and
appeals
from
assessments.
Facts
acts
The
parties
filed
an
Agreed
Statement
of
Facts,
a
distillation
of
which
follows.
The
Appellant
had
borrowed
substantial
sums
of
money
from
a
number
of
related
companies.
Some
of
those
companies
were
assessed
by
the
Minister
for
income
tax
which
they
failed
to
pay.
Accordingly,
the
Minister
garnisheed
the
Appellants
on
August
9,
1993
under
section
224
of
the
Act.
Subsection
224(1)
provides
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
(...
“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.
Subsection
224(4)
reads,
Every
person
who
fails
to
comply
with
a
requirement
under
subsection
(1)
...
is
liable
to
pay
to
Her
Majesty
an
amount
equal
to
the
amount
that
the
person
was
required
under
subsection
(1)
...
to
pay
to
the
Receiver
General.
On
August
9,
1993
the
Minister
served
on
counsel
for
the
Appellant
(a)
a
letter
stating
that
he
had
obtained
an
Order
from
the
Supreme
Court
of
British
Columbia
under
section
225.2
of
the
Act,
(b)
Requirements
to
Pay
dated
August
9,
1993
under
subsection
224(1)
of
the
Act,
and
(c)
a
Notice
of
Assessment
dated
August
9,
1993,
which
included
the
following
words,
namely
The
liability
under
subsection
224(4)
of
the
Income
Tax
Act
in
the
amount
of...for
failure
to
comply
with
the
Requirement
to
Pay
dated
August
9,1993.
The
Order
provided
that
the
Minister
was
authorized
to
take
forthwith
and
from
time
to
time
any
or
all
of
the
actions
described
in
paragraph
225.1(l)(a)
to
(g)
inclusive
of
the
Income
Tax
Act
with
respect
to
any
amounts
assessed
pursuant
to
any
notice
or
notices
of
assessment
issued,
or
to
be
issued,
...
Section
224
sets
out
normal
garnishee
proceedings.
Section
225.1
limits
the
Minister’s
ability
to
require
a
person
to
make
payment
under
subsection
224(1)
until
after
a
prescribed
period
has
expired.
However,
Parliament
has
seen
fit
to
vary
this
procedure
in
cases
where
the
collection
of
tax
may
be
jeopardized.
This
variation
is
expressed
in
the
extraordinary
collection
procedures
found
in
section
225.2.
Subsection
225.2(2)
provides
that,
Notwithstanding
section
225.1,
where,
on
ex
parte
application
by
the
Minister,
a
judge
is
satisfied
that
there
are
reasonable
grounds
to
believe
that
the
collection
of
all
or
any
part
of
an
amount
assessed
in
respect
of
a
taxpayer
would
be
jeopardized
by
a
delay
in
the
collection
of
that
amount,
the
judge
shall,
on
such
terms
as
the
judge
considers
reasonable
in
the
circumstances,
authorize
the
Minister
to
take
forthwith
any
of
the
actions
described
in
paragraphs
225.1
(l)(a)
to
(g)
with
respect
to
the
amount.
Subsection
225.2(3)
provides
that
An
authorization
under
subsection
(2)
in
respect
of
an
amount
assessed
in
respect
of
a
taxpayer
may
be
granted
by
a
judge
notwithstanding
that
a
notice
of
assessment
in
respect
of
that
amount
has
not
been
sent
to
the
taxpayer
at
or
before
the
time
the
application
is
made
where
the
judge
is
satisfied
that
the
receipt
of
the
notice
of
assessment
by
the
taxpayer
would
likely
further
jeopardize
the
collection
of
the
amount,
and
for
the
purposes
of
sections
222,
223,
224,
224.1,
224.3
and
225,
the
amount
in
respect
of
which
an
authorization
is
so
granted
shall
be
deemed
to
be
an
amount
payable
under
this
Act.
[Emphasis
added.
