Estate of Dora Greenstone v. Minister of National Revenue, [1991] 2 CTC 2219, 91 DTC 969

Tremblay, T.C.J.: —This appeal was heard on September 25, 1989 at the City of Montreal, Quebec.

1. Point at Issue

The point is whether the appellant is correct in not including the three per cent surtax, payable under provision 180.1 of the Income Tax Act, R.S.C. 1952,

c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") in the computation of its tax for the 1986 taxation year. This provision is found in Part 1.1 of the Act. The appellant contends that Part I-1 is only a subpart of Part I and is not in substance a separate part of Part I. Consequently it is not a surtax to be paid because 120.1(2)(b) already quantified for the appellant the taxes applicable to Part I. The surtax computed, pursuant to 120.1 (2)(b), the amount to $578. The respondent contends that Part 1-1 is a separate part from Part I and the three per cent surtax provided by provision 180.1 is applicable to the appellant and therefore the surtax amounts to $2,456.58.

2. Burden of Proof

2.01 Generally speaking, the burden of proof concerns the interpretation of the facts involved in an appeal. However, in the instant case, the material facts are not in dispute. Indeed, all the facts assumed by the respondent in paragraph 4 of the reply to notice of appeal are admitted by the appellant. They read as follows:

4. In assessing the Appellant for the 1986 taxation year, the respondent relied, inter alia, on the following assumptions of facts:

(a) Dora Greenstone died on August 25, 1986;

(b) the Appellant, as legal representatives of Dora Greenstone, elected under section 110.4(8)(a) of the Income Tax Act to forward average an income of $71,460. ;

(c) in filing the return of income of Dora Greenstone for the 1986 taxation year, the Appellant computed the individual surtax to be paid on the tax payable under Part I, by reading Part I without reference to subsection 120.1(2) that provides for the additional tax to be paid on the accumulated averaging amount;

(d) the additional tax to be paid by the Appellant under subsection 120.1(2) was $16,990. ;

(e) The Respondent computed pursuant to subsections 180.1(1) and (2) of the Act, the individual surtax to be paid on the tax payable under Part I including that additional tax under subsection 120.1(2)

The appellant admitted also subparagraph (e) in the sense that in fact that’s what the respondent did. However, he disagrees with the respondent contending that subsections 180.1(1) and (2) of the Act has no application in the instant case.

In sum, the crux of the matter is whether or not Part 1.1 is a separate part of Part I. If not, the appeal must be allowed.

3. Parties’ argumentation

Because of the particular nature of the matter, I decided to quote at length parties' argumentation.

3.01 Appellant's Argumentation

The constitutional authority for Canadian Taxation is derived from the Constitution Act, 1867, (formerly the British North America Act, 1867). Under section 91, the Parliament of Canada has exclusive legislative authority to raise money “by any mode or system of taxation".

The Canada Gazette Part III is published under authority of the Statutory Instruments Act. The purpose of Part III is to publish public Acts as soon as is reasonably practicable after they have received Royal Assent in order to expedite their distribution.

Part 111 of the Canada Gazette contains the public Acts of Canada and certain other ancillary publications, including a list of Proclamations of Canada and Orders in Council relating to the coming into force of Acts. From time to time there will also be published in an issue of Part III, the Table of Public Statutes from 1907 to the date shown on the Table, together with a table of Acts and Ministers responsible therefor.

Under Part II of the Canada Gazette will be found the Consolidated Index of Statutory Instruments. Included therein will be found the Interpretation Act (R.S.C. 1970, c. 1-23, as amended.)

Section 2 of the Interpretation Act states the Interpretation Act applies to all Acts of Parliament. As such, it has legal applicability to the interpretation of the Income Tax Act. (Section 3(1) and not section 2 which states that the Interpretation Act applied to all Acts of parliament.)

Pierre-André Côté writes in the Interpretation of Legislation in Canada (ISBN:2-89073-205-3) Les Editions Yvon Blais Inc., 1984, that the purpose of the Interpretation Act is to ensure precision in the drafting and construction of enactments. Concision is also important; by enacting rules that apply in the absence of [any] indication to the contrary, the Interpretation Acts serve as the general law of statutory construction and help to abbreviate statutes.

