Lacroix, DJ:
1 The plaintiff, an employee of the Government of the Province of Quebec, Department of Revenue, alleges that he filed his income tax return for the taxation year 1971, and that on June 21, 1972 the Deputy Minister of National Revenue issued a notice of assessment, No 43738928, based on the sum of $16,268 instead of the plaintiff's estimate of $14,639.85.
2 On September 8, 1972 the plaintiff filed a notice of objection, and on August 30, 1973 the Minister informed the plaintiff that his objection had been dismissed and the assessment confirmed.
3 The plaintiff is now objecting to the assessment because it includes as income the sum of $1,628.15, which according to him was not income, and which the plaintiff did not receive or is not deemed to have received, since this $1,628.15 represents an amount the employer, the Government of the Province of Quebec, withheld at source from the plaintiff, in accordance with the Provincial Income Tax Act, for the taxation year 1971.
4 The plaintiff concluded that his statement of claim should be allowed and that the assessment dated June 21, 1972, bearing No 43738928, should be varied in accordance with the income tax return filed by the plaintiff for the taxation year 1971.
5 The defendant admitted paragraphs 1, 4 and 5 of the statement, as well as paragraph 3, but corrected the amount of $16,268, which should read $16,268.84, and contended that the plaintiff's assessment for the taxation year 1971 is based on the following facts: the plaintiff is employed by the Government of Quebec and receives from the latter a salary of $16,268.84.
6 Under the Provincial Income Tax Act, RSQ 1964, c 69, his employer deducted from the plaintiff's income the sum of $1,628.99, which the plaintiff contends is not part of his salary for 1971, and (he maintains) that the income from his employment is $14,639.85 and not $16,268.84, contrary to the submission of the defendant who maintains that this sum of $1,628.99 is actually part of his salary for the taxation year 1971.
7 Those are the facts submitted by the parties, to which the following facts should be added: the plaintiff filed his 1971 tax return (T4), and the evidence adduced before us at the hearing established that there was no discussion or dispute with respect to the amount that had been deducted at source by his employer, the Government of Quebec. On the contrary, when he was called as a witness, the plaintiff admitted that he was satisfied with the deduction at source of these amounts.
8 He expresses himself as follows at pages 3, 4, 5, 6, 7, 10 and 11 of his testimony:
Q. Does your employer deduct at source certain sums of money for taxes payable to the Government of Quebec?
A. Yes, my provincial taxes are deducted.
Q. Your provincial taxes are deducted at source?
A. Yes.
Q. Is that part of your income—do you admit that your salary or your wages during nineteen seventy-one (1971) was sixteen thousand two hundred and sixty-eight dollars and eighty-four cents ($16,268.84)?
A. Well, for provincial tax purposes, yes.
BY THE COURT: Q. Your salary?
A. Pardon?
Q. Your salary ...
A. Yes.
Q. Was sixteen thousand ($16,???.??)—the figure that was just given?
A. For purposes of the provincial Act.
Q. For purposes of your work?
A. Yes, yes.
Q. Now, Mr Morin, have you challenged those deductions at source? Have you objected to the provincial government? Have you ever ... what I mean is—challenged its right to deduct those amounts at source?
A. The provincial government?
Q. The provincial government.
A. I have not had the opportunity.
Q. You have not had the opportunity?
A. No.
Q. Neither by legal action nor by ...
A. No, I have not had the opportunity.
Q. You have not had the opportunity?
A. No.
Q. Are you satisfied with the provincial government's way of doing this?
A. So far, yes.
Q. You are satisfied?
A. Yes.
Q. You agree to the government's ...
A. Well, now ...
Q. I will ask you a question. Do ...
A. Yes, yes.
Q. ... you agree ...
A. I filed my tax returns. I was assessed, and I was satisfied.
Q. No, no. I'm not speaking about that. I am speaking about deductions at source.
A. Yes, yes. I did not challenge them.
Q. You did not challenge them?
A. No, no. I did not challenge them.
Q. You are satisfied with this ...
A. It doesn't mean I'm satisfied because I did not challenge them. I did not object.
Q. If you did not object ...
A. Perhaps I did not object because I was satisfied.
Q. You accept the fact that the government, your employer, makes those deductions?
A. Certainly, if I did not challenge them.
Q. My colleague asked you a while ago whether you were satisfied with having deductions made at source, as they are made at present.
A. Absolutely not.
Q. You answered a while ago that you were. Does this mean that you misunderstood the question?
A. No, no, but I am satisfied. If I do not object to the assessment that is made afterward, that means that I agree.
Q. That means that you are satisfied with the amount of tax you paid?
A. That's right.
Q. In Quebec or what? You are satisfied with what?
A. He asked me whether I was satisfied with deductions at source, that are made from my salary under the provincial Act.
Q. Yes.
A. I said yes.
9 That is the overall picture of what happened, and the only point at issue is whether the plaintiff's income is the salary which the provincial government pays him, or the amount that is left once income tax has been deducted.
10 It seems to us that both the federal and provincial statutes contain similar provisions concerning an employer's obligations towards his employee, and vice versa, in respect of liability for income tax.
11 Paragraph 41(b) of RSQ 1964, chapter 69, contains the following provisions under the marginal note “earned income”:
For the purposes of this section, “earned income” means the aggregate of
12 In the case at bar the parties submitted admissions of fact, in which it is stated that for the taxation year 1971 the employer issued a T4 in the plaintiff's name, on which total earnings before deductions were given as $16,268.84, and in paragraph 6 of the admissions it was stated that the Minister of National Revenue issued an assessment indicating that the plaintiff received in 1971 the sum of $16,268.84 as salary or wages.
