Addy, J:
1 The Minister of National Revenue, pursuant to section 46 of the Income Tax Act, RSC 1952, c 148, on October 30, 1973 issued notices of reassessment of the plaintiff for each of the four taxation years, 1968 to 1971 inclusively, adding some $454,000 to the plaintiff's taxable revenue. The plaintiff duly filed, within the prescribed time, a notice contesting the reassessment. Subsequently, the plaintiff was informed that, pursuant to section 223 of the aforesaid Act, a certificate, having the same force and effect as a judgment, had been registered in the Federal Court of Canada covering income tax, penalties and interest due on these reassessments, which totalled $209,020.26, as of February 13, 1974, and also providing for interest at 6% per annum to be calculated from February 13, 1974 on the sum of $141,643.21.
2 At a subsequent date, demands on third parties were served on some 49 debtors and banks, who allegedly owed moneys to or held moneys belonging to the plaintiff, and seizures were effected of the shares of the plaintiff in four companies and lien notices were registered against several parcels of real estate owned by the plaintiff.
3 The plaintiff sues for a declaration that section 223 of the Income Tax Act, SC 1970–71–72, c 63, is unconstitutional and ultra vires of the Parliament of Canada as being contrary to the principles of natural justice and of the Canadian Bill of Rights and to have the said section declared null, void and of no effect. He also requests a declaration to have the aforesaid certificate, which was registered in the Federal Court by the defendant, declared null, void and of no effect and also to have all the executions and seizures lifted which the defendant caused to be issued and taken thereunder.
4 The plaintiff argues that section 223 of the Income Tax Act is ultra vires because it violates the principle of audi alteram partem or, alternatively, that it is null, void and of no effect as being contrary to paragraph 2(e) of the Canadian Bill of Rights on the grounds that it purports to give to the Minister of National Revenue, without the taxpayer being heard or notified, the right to issue a certificate which purports to establish the amount owed by the taxpayer and of subsequently registering the certificate in the Federal Court, following which the said certificate is purported to have the same force and effect as a judgment. Section 223 reads as follows:
223. (1) An amount payable under this Act that has not been paid or such part of an amount payable under this Act as has not been paid may be certified by the Minister(a) where there has been a direction by the Minister under subsection 158 (2), forthwith after such direction, and
(b) otherwise, upon the expiration of 30 days after the default.
(2) On production to the Federal Court of Canada, a certificate made under this section shall be registered in the Court and when registered has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the said Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.
(3) All reasonable costs and charges attendant upon the registration of the certificate are recoverable in like manner as if they had been certified and the certificate had been registered under this section.
5 It is, in my view, settled law that though the registration of the certificate has, pursuant to subsection (2) above, the same force and effect as a judgment it is not, at law, a judgment. (Refer MNR v Bertrand Bolduc, [1961] C.T.C. 265 at 268, 61 D.T.C. 1148 at 1149, and MNR v Joseph A Simard, [1962] C.T.C. 310 at 314–15;62 D.T.C. 1192 at 1194.)
6 However, the bare fact that the certificate does not constitute a judgment, does not prevent section 223, under which the certificate is issued, from being ultra vires as infringing against the rule of audi alteram partem or of being ineffective as being contrary to paragraph 2(e) of the Canadian Bill of Rights.
7 Generally speaking, even an administrative act or procedure, where it involves a decision, which results in a final determination of rights, is subject to the common law rule as to the right to be heard and also to the provisions of paragraph 2(e) of the Canadian Bill of Rights as aforesaid, while one that does not result in a final determination of rights is not subject to either. Cartwright, J (as he then was), in delivering reasons on behalf of the Supreme Court of Canada in its unanimous decision in the case of Her Majesty the Queen v Bernard Randolph and World Wide Mail Services Corporation, [1966] S.C.R. 260, stated at page 266:
Generally speaking the maxim audi alteram partem has reference to the making of decision affecting the rights of parties which are final in their nature, and this is true also of s.2(e) of the Canadian Bill of Rights upon which the respondents relied.
The following passage in Broom's Legal Maxims, 10th ed., at p. 117 is in point:
“Although cases may be found in the books of decisions under particular statutes which at first might seem to conflict with the maxim, it will be found on consideration that they are not inconsistent with it, for the rule, which is one of elementary justice, only requires that a man shall not be subject to final judgment or to punishment without an opportunity of being heard.”
8 This principle was reaffirmed in a majority decision of the Supreme Court of Canada in Le Syndicat des Employés du Transport de Montréal (CSN) et al v The Attorney General of the Province of Quebec, [1970] S.C.R. 713, and also Guay v Lafleur, [1965] S.C.R. 12 at 16, [1964] C.T.C. 350, 64 D.T.C. 5218.
9 It seems however that even where private rights are affected, the obligation of a person or board yielding the power, to act judicially, as opposed to a right of the person affected to be heard, is not an absolute one to be applied in all cases wherever private rights are affected. Pigeon, J, when pronouncing judgment on behalf of the majority of the Supreme Court of Canada in the recent and as yet unreported case of Lenard John Howarth v. National Parole Board,[FN1: <p>Judgment delivered on October 11, 1974.</p>] stated as follows:
In Calgary Power Ltd. v. Copithorne (1959 SCR 24), this Court rejected the contention that the duty to act judicially arose whenever private rights were affected. Martland J. said for the Court (at p 30):
“... the respondent submitted that a function is of a judicial or quasi-judicial character when the exercise of it effects the extinguishment or modification of private rights or interests in favour of another person, unless a contrary intent clearly appears from the statute. This proposition, it appears to me, goes too far in seeking to define functions of a judicial or quasi-judicial character. In determining whether or not a body or an individual is exercising judicial or quasi-judicial duties, it is necessary to examine the defined scope of its functions and then to determine whether or not there is imposed a duty to act judicially. As was said by Hewart L.C.J., in Rex v. Legislative Committee of the Church Assembly (1928, 1 KB 411 at 415):
‘In order that a body may satisfy the required test it is not enough that it should have legal authority to determine questions affecting the rights of subjects; there must be super-added to that characteristic the further characteristic that the body has the duty to act judicially.’