Section 3 of the Interpretation Act states "Nothing in this Act excludes the application of an enactment of a rule of construction applicable thereto and not inconsistent with this Act".

In connection therewith, it is noteworthy to draw the attention of the Court to the fact that under section 3 of the Interpretation Act relating to the Rules of Construction there is no exclusion to the Dewey Decimal Classification and Relative Index System.

Section 11 of the Interpretation Act states "Every enactment shall be deemed remedial, and shall be given such fair, large and liberal construction and interpretation as ensures the attainment of its objects".

The rules of construction of taxing statutes are well established. It has been said that the difficulties as to the interpretation of statutes consist chiefly in the application to various and complicated circumstances of words of a wide and general meaning, and judges have often subjected legislation to adverse criticism because of the phraseology chosen. That the choice of language is not an easy task for the draftsman, however, has been well stated by Stephen, J., in 1891 when he said: “It is not enough to attain a degree of precision which a person reading in good faith can understand, but it is necessary to attain if possible to a degree of precision which a person reading in bad faith cannot misunderstand. It is all the better if he cannot pretend to misunderstand it”. (/n re Castioni (1891), 1 Q.B. 149 at 167).

No rule of construction is allowed to defeat the plain intention of the Legislature. This has been stated as follows: "The duty of the Court is in all cases the same, whether the Act to be construed relates to taxation or to any other subject; namely, to give effect to the intention of theLegislature as that intention is to be gathered from the language employed, having regard to the context in connection with which it is employed, Courts have to give effect to what the Legislature has said”. (A.-G. v. Carlton Bank (1899), 2 Q.B. 158, at 164).

The rédacteurs of the Income Tax Act saw fit to use a decimal classification system not only to number the separate parts of the Income Tax Act but also the sections, e.g., 127.1 et seq.

There are no provisions contained in the Income Tax Act to exclude the decimal classification system.

The references contained in paragraph 10 above are the exemplification and concretization of the Dewey Decimal Classification and Relative Index System as devised by Melvil Dewey.

On September 25, 1989, before this honourable court, M Chantal Jacquier asked the Appellant's Expert Witness, Mr. Sol Katz, M.L.S., Cataloguing Librarian, Concordia University, Montreal, Quebec, if Mr. Katz was aware if the Dewey Decimal Classification and Relative Index System was used in the drafting of any legal statutes.

Mr. Katz replied that under the Dewey Decimal Classification and Relative Index System Law was treated as a Social Science and was referred to in Vol. 2 (The Dewey Decimal Classification and Relative Index System consists of 24 volumes) and that he had only Vol. 1 with him in court.

There is an old legal adage that a lawyer never asks a witness a question that he already does not know the answer to. An extract of the Labour Code, R.S.Q., Chapter c-27 (Annex 7) and an extract of the Act to Amend the Agricultural Stabilization Act, R.S.C., c. 36 (1985) (Annex 8) clearly show that the rédacteurs of these Acts used a decimal classification system to number the chapters and sections of their legislation. There is no reference in either the Labour Code or the Agricultural Stabilization Act that the rédacteurs used or did not use the Dewey Decimal Classification and Relative Index System. The only indisputable fact is that we have demonstrated to this honourable court that the rédacteurs of Federal and Provincial legislation have seen fit to embody a decimal classification system based upon the Principle of Notational Hierarchy.

Annex 9 is a letter dated October 13, 1989 signed by Mr. Sol Katz confirming that in his opinion the rédacteurs of the Labour Code and the Agricultural Stabilization Act embodied the principles of Melvil Dewey in these Acts and his aforementioned letter states “Accordingly, I conclude that there does exist legislation which is arranged along the same principles as the Dewey Decimal Classification".

Included also is a copy of the report prepared by Mr. Sol Katz submitted on September 25, 1989 before this honourable Court (Annex 10), together with his curriculum vitae (Annex 11), bibliography (Annex 12) and schedules from Volume 2 of the Dewey Decimal Classification and Relative Index, devised by Melvil Dewey, Edition 19, Forest press, 1979, relating to the classification numbers for works on law (other than international law) (Annex 15, separately bound).