]
Subsections
225.2(2)
and
(3)
permit
the
Minister
to
strike
quickly
where
the
collection
of
tax
may
be
jeopardized
by
delay.
Parliament
chose
not
to
give
the
Minister
discretion
to
implement
these
unusual
procedures
but
instead
required
the
Minister
to
obtain
a
court
order
authorizing
him
so
to
do.
It
is
in
the
context
of
this
extraordinary
procedure
that
the
facts
in
this
appeal
must
be
considered.
Appellant’s
Argument
Appellant’s
counsel
submitted
that
the
Appellant
was
not
“liable
to
pay”
under
subsection
224(4)
unless
it
had
received
a
requirement
and
had
failed
to
comply
with
it.
He
stated
that
the
Appellant
had
no
opportunity
to
comply
with
the
requirement
since
it
was
delivered
to
the
Appellant’s
counsel
at
the
same
time
as
the
copy
of
the
Order
and
the
Notice
of
Assessment.
He
argued
that
the
Appellant
could,
therefore,
not
have
failed
to
comply
and,
accordingly,
no
liability
could
arise
under
subsection
224(4).
He
then
submitted
that
subsection
225.2(3)
assumed
that
a
tax
liability
existed,
that
no
such
liability
existed
and
that
the
appeal
should
be
allowed
and
the
assessment
vacated.
Analysis
and
Conclusion
The
Appellant
cannot
succeed
with
this
argument.
The
Minister
has
the
right
to
assess
under
subsection
227(10)
if
there
is
an
“amount
payable”
under
subsection
224(4).
Normally,
the
person
so
assessed
would
have
had
to
fail
to
comply
with
a
subsection
224(1)
requirement
and
therefore
be
“liable
to
pay
…
an
amount.”
The
Notice
of
Assessment
referred
to
a
“failure
to
comply”
-
This
is
misleading
because
the
possibility
of
such
compliance
does
not
and
cannot
exist
in
circumstances
where
the
Minister
uses
the
extraordinary
collection
procedures
as
was
done
here.
Subsection
227(10)
permits
the
Minister
to
assess
an
“amount
payable”
under
subsection
224(4).
Subsection
225.2(3)
deems
an
“amount
payable”
for
the
purposes
of
section
224.
The
only
plausible
explanation
for
this
seems
to
be
to
authorize
an
assessment
under
subsection
227(10)
where
the
extraordinary
collection
procedures
are
pursued.
The
interaction
of
subsections
224(4),
225.2(3)
and
227(10)
is
so
abstruse
as
to
merit
legislative
surgery
so
that
their
purpose
and
practical
application
are
apparent.
This
does
not,
as
was
urged
by
Respondent’s
counsel,
preclude
the
Appellant
from
pursuing
his
appeal
rights
contained
in
subsection
227(10)
respecting
an
assessment
under
that
section.
An
order
of
another
court
made
for
collection
purposes
cannot
compromise
the
rights
of
a
taxpayer
in
pursuing
the
appeal
procedures
in
this
Court.
For
example
(a)
if
the
information
given
to
a
judge
upon
an
ex
parte
application
under
subsection
225.2(2)
was
inaccurate
and
an
order
were
inappropriately
made
as
a
result
thereof,
or
(b)
if
no
review
of
that
order
was
made,
or
(c)
if
correct
information
was
not
presented
on
any
review
made,
the
person
assessed
could
present
factual
information
on
an
appeal
to
this
court
which
might
result
in
the
amount
deemed
payable
under
subsection
225.2(3)
to
be
in
error.
That
did
not
happen
here.
No
evidence
countering
evidence
presented
by
the
Minister
was
proffered
either
on
review
of
the
ex
parte
order
or
in
this
court.
There
is
no
basis
for
vacating
the
assessment.
Accordingly,
the
appeal
is
dismissed
with
costs
to
the
Respondent.
Appeal
was
dismissed.
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