Fredericton Housing Limited v. Her Majesty the Queen, [1973] CTC 400, 73 DTC 5329

The Chief Justice (concurred in by St-Germain, DJ):—This is an appeal from a judgment of the Trial Division dismissing, with costs in the cause, an application that, in its inception, was a motion for leave to file a conditional appearance and a stay under Rule 401, but which, by arrangement between the parties, was treated as an application to strike out the Statement of Claim on certain stated grounds.

On July 20, 1972, the Tax Review Board allowed an appeal by the appellant herein from its assessment under Part I of the Income Tax Act for its 1970 taxation year by a judgment that referred the assessment back to the respondent for reassessment ‘‘deducting the profit” made on the sale of a parcel of land “which the appellant had treated as capital gain and which the Minister had treated as income”.

The Income Tax Act, as amended by the statute that came into force on January 1, 1972 (chapter 63 of 1970-71-72) contained the following provisions with reference to appeal from such judgment:

172. (1) The Minister or the taxpayer may, within 120 days from the day on which the Registrar of the Tax Review Board mails the decision on an appeal under section 169 to the Minister and the taxpayer, appeal to the Federal Court of Canada.

175. (1) An appeal to the Federal Court under this Act, other than an appeal to which section 180 applies, shall be instituted,

(a) in the case of an appeal by a taxpayer,

(i) in the manner set forth in section 48 of the Federal Court Act, or

(ii) by the filing by the Minister in the Registry of the Federal Court of a copy of a notice of objection pursuant to paragraph 165(3)(b); and

(b) in the case of an appeal by the Minister, in the manner provided by the Federal Court Rules for the commencement of an action.

The proceeding in the Trial Division was instituted by a Statement of Claim the body of which, as amended shortly after it was filed on November 27, 1972, read as follows:

Her Majesty’s Deputy Attorney General of Canada, on behalf of Her Majesty, sheweth as follows:

A. STATEMENT OF FACTS

1. The Tax Review Board by a judgment dated the 31st day of July 1972 and mailed on the 1st day of August 1972 allowed the Defendant’s appeal from the assessment made by the Minister of National Revenue, in respect of the Defendant’s 1970 taxation year, notice of which was mailed to the Defendant on the 12th day of May 1971.

2. The Minister of National Revenue in assessing the Defendant for its 1970 taxation year, included in the computation of its income the gain of $168,018.00 arising from the sale of an 80 acre parcel of land being a portion of an 132 acre parcel of land which the Defendant had purchased in 1965 at a cost of about $500.00 per acre which 80 acre parcel of land was resold in 1970 for the sum of $200,000.00.

3. The Minister of National Revenue in assessing the Defendant for its 1970 taxation year and including in its income the gain of $168,018.00, did so on the assumption that the gain arising therefrom was income from a business or venture in the nature of a trade.

B. STATUTORY PROVISIONS UPON WHICH THE PLAINTIFF RELIES AND THE REASONS WHICH HE INTENDS TO SUBMIT

4. The Plaintiff relies upon sections 3, 4 and 139(1)(e) of the Income Tax Act, RSC 1952, c 148.

Claim

The Deputy Attorney General of Canada, on behalf of Her Majesty the Queen, claims that the appeal from the decision of the Tax Review Board be allowed with costs and the assessment be restored.

DATED at Ottawa this 27th day of November 1972.

This was followed by a “signature” made up as follows:

D S Maxwell,

Deputy Attorney General of Canada

per:

F J Dubrule

The facts, in so far as relevant to the “signature”, are as follows: Mr F J Dubrule, a member of the bar who is a senior legal officer of the Department of Justice, prepared a draft statement of claim which was substantially the same as the typed part of the body of the Statement of Claim as filed including the typed part of the “signature”. On November 24, 1972, when he was on the point of going on a trip, Mr Dubrule instructed a secretary in the Department to have the Statement of Claim “signed by one of the lawyers in the . . . Section and filed with the Registry of the Federal Court.” That secretary thereupon asked another lawyer in the Section in question to sign the Statement of Claim and that lawyer, pursuant to the request, wrote Mr Dubrule’s name after the word “per” in the typed document and the document was then filed on November 27, 1972.

The objections by the appellant to the judgment appealed against are stated in its memorandum in this Court as follows:

PART Il

OBJECTIONS BY APPELLANT

1. It is submitted that the learned trial judge erred in failing to strike out the Statement of Claim on the basis that it does not contain a precise statement of the material facts as required by Rule 408 or to make such other order as might be appropriate.

2. It is submitted that the learned trial judge erred in finding that Mr Storrow had authority to sign Mr Dubrule’s name at the foot of the Statement of Claim.

3. It is submitted that the learned trial judge erred in holding that the Statement of Claim was not required to be signed personally by Mr Dubrule or another person duly authorized to so sign.

The first ground for the appeal is that the allegations in the body of the Statement of Claim do not comply with Rule 408(1), which reads as follows:

RULE 408. (1) Every pleading must contain a precise statement of the material facts on which the party pleading relies.