Dr. Elmer A. Driedger, Q.C., B.A., LL.B., LL.D., Professor of Law, University of Ottawa, One-Time Deputy Minister of Justice and Deputy Attorney General of Canada, in the Second Edition of his work on the Construction of Statutes, page 87, states the modern interpretation principle to be applied in the following concise terms:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. . . Earlier expressions, though in different form, are to the same effect; Lord Atkinson in Victoria (City) v. Bishop of Vancouver Island (1921) A.C. 384 at p. 387 put it his way:

In the construction of statutes their words must be interpreted in their ordinary grammatical sense, unless there be something in the context, or in the object of the statute in which they occur, or in the circumstances with reference to which they are used, to show that they were used in a special sense different from their ordinary grammatical sense.

Dr. Driedger, on pages 79 and 80 of the Composition of Legislation, Legislative Forms and Precedents, 2nd Edition, Revised, published by the Department of Justice, Ottawa, (Annex 13), states under "Headings and Parts":

It is frequently desirable to insert headings and sub-headings as a guide to the subject matter of the Act. These are regarded as part of the Act, and may influence the interpretation of the sections under the headings. Headings should therefore be selected with care.

A heading should not form part of the text and should remain a grammatical whole if all headings are deleted. Examples of improper uses of headings are:

Applications

15. A fee of five dollars shall be paid for each.

Provisions Applicable to Railroad Companies

16. Every application for the incorporation of a company

shall be signed by at least twenty-five persons.

An Act may be divided into Parts, either with or without an appropriate heading. It may be done to break up the Act by subject, as in the case of a book, for the purpose of assisting the reader in finding his way through it. Or it may be done for more technical reasons. For example, sometimes special definitions are necessary for a particular subject matter and it is more convenient to set them out with the sections to which they apply than at the beginning or end of the statute. Again, division of an Act into Parts may facilitate cross- references; for example, an Act may impose two kinds of taxes and it may be convenient in the general sections to distinguish between taxes under Part I and those under Part II. An Act may be divided into different Parts applying to different classes of persons; thus, an Act relating to companies might have one Part applying only to railway companies, another applying only to telegraph companies, and so on; in each Part the word company can be used without having to specify each time the kind of company; alternatively, each Part could have its own definition of company.

There is no general rule for determining when an Act should or should not be divided into Parts. It has been said that an Act should be divided into Parts only where each Part might properly form the subject of another Act. That might be one instance where the division might usefully be made, but there are other instances where an Act can, and should, be so divided.

Dr. Driedger on pages 167 and 168 of Annex 13 further states:

Acts may also be divided into Parts. Lors Thring advised that as a general rule the division into Parts should only be used where the subject matter of the Act involves different heads of law, each of which might without impropriety form the subject matter of a separate Act, or contain classes of enactments, such as transitional provisions, distinct in their character from the rest of the Act. That may have been the practice in Thring's time, but it certainly is not now, at least in Canadian legislation. The original Unemployment Insurance Act consisted of 5 Parts as follows:

Part I — Organisation of Unemployment Insurance Commission

Part II — Employment Service

Part III — Unemployment Insurance

Part IV — General

Part V — Transitional and Repeal

Part II could have been the subject matter of a separate Act, and Part V included transitional provisions of the kind Thring had in mind. But not one of the remaining Parts could have formed the subject matter of a separate Act.

The National Defense Act, the National Housing Act, and many others are divided into Parts, and are the better for it, notwithstanding that the various Parts could not form separate Acts.

If the division of an Act into Parts will make it more readable, will enable the scheme of the Act to be more readily comprehended, or will facilitate the drafting or the passage of the measure, then it is not only proper but desirable so to divide it.

Parts are normally designated Part I, Part II, etc., and usually have a title, printed in large capitals. Part numbers do not in any way affect the numbering of the sections.

Under Annex 13, page 167, attached hereto, Dr. Driedger gave as an example that the original Unemployment Insurance Act consisted of 5 Parts as follows: Part I, Part 11, Part 111, Part IV and Part V. Under Annex 13, page 168, attached hereto, Dr. Driedger wrote Parts are normally designated Part I, Part II, etc., and usually have a title, printed in large capitals.

