Mable D Carolus and Elaine D Myers v. Minister of National Revenue, [1976] CTC 608, 76 DTC 6359

Mahoney, J:—This is an application by originating notice of motion seeking an order in the nature of prohibition restraining the respondent from proceeding to remove and/or sell certain chattels seized by the sheriff of the Judicial District of Red Deer, Alberta, pursuant to a direction by the respondent made under subsection 226(2) of the Income Tax Act, SC 1970-71-72, c 63. The applicants, jointly with their respective husbands, each own a one-half interest in a Cadillac automobile and trailer. The applicants were not prepared, at the hearing, to deal with the automobiles and are in the position of having to renew their application in respect of them should they deem it advisable. The trailers, or mobile homes, were when seized, and had been for some weeks previous to seizure, occupied by their respective owners as residences.

The applicants are ordinarily resident outside Canada and, in fact, left Canada some time after September 3, 1976. The chattels were Originally seized on or about August 13, 1976 by the sheriff under writs of fieri facias issued out of this Court against the property of Sonny Myers Amusements Ltd.* [1] The sheriff was then advised that the cars and trailers did not belong to that company but to the individuals. On August 20 assessments for the 1976 taxation year yere issued against the applicants and demands for payment forthwith, pursuant to subsection 226(1) of the Income Tax Act, were made upon them. By letters of August 31 the applicants were each advised that the cars and trailers had been seized under subsection 226(2). The applicants allege that the trailers are, in law, exempt from seizure.

The applicable provisions of the Income Tax Act follow:

225. (5) Such goods and chattels of any person in default as would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section.

226. (1) Where the Minister suspects. that a taxpayer is about to leave Canada, he may before the day otherwise fixed for payment, by notice served personally or by registered letter addressed to the taxpayer, demand payment of all taxes, interest and penalties for which the taxpayer is liable or would be liable if the time for payment had arrived, and the same shall be paid forthwith notwithstanding any other provision of this Act.

(2) Where a person has failed to pay tax, interest or penatlies demanded under this section as required, the Minister may direct that the goods and chattels of the taxpayer be seized and subsections 225(2) to (5) are, thereupon, applicable mutatis mutandis.

The Exemptions Act, RSA 1970, c 129, of Alberta provides:

2. The following real and personal property of an execution debtor is exempt from seizure under any writ of execution:

(k) the house actually occupied by the execution debtor and buildings used in connection therewith, and the lot or lots on which the house and buildings are situated according to the registered plan thereof, if the value of the house, building and the lot or lots does not exceed $8,000, but if the value does exceed $8,000, the house, building and lot or lots may be offered for sale and if the amount bid at the sale after deducting all costs and expenses exceeds $8,000 the property shall be sold and the amount received from the sale to the extent of the exemption shall be paid at once to the execution debtor and shall until then be exempt from seizure under any legal process, but no such sale shall be carried out of possession given to any person thereunder until the execution debtor has received $8,000;

(l) the mobile home actualiy occupied by the execution debtor if the value of the mobile home does not exceed $3,000, but if the value does exceed $3,000, the mobile home may be offered for sale and if the amount bid at the sale after deducting all costs and expenses exceeds $3,000 the mobile home shall be sold and the amount received from the sale to the extent of the exemption shall be paid at once to the execution debtor and shall until then be exempt from seizure under any legal process, but no such sale shall be carried out or possession given to any person until the execution debtor has received $3,000.

9. Section 2 does not apply

(a) where the execution debtor has absconded or is about to abscond from the Province, leaving no wife, or husband or infant children within the Province, or

I cannot accept the respondent’s submission that clause 9(a) of The Exemptions Act operates in these circumstances to deprive the applicants of any exemption to which they are otherwise entitled. I have no doubt that, when subsection 226(1) was put in play, the applicants were “about to leave Canada” but that is not necessarily to say that they were “about to abscond’’ from Canada. “Abscond” is not a synonym of “leave”. It implies a purpose as well as an action. One who absconds from a particular place not only leaves it but leaves it with the purpose of frustrating or rendering more difficult, by his absence, the effective application to him of the laws current in the jurisdiction whence he absconds. In this instance, it appears that the applicants’ purpose in leaving Canada was simply to return home.

That said, considering section 2 of The Exemptions Act in its entirety, it is manifest that the personal and real property intended to be exempted from seizure are little more than bare necessities in terms of shelter, household goods and personal effects and the tools of the debtor’s trade.* [2] The term “mobile home” as used in the section is not to be interpreted, as it may now popularly be, as synonymous with “house trailer” or the myriad of other recreational vehicles so common on the highways today. Rather, the word “home” is what is significant for exemption purposes; ‘‘mobile’’ merely distinguishes that type of home from the “house” exempted under clause (k). Clauses

(I) and (k) are not connected by “and”. It would be a ridiculous result if, just because the debtor happened to be on a fishing trip in his “mobile home” when the sheriff effected a seizure of his property, he had lost the exemption of his house to which clause (k) entitled him while retaining the exemption of his mobile home under clause (1). The exemption granted by clause 2(l) is not to be construed as embracing a second home, whether occupied for recreational or other purposes, but is limited to a mobile home ordinarily occupied by the debtor for shelter. In other words, “residence” being used in the sense of shelter rather than geographically, the mobile home exempt from seizure is the debtor’s principal residence.

If, indeed, either applicant were to prove that her trailer was in fact her principal residence, I should hold it exempt from seizure. However, that is not proved. The evidence is that both applicants reside at St Joseph, Missouri, USA. There is no evidence that, when there, they ordinarily live in their trailers. On the contrary, the applicant Carolus says that she had been residing in her trailer since about July 21, 1976; the applicant Myers had been so occupying hers since about June 1, 1976. When they were seized in August, they had been occupied as residences for relatively short periods, far too short for one to be tempted to infer that they were the applicants’ principal residences.

The application is dismissed with costs.