This passage was cited with approval by the Judicial Committee of the Privy Council in Nakkuda Ali v. M F deS Jayaratne (1951 AC 66, 1950,2 W.W.R. 927).”
10 The legal issue turns on whether the issuing of the certificate and the registering thereof in the Federal Court of Canada constitute in effect a final determination of any fundamental rights of the plaintiff.
11 It is clear that where a judgment fixes the liability for taxes and the amount thereof, there will be no further right to be heard on the merits of the case unless some error had occurred on the conduct of the trial or in the making of the decision which flows at law from the evidence adduced at the trial or from the facts alleged in the pleadings in the case of a judgment in default of either appearance or pleading. In the case of a certificate issued under section 223, however, there is a full right to be heard on the merits if an objection to the assessment is made within the time limited for making such an objection, and section 165 provides for the method of objecting, imposes an obligation on the Minister to reconsider the assessment and also confers the right on a taxpayer to appeal directly to the Tax Review Board or to the Federal Court.
12 The procedure laid down in the Act gives full right to the taxpayer to contest the assessment either before or after the certificate is registered depending on when the Minister has issued and registered the certificate. It is clear that the issuing of the certificate does not put an end to the normal right of the taxpayer to contest any assessment. It does, however, permit execution against the assets of the taxpayer to take effect even before the case as to liability has been finally heard, in the event of the taxpayer failing to pay the tax in the meantime. The obligation to pay the tax, pending final determination of the liability to do so, is not a final determination of the taxpayer's liability for the tax, since, notwithstanding any such payment, it is still open to him to contest the assessment and, if successful, to claim the return of any overpayment after final determination. These are obviously two different matters. Although it might be argued that the right to register a certificate, before the liability to pay the taxes has been finally determined, is an extraordinary one, and although that right carries with it a right to a writ of execution which in turn carries with it a right to a writ of execution which in turn carries with it the right to have the assets seized and subsequently disposed of by sale or otherwise, the execution aspect is merely a means of guaranteeing or of assuring the payment of the tax by the taxpayer either before or after the liability for same has been finally established.
13 Another important consideration in determining the issue before this Court is that the taxpayer has the right to apply to a court to prevent a sale or disposition of any assets seized and, pending final determination of the liability for tax, should a prima facie case be shown against the assessment and should it also be established that the taxpayer would be prejudiced by interim sale of the assets, he would be entitled to have any proposed sale or disposal of the assets stayed or, in special circumstances to have the execution lifted against certain assets which might be likely to spoil or deteriorate.
14 It has been held that there is nothing unreasonable, oppressive, unusual or extraordinary in the summary procedure where Parliament has provided enacting legislation providing for the registration of a certificate or in the effects which flow therefrom, where an execution has issued, notwithstanding an appeal against the assessment. See John Jacob Morch v Minister of National Revenue, [1949] Ex. C.R. 327, [1949] C.T.C. 250, 4 D.T.C. 649.
15 It has also been previously held that this Court has the right to examine the facts upon which the rights of the Minister to issue and register the certificate are founded. Refer MNR v. Bolduc (supra) at pages 267–8 [1149].
16 The obligation to pay the tax, subject to the right of contesting the ultimate liability for same, arises from the moment the assessment is made. But again, there is nothing extraordinary in this procedure, and it has for many years been used in other taxing statutes. In municipal law, for instance, the land becomes charged with the liability for taxes the moment the assessment is made and the tax rate is struck, subject again to the right to contest the assessment within the time limited in the relevant assessment act. The right to seize assets, without the owner of the assets having had the opportunity of being heard has been in existence for many years and is found for instance in various provincial statutes pertaining to absconding debtors. Under such legislation, an alleged debtor has always been allowed to apply ex parte for a writ of seizure of his alleged debtor's assets, on satisfactory proof being furnished that he believes that an alleged debtor has absconded the jurisdiction for the purpose of avoiding service of a legal process or of avoiding arrest or of defrauding his creditors. Following such seizure, the alleged creditor has also been entitled to have certain of the perishable goods of his alleged debtor sold without the debtor being heard. There exists for instance in the Province of Quebec, where the plaintiff in the present action resides, a procedure under articles 733 and 734 of the Code of Civil Procedure which allows seizure before judgment.
17 In the case of the Income Tax Act should the assets of a taxpayer be seized and it should be established at a later date that there was in fact no liability for taxes, then obviously he would be entitled to restitution. The principle of audi alteram partem applies to the question of final determination of liability which is a completely different question from the temporary deprivation of assets or even from the permanent loss of assets, providing there exists a right of restitution of the assets or of compensation for their loss.
18 The public policy behind the power in many taxing statutes to declare an amount payable before final liability for the amount has been determined and to take effective steps of securing such payment by means of seizure of assets and of sale of same if necessary, is of course founded on the principle that the tax collector must be furnished some means of preventing tax avoidance by dissipation of assets or by the taxpayer removing them from the jurisdiction. Where the fundamental right of the taxpayer to have his liability for taxes ultimately determined on the merits is preserved, such as in the Income Tax Act, the powers given the Minister of National Revenue by section 223 to ensure speedy and effective tax collection do not infringe the principle of audi alteram partem or the Canadian Bill of Rights. The section must, of course, be read with the other provisions of the Act to which I have referred.
19 The action is therefore dismissed with costs.
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