By virtue of the aforegoing examples, it is logical to assume that Dr. Driedger considered Part I, Part Il, Part III, etc., as separate parts, each to be mutually exclusive of each other part. He never in his examples introduced a Part 1.1 or Part 11.1 as examples of a separate part.

The Dewey Decimal Classification and Relative Index is a universally accepted classification system which is exactly the notational system adopted for referencing thoughout the Income Tax Act.

The Dewey Decimal Classification and Relative Index is organized under the Principle of Notational Hierarchy which means that each subdivision of a topic has one digit more in its notation than the topic itself. This topic in turn has one more digit than the topic of which it forms a part. Topics with the same number of digits are coordinate and mutually exclusive.

Classes at any given level, then, are subordinate to a class whose notation is one digit shorter, coordinate with topics whose notations have the same number of digits, superordinate to topics with numbers one or more digits longer. (See Annex 6)

From the above it follows logically that Parts 1, Il and III are indeed mutually exclusive while Part 1.1 is a subpart of Part I.

Bearing in mind the applicability of Paragraphs 6 and 7 above to the caseat bar together with Revenue Canada Interpretation Bulletins 417R and 473 (Annex 14) that enunciate the general provision in construing statutes that there must be adherence to generally accepted principles so long that there is no contrary provision in the Act.

There is no provision throughout the Interpretation Act and/or the Income Tax Act to deny the reference to the Dewey Decimal Classification and Relative Index System.

The Respondent's argument contained under Paragraph 6 of the Reply to Notice of Appeal states "the Dewey system of classification of books has nothing to do with the way the Income Tax Act is divided". This statement is incorrect and is not in accordance with what Dr. Driedger says in Annex 13 on page 79:

An Act may also be divided into Parts, either with or without an appropriate heading. It may be done to break up the Act by subject, as in the case of a book, for the purpose of assisting the reader in finding his way through it.

In Stubart Investments Ltd. v. The Queen, (1984) 1 S.C.R. 536, [[1984] C.T.C. 294] at 573-79, (84 D.T.C. 6305) the Court recognized that in the construction of taxation statutes the law is not confined to a literal and virtually meaningless interpretation of the Act where the words will support on a broader construction a conclusion which is workable and in harmony with the evident purposes of the Act in question.

Judge J.P. Goetz of the Tax Court of Canada in the case of Johnston v. M.N.R., [[1988] 1 C.T.C. 2476] 88 D.T.C. 1300 said "it is not the function of the judiciary to write the law but to interpret it".

In the case at bar there is no factual ambiguity under paragraph 120.1 (2)(b) which is explicit in stating “the aggregate . . . under this Part", which clearly translates into the aggregate of taxes under all of Part I. The Appellant alleges that since section 180.1 of the Income Tax Act (charging provision for the individual surtax) is contained under Part 1.1 of the Income Tax Act and because of the application of the Dewey Decimal Classification and Relative Index System, Part 1.1 is a sub-part of Part I, not a separate part of the Income Tax Act. Hence, there is not provision under the Income Tax Act for charging a surtax on the accumulated averaging amount under section 180.1, because of paragraph 120.1(2)(b).

Revenue Canada is unable to rebut the applicability of the Dewey Decimal Classification and Relative Index System to the Income Tax Act and nowhere in any Technical Notes to the Income Tax Act issued by the Department of Finance does it state that the rédacteurs of the Income Tax Act created their own innovative Decimal Classification System. The Minister does not have the statutory authority to use his discretionary powers to give an interpretation to a statute contained in the Income Tax Act by denying the applicability of the universally accepted Dewey Decimal Classification and Relative Index System since nowhere is the Minister able to make reference to a contrary enactment in the legislation and he is bound to respect sections 3 and 11 of the Interpretation Act.

The forms issued by Revenue Canada for the 1985 and 1986 taxation years support the manner in which the Appellant calculated its income tax, i.e. that there is no provision in the forms issued for charging a surtax on the accumulated averaging amounts.