The part of the memorandum that indicates the precise ground on this aspect of the matter reads as follows:

In the Statement of Claim there is a single allegation that the defendant sold “an 80 acre parcel of land” and that the profit from such sale was income from a business or venture in nature of trade. The material facts on which this allegation is based are not set out.

On this point, we did not find it necessary to call on the respondent. At most, as I read this complaint, it is a ground for demanding particulars. I cannot see any ground for striking out the Statement of Claim in the complaint as so formulated.

The other grounds for the appeal are based on Rule 600(1), which reads as follows:

RULE 600. (1) Except in a case where some other: procedure is required by statute, Rule 400 applies to an action by the Crown, which shall be brought by the Attorney General of Canada or the Deputy Attorney General of Canada on behalf of the Crown. (Form 31) A statement of claim or declaration in an action by the Crown may be signed by the Attorney General of Canada, the Deputy Attorney General of Canada, or by some person duly authorized to affix the signature of one of them thereto.

In my view, this authorizes a statement of claim in an action by the Crown (and, therefore, by virtue of section 175 of the Income Tax Act, in an appeal by the Minister under that Act) to be signed

(a) by the Attorney General of Canada,

(b) by the Deputy Attorney General of Canada, or

(c) by some person duly authorized to affix the signature of the Attorney General or the Deputy Attorney General thereto.

Having regard particularly to the third alternative, I cannot escape the conclusion that the rule authorizes

(a) the Attorney General to write or otherwise put his own name at an appropriate place on the document,

(b) the Deputy Attorney General to write or otherwise put his own name at an appropriate place on the document, and

(c) some other person, duly authorized, to affix, at an appropriate place on the document, the signature of the Attorney General or the Deputy Attorney General and to certify to his having done so by adding, after appropriate certifying phraseology, in his own writing or by some other method, his own name.

I come to this conclusion, after reading the jurisprudence referred to by both parties, which merely establishes in my view that the question as to what is required by a provision such as Rule 600(1) must be decided on the wording of the particular provision in the context in which it is found.

If I am right in my conclusion as to what is meant by Rule 600(1), the Statement of Claim in this appeal was not signed in the manner thereby authorized. Mr Dubrule did not sign his own name either personally or by an amanuensis* [1] and the other lawyer did not sign his own name.

However, in my view, the fact that the Statement of Claim was not signed in the manner authorized by Rule 600(1) does not make the Statement of Claim a nullity. In fact, the Statement of Claim was prepared, and filed in the Court, by officers of the Department of Justice functioning as part of the group of legal officers who, under the Attorney General of Canada, perform his task of regulating and conducting litigation for or against the Crown or any public departmentt. [2] If a document is filed in the Court without a signature to certify by whom it is filed, there is, in my view, an irregularity but the document is not a nullity, so long as it is, in fact, filed by or on behalf of the party from whom it purports to emanate. I am of this view even though Rule 300(4) requires expressly that “All documents filed in the Registry or with the Court in an action on behalf of a party shall be signed by the attorney or solicitor on the record if the party has such an attorney or solicitor’. In my view, lack of a signature of the party or of somebody acting for him is not such an omission as makes the document a nullity but is an irregularity that may be corrected providing the document is, otherwise, what it appears to be.

In my view, all such irregularities, in this Court, fall to be regulated by Rule 302, which reads as follows:

RULE 302. The following provisions apply with reference to formal objections and failures to comply with the requirements of these Rules:

(a) no proceeding in the Court shall be defeated by any merely formal objection,

(b) non-compliance with any of these Rules or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court shall think fit.

(c) no application to set aside any proceeding for irregularity shall be allowed unless made within a reasonable time, nor if the party applying has taken any fresh step after knowledge of the irregularity.

(d) where an application is made to set aside a proceeding for irregularity, the several objections intended to be insisted upon shall be stated in the notice of motion.

The relevant part of Rule 302 here is the part that provides that “. . . non-compliance with any of these Rules . . . shall not render any proceeding void unless the Court shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court shall think fit”.

In considering what action, if any, should have been taken by the Trial Division on this application under Rule 302, I am of opinion that we must have regard to Rule 2(2), which reads as follows:

(2) These Rules are intended to render effective the substantive law and to ensure that it is carried out; and they are to be so interpreted and applied as to facilitate rather than to delay or to end prematurely the normal advancement of cases.

In my view, the irregularity in the signature here has not caused any prejudice whatsoever to the appellant and does not justify either a direction that the Statement of Claim is void or any ‘remedial action.

The appeal should, in my view, be dismissed with costs.

Choquette, DJ (dissenting):—I agree with the Chief Justice that the Statement of Claim was not signed as authorized by Rule 600.

In my view, however, the effect of the failure to have the Statement of Claim signed as authorized is that no statement of claim was filed in Law.

I am, therefore, of opinion that we should direct, under Rule 302, that the Statement of Claim is void and that there should be judgment striking it out.