MacPherson C.].Q.B.:
On June 23, 1998, the Minister of National Revenue made an ex parte application to Barclay J. of this Court pursuant to s. 225.2(2) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the “Act’’) seeking an order allowing the Minister to commence any of the collection actions described in s. 225.1 (l)(a) to (g) of the Act against the respondent, 619159 Saskatchewan Ltd. (herein “the numbered company”) and Gene’s Trucking Ltd. (“Gene’s”) without waiting for the expiration of the 90 day collection restriction period. Filed in support of the ex parte application were the following:
(a) The affidavit of Linda Kinhnicki, a collections officer in the Saskatoon Tax Services Office of Revenue Canada, paras. 2, 3, 4 and 5 of which state:
2. Gene’s Trucking Ltd. (hereinafter “Gene’s”) is indebted to the Department for the following amounts as of June 22, 1998:
a) $30,154.16 for unremitted source deductions for its 1997 taxation year; and
b) $3,705.76 for outstanding corporate income tax for its 1995 taxation year.
3. On June 1, 1998 all of the assets of Gene’s were sold to 619159 Saskatchewan Ltd. Attached hereto as Exhibit “A” is a copy of the corporate search for Gene’s and 619159 Saskatchewan Ltd. which indicate that the directors and shareholders for both companies are identical.
4. On June 16, 1998 I was advised by Lowell Prefontaine (hereinafter “Prefontaine”), administrator for the Rural Municipality of Pleasantdale #398 (hereinafter “R.M.P.”), and verily believe to be true, that the R.M.P. awarded a contract to Gene’s in December 1997 (the “Contract”), but had recently received a letter from Gene’s stating that the corporate assets of Gene’s had been sold to 619159 Saskatchewan Ltd. as of June 12, 1998 and as a consequence Gene’s requested that the Contract be transferred to 619159 Saskatchewan Ltd. Attached hereto as Exhibit “B” is a copy of a letter from Gene’s to the R.M.P., dated June 9, 1998, outlining this request.
5. On June 10, 1998 the R.M.P. approved Gene’s request to have the Contract transferred to 619159 Saskatchewan Ltd.
b) Notice of assessment from Revenue Canada addressed to the numbered company setting out the “total amount assessed” as being $30,154.16. This notice refers to an attached “reconciliation” which purports to verify the aforesaid amount of $30,154.16.
On the basis of the above documents, on June 23, 1998, Barclay J. ordered:
...[T]hat the Minister of National Revenue be allowed to take forthwith, and from time to time, any or all of the actions described in paragraphs 225. 1 (1)(a)- (g), of the Income Tax Act as provided by subsection 225.2(2) of the Act.
...[T]hat this Order and the Notice of Assessment be served upon the respondents, Gene’s Trucking Ltd. and 619159 Saskatchewan Ltd., by personal service on the Respondents within 72 hours of the granting of this Order, pursuant to section 225.2(5) and (6) of the Income Tax Act.
Section 225.2(8) provides that where a judge of this Court has granted the kind of authorization set forth in the above order, the taxpayer may apply to a judge of this Court to review that authorization. By notice of motion dated July 6, 1998 of Gene’s and the numbered company, an order was sought setting aside the aforesaid order of Barclay J. In support of this notice of motion was the affidavit of Gene Gebkenjans, the owner of the two applicant companies in which he complained, one might say bitterly, about the treatment he has received from Revenue Canada, the confusing information he received from Revenue Canada and Revenue Canada’s failure to credit his companies with payments made to Revenue Canada. Revenue Canada has responded to Mr. Gebkenjans’ affidavit by filing a further affidavit, this time by one James Wytosky, also a collections officer in the Saskatoon Tax Services Office of Revenue Canada. Exhibit “A” to his affidavit is an “account reconciliation” of Gene’s for the period 1993 to January 1, 1997, showing on the first page a balance owing at January 1, 1997, of $79,664.97. The second and third sheet to this exhibit constitute a reconciliation, presumably for Gene’s, from January 1, 1997 to July 16, 1998, showing a balance owing of $30,332.67.
In applications of the kind now before me, under s. 225.2(11) I am given power to “confirm, set aside or vary the authorization [of the ex parte judge] and make such other order as the judge considers appropriate”.
Section 225.2(12) reads:
225.2(12) Where any question arises as to the course to be followed in connection with anything done or being done under this section and there is no direction in this section with respect thereto, a judge may give such direction with regard thereto as, in the opinion of the judge, is appropriate.
I am confused by the conflicts between the Kinhnicki affidavit filed in support of the ex parte application to my brother Barclay J. Purporting to cover the period October 21, 1996 to June 22, 1998 on the one hand, and the Wytosky affidavit filed in the application now before me purporting to cover the years 1993 to January 1, 1997. There are significant differences in these affidavits — perhaps in particular we find in the Wytosky affidavit -that Revenue Canada received a payment from “R.M. of Preeceville on June 24, 1997, of $60,323.64, but the reconciliation in the Kinhnicki affidavit shows no such receipt on June 24, 1997, or on any other date.
I am also mystified by exhibit “Y” to the affidavit of Gene Gebkenjans, the second page of which sets out that $9,861.07 was garnisheed by Revenue Canada; this claim by Mr. Gebkenjans is not disputed by Revenue Canada, but does not appear in the material filed by Revenue Canada either before Barclay J. or before me.
Referring again to the second page of the Objection to the Barclay J. order, para. 4 sets out that $1,565.85 was remitted in respect of Margen Holdings Ltd.; again, Revenue Canada does not take issue with this amount in the Wytosky affidavit, but no credit is shown to either of the respondent companies for this amount.
Frankly, I find it difficult to uphold the ex parte order of Barclay J. based on the Kinhnicki affidavit, when now, following the Objection, I find Revenue Canada coming forth with different information than that originally provided.
I realize that Revenue Canada in many instances, has difficulty in setting forth clear and undisputed statements as to taxpayers’ indebtedness to Revenue Canada, but the lack of precision in the material before me, simply goes too far. I have no doubt that if Barclay J. had before him the same material that I have had before me, he would not have issued the ex parte order. Obviously s. 225.2(11) and (12) were inserted in the Act for the specific purpose of correcting situations where an ex parte order issues on material which later proves either erroneous or inadequate, which is the situation before me.
The ex parte order in this matter made on June 23, 1998, is hereby set aside.
The respondent companies shall have their costs including a one-time counsel fee of $500.00.
If he has not already done so I would expect Mr. Carson to advise his client that it is unwise in the extreme to play it fast and loose with Revenue Canada
Application granted.
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