That for all of the aforementioned reasons, this Appeal is well founded in fact and in law (de facto et de jure).

3.02 Respondent's Argumentation

The evidence

At the hearing held on September 25, 1989, the Appellant's representative, Mr. Richard Venor, admitted the facts stated by the Minister of National Revenue in paragraph 4 of the reply to the Appellant's notice of appeal.

The evidence was completed by the Appellant with the testimony of Mr. Brian Greenstone who tabled a copy of the tax return (including forms) filed by him on behalf of Dora Greenstone for the 1986 taxation year in issue (exhibit A-1).

Opinion evidence on the Dewey Decimal Index Classification System was given by Mr. Sol. Katz, a cataloguing librarian (exhibit A-2). We objected, and continue to object, to the admissibility of that part of the testimony and of the report (exhibit A-3, pages 4 to 6) of Mr. Katz that relates to the construction of the Income Tax Act for the obvious reason that no witness can be called upon to interpret the law. The Court took our objection under reserve at the hearing.

In cross-examination, Mr. Sol Katz admitted that he had no experience in legislative drafting and that he had never drafted a legislative document. Mr. Sol Katz admitted also that the book called "Dewey Decimal Classification and Relative Index" (as well as the “Abridged Dewey Decimal Classification and Relative Index") to which he was referring dealt with the classification of books or other documents or objects. He added that the book contained a section that applied to classifying law materials, but Mr. Katz confirmed that nothing in that book explains how a statute is to be structured.

We remind the Court that this is the evidence given at the hearing. We submit that this evidence differs from the facts which are set out in Part I and in paragraphs 12 to 15 of Part III of the pleadings of the Appellant's representative, called "Appellant's summation".

Moreover, in that "summation", despite the fact that the evidence was closed at the hearing of September 25, 1989, the Appellant’s representative brought additional evidence:

— an internal memorandum of Revenue Canada, Taxation, dated June 2, 1988, confirming the assessment in issue but recommending that the interests imposed be remitted because the forms were silent on the computation of the surtax of deceased persons on the forward averaging amount (Annex 1 of the Appellant);

— a copy of that part of the book "Dewey Decimal Classification and Relative Index", relating to the classification of law materials (Annex 15 of the Appellant), that Mr. Katz did not have with him at the hearing and that the Appellant's representative produced even though the Court had indicated, at the hearing, that it was not evidence appropriate to determining the issue because it does not say how to number provisions of a statute;

— a letter of Mr. Sol Katz dated October 13, 1989, that is, after the hearing, giving his opinion on two pieces of legislation, relying on the Dewey Decimal Classification System to do so (Annex 9 of the Appellant).

In answer to paragraph 7 of Part I and paragraphs 14 and 15 of Part III of the "Summation" of the Appellant's representation which comment on this additional evidence, we submit:

first the internal memorandum of Revenue Canada confirmed the tax assessment in issue; it did not confirm the computation of the tax by the Appellant as the Appellant's representation tries to suggest (paragraph 7 of Part I of his "Summation").

second the opinion given by Mr. Katz in his letter dated October 13, 1989 is not admissible insofar as the interpretation of statutes is concerned. Mr. Katz was accepted as an expert witness by the Court to explain to the Court how the Dewey Decimal Classification System works. But a witness may not give an opinion on domestic law, and we consequently object to the admissibility of this letter.

third the part of the American book "Dewey Decimal Classification and Relative Index" relating to law materials deals with the classification of those materials. Classification of works on law in a library has nothing to do with the drafting of the law itself and its enactment by Parliament! We submit that the book is not relevant to the issue before the Court, and that the individual surtax must be computed according to the law as interpreted in its own context.

The law

Part 1.1, a separate part of the Act

The question of law is the following: how to compute the individual surtax to be paid by the Appellant under Part 1.1 of the Income Tax Act?

Is it calculated on the tax payable under Part I, including the amount to be added under paragraph 120.1(2)(b) of the Act, Part 1.1 being a separate part of the Act? This is our submission.

Or is it calculated on the tax payable under Part I without taking into account the amount under paragraph 120.1(2)(b) of the Act, Part 1.1 being only a "subpart of Part I", as is submitted by the Appellant?

