Kerr, J:
1 This relates to an order to show cause, dated August 19, 1974, made by this Court pursuant to Rule 2400 of the Federal Court Rules, which imposed a charge on land or interest in land of the defendant more fully described in the said order.
2 The order to show cause why the land or interest should not be charged was initially returnable on October 21, 1974, and eventually, after substitution of new dates, came on for hearing and further consideration at Vancouver on April 7, 1975. It was heard jointly with two other similar orders to show cause, T-3013-74 and T-3008-74, the same counsel appeared for the parties, and the arguments were common to all three orders, mutatis mutandis.
Rule 2400. (1) The Court may make an order imposing a charge on land or an interest in land of a judgment debtor.
(2) Any such order shall in the first instance be an order to show cause, specifying the time and place for further consideration of the matter and imposing the charge until that time in any event.
(7) On the further consideration of the matter the Court shall, unless it appears (whether on the representation of the judgment debtor or otherwise) that there is sufficient cause to the contrary, make the order absolute with or without modifications.
(8) Where on the further consideration of the matter it appears to the Court that the order should not be made absolute, it shall discharge the order.
3 A certificate signed by Donald Brown Cameron, Director of Collections, Department of National Revenue, Taxation, under section 223 of the Income Tax Act, and section 24 of the Canada Pension Plan, was filed in this Court on August 16, 1974. The certificate states that it was certified on that day. The body of the certificate reads as follows:
I Donald Brown Cameron, Director of Collections, Department of National Revenue, Taxation, pursuant to section 223 of the Income Tax Act, section 24 of the Canada Pension Plan and/or section 79 of the Unemployment Insurance Act, 1971, do hereby certify that in addition to such other sums as may have been previously certified in a similar manner the following amounts are now owing and unpaid by the said MARGARET CATHERINE WILLIAMS
UNDER THE INCOME TAX ACT
ASSESSMENT DATE AMOUNT PENALTY INTEREST
1971 $ 4,888.00 $341.52 $ 695.86
1972 16,970.15 500.00 1,328.86
1973 16,985.00 500.00 300.39
UNDER THE CANADA PENSION PLAN
1971 $ 172.80 -- --
1972 176.40 -- --
1973 180.00 -- --Constituting a total amount of $43,038.98 together with additional interest at the rate of 6% per annum on the sum of $39,372.35 from the 16th day of August, 1974, to date of payment.
4 In support of the order to show cause there was filed an affidavit of Bertram C Callaway, an employee of the Victoria Regional Taxation Division, Collection Branch, which states, inter alia, that the said certificate remains wholly unsatisfied and that the whole amount thereof is owing to Her Majesty and is payable to the Receiver General of Canada.
5 Section 223 of the Income Tax Act 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.
6 Section 158 of the Income Tax Act is also relevant and is as follows:
158. (1) The taxpayer shall, within 30 days from the day of mailing of the notice of assessment, pay to the Receiver General of Canada any part of the assessed tax, interest and penalties then remaining unpaid, whether or not an objection to or appeal from the assessment is outstanding.
(2) Where, in the opinion of the Minister, a taxpayer is attempting to avoid payment of taxes, the Minister may direct that all taxes, penalties and interest be paid forthwith upon assessment.
7 At the hearing an affidavit, sworn to by the defendant, was filed, stating, in part, that on or about August 22, 1974, she received notices of assessment, Exhibits A, B and C to the affidavit, that they were the only assessments she received, that she is the wife of Arthur James Williams, that she earned no income that would attract the tax set forth in the Exhibits, and that prior to receipt of the Exhibits she received no demands or inquiries with respect to taxes owed by her. The said notices are dated August 16, 1974.
8 Counsel for the plaintiff rose to tender certain documents in support of the Crown's application for the charging order, but objection to their reception by the Court was raised by counsel for the defendant, whereupon counsel for the plaintiff withdrew the tender. I do not know whether the documents would have been informative.
9 Section 900 of the Income Tax Regulations provides certain delegation of the powers and duties of the Minister to specified officials. It does not expressly mention section 158 of the Act, but subsection (1) of the said section 900 provides that an official holding a position of Assistant Deputy Minister of National Revenue for Taxation may exercise all the powers and perform all the duties of the Minister under the Act. Subsection 900(6) of the Regulations reads, in part, as follows:
900. (6) The Director, Collections Division of the Department of National Revenue, Taxation,[FN1: <p>Donald Brown Cameron, who signed the certificate in question, was such anofficial.</p>] may exercise the powers and perform the duties of the Minister under
10 At the hearing on April 7, counsel for the defendant argued principally to the following effect:
11 A. That the notices of assessment bear the same date, August 16, 1974, as the date of the certificate in question; that the certificate is not valid unless there was a prior direction by the Minister under subsection 158(2) of the Income Tax Act (or by an authorized delegate), that it must be shown in the certificate that such direction was made, but the certificate does not show that any such direction was made, nor has it otherwise been shown to have been made; and it is null, void and of no effect.
12 B. Paragraph 1(a) of the Canadian Bill of Rights declares the right of the individual to enjoyment of property and the right not to be deprived thereof except by due process of law, and by virtue of section 2 of that statute the Income Tax Act must be so construed and applied as not to abrogate, abridge or infringe, or to authorize the abrogation, abridgment or infringement of the said rights, and in particular, by clause (e), it shall not be construed or applied so as to deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations; that section 223 of the Income Tax Act is contrary to the Canadian Bill of Rights, and the aforesaid certificate registered in this Court coupled, with the charging order, constitutes an infringement of the plaintiff's right to enjoyment of her property and her right not to be deprived thereof except by due process of law, and she has been unlawfully deprived of her right to a fair hearing.
13 As to point A, I am not able to infer or conclude from what has been presented and submitted herein that the certificate was made by Cameron and registered in this Court without any prior direction having been made under subsection 158(2) of the Act. The certificate bears the same date, August 16, 1974, as the notices of assessment, but subsection 158(2) and section 223 are designed to empower effective tax collection, and I think that the fact that this certificate bears the same date as the notices of assessment should of itself not raise any doubt as to its validity or warrant an inference that there was not any prior direction by the Minister under subsection 158(2). The making and registration of a certificate pursuant to section 223 does not terminate the right of a taxpayer to contest an assessment, for he may do so by serving on the Minister a notice of objection in accordance with section 165 and by appealing to the Tax Review Board in accordance with section 169 or to the Federal Court of Canada in accordance with sections 172 and 175; and I think that Rule 2400 of the Federal Court Rules does not provide an additional means or procedure for determining the merits of an assessment on the further consideration of an order to show cause under that Rule.
14 As to point B, in a recent decision, dated February 25, 1975, T-2013-74, Oneil Lambert v Her Majesty the Queen, [1975] C.T.C. 120, 75 D.T.C. 5065, Mr Justice Addy of this Court referred to an argument respecting section 223 of the Income Tax Act, and he said, in part, as follows (pp 122, 126 [5066, 5969]):
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. ...
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.
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.
15 I reject the argument by counsel for the defendant that section 223 of the Income Tax Act is contrary to the Canadian Bill of Rights and that the certificate produced and registered in this Court, coupled with the subsequent charging order, has deprived or is depriving the defendant of the right to a fair hearing and constitutes an infringement of her right to enjoyment of her property and her right not to be deprived thereof except by due process of law.
16 Therefore, on the further consideration of the matter pursuant to Rule 2400, it does not appear to me that sufficient cause has been shown why the aforesaid charging order, dated August 19, 1974, should not be made absolute. The order will accordingly be made absolute, with costs, which I fix at $75.
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