13 Section 58 of the aforesaid provincial Act refers to the deduction that the employer must make. It reads as follows:
58. Every person, partnership or corporation paying salary or wages or other remuneration to an officer or employee, a superannuation or a retirement pension, a retiring allowance, an amount upon or after death of an officer or employee, in recognition of his service, to his legal representative, widow or any other person, an annuity payment or fees, commissions or other amounts for services, at any time in a taxation year, shall deduct or withhold therefrom such amount, as may be prescribed by the regulations of the Lieutenant-Governor in Council, and he shall, at such time as may be prescribed by the regulations, remit such amount to the Minister on account of the payee's tax for the same taxation year.
14 Lastly, section 61 of the said Act (RSQ 1964, c 69) stipulates the effects of such a deduction in the following specific terms:
61. Where an amount has been deducted or withheld under section 58 or remitted to the Minister under section 60, such amount shall be deemed, for the purposes of this act, to have been paid to the owner or beneficiary. 2–3 Eliz II, c 17, s 60.
15 Consequently, by withholding at source “such amount or deduction as may be prescribed by the regulations”, the employer was merely complying with the provisions of the Act, which the plaintiff could not escape.
16 The federal enactment contains the same provisions, and the statute that applied at the time was RSC 1952, c 148 and its amendments. Section 5 clearly states that:
5. (1) Income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year plus
17 Section 47 of the said Act states that:
47. (1) Every person payingat any time in a taxation year shall deduct or withhold therefrom such amount as may be prescribed ...
18 Subsection (3) of the said section 47 speaks of the effects of such a deduction, and states that any amount so deducted or withheld under these provisions is deemed to have been received by the person from whom it was deducted.
19 The legal provisions therefore seem to us to be very clear, and there is no doubt that the plaintiff's salary actually was $16,268.84 and that the deduction that could be made for income tax was $1,628.99, an amount that was not in dispute according to the plaintiff's own admission.
20 The defendant further cited subsection 16(1) of the federal statute, relying on the plaintiff's own testimony to the effect that he was satisfied with the deductions and that he was not objecting to them. In reply to a question by the Court the plaintiff stated that he had not challenged the amount. The defence also cited Article 9 of the Civil Code regarding the rights of the Crown, and the Court is of the opinion that this article is applicable here.
21 The point that still needs to be clarified is the “amount”, which has become the main argument of the suit, claiming that the plaintiff did not “receive” the sum of $16,268.84, and that the only sum he did receive was his actual income, namely only $14,639.85, that is his salary after tax deductions.
22 The plaintiff submitted to us a very well prepared brief on legal theory and jurisprudence, drawing the Court's attention especially to the interpretation of terms, and numerous extracts from Maxwell were quoted, making reference to the ejusdem generis rule. Interpretation is obviously necessary when the words are vague or the legislator's intention doubtful, but not when the words are clear and the legislator's intention is so expressed as not to leave any doubt.
23 In the case at bar the provincial and federal statutes state that income tax is payable on the salary, wages or remuneration that an employee receives during a taxation year. In this case the plaintiff was recorded in his employer's books as being entitled to a salary of $16,268.84. He contends that since the government deducted the amount of tax, he did not receive his full salary, given the fact that the amount of the tax was deducted at source. In other words, the plaintiff puts forward as a proposition of law that in order to receive his salary in the legal sense, he must actually touch or feel it, or have it in his bank account.
24 We regret to say that this proposition seems to us absolutely inadmissible, because the word “receive” obviously means to get or to derive benefit from something, to enjoy its advantages without necessarily having it in one's hands. In other words, the plaintiff can, and must, say, “what is left of my salary or income, after taxes, is $14,639.85”; it is not correct to say “my income is only $14,639.85”.
25 In the case at bar it is obvious that by deducting at source the amount of tax fixed by the regulations, his employer was paying the tax that he would have had to pay himself if he had received the full amount of his salary.
26 Having studied, read and re-read the references given by counsel for the plaintiff, we find that there are no grounds here for applying the ejusdem generis rule, except to say that the expressions “to benefit from, to gain advantage from or to profit from” are included under the generic term “to receive”.
27 This view is confirmed in a decision of the Privy Council, Hartland v. Diggines, [1926] A.C. 289. Instead of deducting money from his employees' salary, the employer paid his employees' taxes directly. These employees used the same argument as the plaintiff is using here, claiming that they had not “received” the money.
28 At the end of his reasons for judgment, Viscount Cave, speaking for the Court, said this:
It is true that the appellant did not receive cash in his hands, but he received money's worth year after year. This being so, I cannot resist the conclusion that the payment was in fact a part of his profits and emoluments as an officer of the company for which he has been properly assessed to tax.
29 This same principle was confirmed recently (March 26, 1973) in a very clear and very well-written decision by Roland St-Onge, QC, a member of the Tax Review Board, in Lucien Gingras v. MNR. At pages 4 and 5 of his judgment, he states the following:
[TRANSLATION]
The expression “touché” (received) does not necessarily mean that the full amount of the salary must be physically received by the payee or be deposited in full in his bank account.
According to the interpretation of section 5 it is sufficient to say that the amount of the salary was paid by the employer either to the employee himself or to his benefit, or that it was handed over to a third party under a federal or provincial statute.
30 FOR THESE REASONS:
31 THE COURT NONSUITS the plaintiff and DISMISSES his action with costs.
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