BETWEEN:
IN THE MATTER OF THE INCOME TAX ACT,
- and -
IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS
BY THE MINISTER OF NATIONAL REVENUE UNDER ONE OR
MORE OF THE INCOME TAX ACT, CANADA PENSION PLAN,
EMPLOYMENT INSURANCE ACT,
SANDRA STEIN
Applicant
AND:
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER
LEMIEUX J.:
A. Introduction
| [1] Sandra Stein ("the applicant"), pursuant to subsection 225.2(9) of the Income Tax Act ("the Act"), seeks a review of an ex parte authorization granted on June 23, 2000 to the respondent by Justice Pelletier of this Court. |
| [2] Justice Pelletier's authorization was made pursuant to subsection 225.2(2) of the Act, which reads: |
| (2) Authorization to proceed forthwith. Notwithstanding section 225.1, where, on ex parte application by the Minister, a judge is satisfied that there are reasonable grounds to believe that the collection of all or any part of an amount assessed in respect of a taxpayer would be jeopardized by a delay in the collection thereof, he shall, on such terms as he considers reasonable in the circumstances, authorize the Minister to take forthwith any of the actions described in paragraphs 225.1(1)(a) to (g) with respect to the amount. |
| [3] The measures which the respondent was authorized to take are set out in paragraphs 225.1(a) to (g), which read: |
| (a) commence legal proceedings in a court, |
| (b) certify the amount under section 223, |
| (c) require a person to make a payment under subsection 224(1), |
| (d) require an institution or a person to make a payment under subsection 224(1.1), |
| (e) require the retention of the amount by way of deduction or set-off under section 224.1, |
| (f) require a person to turn over moneys under subsection 224.3(1), or |
| (g) give a notice, issue a certificate or make a direction under subsection 225(1) before the day that is 90 days after the day of mailing of the notice of assessment. |
| [4] Specifically, the applicant seeks an order setting aside Justice Pelletier's order. |
| [5] Section 225.2(11) of the Act spells out the power of reviewing juge. It reads: |
| (11) Disposition of application. On an application under subsection (8), the judge shall determine the question summarily and may confirm, set aside or vary the authorization and make such other order as he considers appropriate. |
B. The Facts
| [6] On the 16th day of June 2000, the Canada Customs and Revenue Agency ("the Agency") assessed the applicant $155, 245.82 under section 160 of the Act in connection with a transaction between the applicant and her husband which occurred on November 8th, 1995. On the 20th day of June 2000, the Agency sought the ex parte authorization for immediate execution procedures in order to collect the amount assessed. |
| [7] Pursuant to the authorization, the Agency took the following steps: |
| (a) Under section 223 of the Act, on June 27, 2000, it certified the amount of $155,245.82 as an amount payable that had not been paid and that same day obtained a writ of seizure and sale; |
| (b) On July 11, 2000, it registered a mortgage against the applicant's principal residence which she is the registered owner; |
| (c) On August 15, 2000, pursuant to the writ of seizure and sale, the bailiff seized the art works in the applicant's home; |
| (d) In early July 2000, it issued requirements to pay to various financial institutions the applicant's RRSP holdings. |
| [8] In her affidavit in support of this review, the applicant stated at paragraphs 7, 8 and 9 as follows: |
| 7. I do not intend to leave Canada and I do not intend to sell or liquidate my assets; |
| 8. As a business person I can not (sic) manage my business life in the context where the Respondent may sue me in front of a Court, seize my assets or make third party seizures. |
| 9. Respondent clearly intends to sell my assets although the assessment may be annulled, as it more fully appears from Exhibit P-2 in bulk to avail as if recited at length. |
| [9] Also filed in support of her review was the affidavit of a chartered appraiser who valued the applicant's principal residence in excess of $750,000 following a "rapid inspection" constituting "a preliminary opinion". |
| [10] The respondent replied by filing an extract of the real property register of the applicant's residence showing a recent registration on December 4, 2000 by Revenue Quebec of a substantial mortgage for approximately the appraised value of the house which when added to the other registered mortgages at face amounts exceeds by several hundreds of thousand dollars the appraisal. |
| [11] No valuation of the art works was filed by the applicant on this review. However, in the record, their insured value indicates they are substantial. |
C. Discussion
| [12] Counsel for the applicant, at the end of the day, did not press the relief initially sought which was to set aside Mr. Justice Pelletier's authorization. Counsel for the applicant took another tact. He urged that I vary the order limiting it to sanction what the Agency had already seized but restricting any further collection efforts. |
| [13] In doing so, he placed reliance on the statement made by counsel for the respondent that, in accordance with the general policy of the Agency, the Agency would not press for the sale of the applicant's principal residence and the art works until the applicant's opposition to the $155,245.82 assessment had been adjudicated noting the Agency's realization on the RRSP's were doubtful because of legal restrictions. |
| [14] What separates the parties is the variation to the order sought by the applicant -- no further collection efforts by the Agency on the theory that enough is enough since, it is argued the value of what has been seized is well in excess of the amount of the assessment. |
| [15] Counsel for the respondent opposes the restriction sought arguing the uncertainty surrounding the valuation of the principal residence, the value of the art works, and the availability of the RRSP whose realisation would await determination of the validity of the assessment. |
| [16] I am not prepared to vary the authorization by prohibiting further collection efforts by the respondent. I am satisfied there were reasonable grounds for the authorization and, being of that view, exceptional circumstances would have to exist to restrict collection which is in jeopardy. I am not satisfied they exist in this case. |
| [17] It is true the Agency appears to have seized assets the applicant owns valued well in excess of the assessment. However, the applicant's home is precariously mortgaged, the value of the art works unmeasured, and access to the RRSP restricted. Moreover, there appears to be a confusion of the applicant's assets with those of her husband's who is the subject of much litigation. Furthermore, the inconvenience which the applicant may suffer from further collection efforts is not a ground for restricting them. The applicant has a remedy if the Agency acts abusively. |
| [18] For these reasons, the authorization granted by Justice Pelletier is confirmed. |
"François Lemieux"
Judge
Montreal, Quebec
December 13, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20001213
Docket: T-1080-00
BETWEEN:
IN THE MATTER OF THE INCOME TAX ACT,
- and -
IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS BY THE MINISTER OF NATIONAL REVENUE UNDER ONE OR
MORE OF THE INCOME TAX ACT, CANADA PENSION PLAN, EMPLOYMENT INSURANCE ACT,
SANDRA STEIN
Applicant
AND:
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1080-00
STYLE OF CAUSE:
IN THE MATTER OF THE INCOME TAX ACT,
- and -
IN THE MATTER OF AN ASSESSMENT OR ASSESSMENTS BY THE MINISTER OF NATIONAL REVENUE UNDER ONE OR
MORE OF THE INCOME TAX ACT, CANADA PENSION PLAN,
EMPLOYMENT INSURANCE ACT,
SANDRA STEIN
Applicant
AND:
HER MAJESTY THE QUEEN
Respondent
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: December 11, 2000
REASONS FOR ORDER OF THE HONOURABLE MR. JUSTICE LEMIEUX
DATED: December 13, 2000
APPEARANCES:
Mr. Louis-Frédérick Côté FOR THE APPLICANT
Mr. Pierre Lamothe FOR THE RESPONDENT
SOLICITORS OF RECORD:
Mendelsohn Rosentzveig Shacter FOR THE APPLICANT
Montreal, Quebec
Department of Justice Canada FOR THE RESPONDENT
Montreal, Quebec
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