The Appellant's representative admits, in paragraph 5 on page 2 of its “summation” that “if Part 1.1 of the Income Tax Act is a separate part of the Income Tax Act (. . .) Revenue Canada's position is correct”.

In paragraph 6 of part II of his “summation”, the Appellant's representative seems to allege that section 180.1 is not only within Part 1.1, the heading of which is “Individual Surtax", but also within Part I. We submit that this shows a lack of understanding as to how federal statutes are structured.

What is the Structure of a Federal Statute?

A first insight as to how a statute is to be structured can be gained from the Interpretation Act, R.S.C. 1985, c. 1-21, in subsections 41(2) and (3). Subsection 41(2) shows that a statute may be divided into parts, divisions and sections. Subsection 41(3) indicates that a section may be composed of subsections containing paragraphs, subparagraphs, clauses and subclauses. See Tab A.

The Guide canadien de redaction legislative française gives more details on the structure of a federal statute, under the title "Eléments de la loi" (see Tab B). The components of a federal statute are:

Part	Partie
Division	Section
Subdivision	Sous-section
Section	Article
Subsection	Paragraphe
Paragraph	Alinéa
Subparagraph	Sous-alinéa
Clause	Division
Subclause	Subdivision
Sub-subclause	Sous-subdivision

That structure appears clearly when looking at the Sectional List of the Income Tax Act in the CCH edition (see Tab C) Each part appears as a distinct part. No part is a subpart of another part. Where it is necessary to divide a part, this is done with divisions as in Part I. If Part 1.1 was a division of Part I, it would be called a division, not a part.

In their book Les Principes de l'imposition du revenu au Canada, Guy Lord and Jacques Sasseville confirm that the Income Tax Act follows this structure (see Tab D, at 36-37).

The authors add that the Income Tax Act has 22 parts (the Income Tax Act had 22 Parts at the time of publication and had 28 Parts in 1988), Part I being the most important one and the only one divided into Divisions. The authors then refer to Parts 1.1 to XIV and comment as follows:

Chacune de ces Parties porte un titre spécifique qui identifie l'impôt qu'on entend prélever. Chaque Partie traite d'une situation particulière de nature technique et lève un impôt spécial. Chaque Partie est complète en elle-même et répond donc, en théorie, aux quatre exigences de toute mesure fiscale:

— qui paye l'impôt?

— sur quoi porte l'impôt?

— quel est le taux de l'impôt?

— quelles en sont les modalités de paiement?

(. .) (p. 35)

We will see that it is precisely the case of Part 1.1. Louis-Philippe Pigeon in Drafting and Interpreting Legislation (see Tab E, at 29) and E.A. Driedger in The Composition of Legislation (see Tab C, at 168) confirm the usefulness of the division of an Act into parts. These authors do not say that a part called "Part 1.1” is not a part but a "subpart", as the Appellant's representative suggests at the end of paragraph 18 of Part III of his "summation".

Why is Part 1.1 called Part 1.1 and not Part II? The answer is obvious: Because when Part 1.1 was first enacted, Part II was already enacted and the scheme of the Act called for the provisions relating to the individual surtax to be placed right after the Part I tax on which it was computed. When Parliament amends a statute, it does not renumber the existing provisions, in order to avoid risk of error and confusion in the references; it inserts new provisions and, if necessary, adds a lettered section or a decimal number. Examples are given in Louis-Philippe Pigeon, Drafting and Interpreting Legislation, at 20-21: paragraph (aa) added (seeTab E); in Driedger, The Composition of Legislation, at 171: section 4.1 added, and subsection (2.1) added (see Tab F); and in Guide canadien de redaction legislative française under the title “Modifications legislatives” (see Tab G): paragraph (c.1) added. This is the case of Part 1.1 of the Income Tax Act, which was recently enacted by Parliament, that Part being first applicable for the 1976 taxation year. (Other parts have been recently inserted by Parliament in the same way in the Income Tax Act: Part 11.1, Part 1V.1, Part VI.1, Part X.1, Part X.2, Part XI.1, Part XI.2, Part XI.3, Part XII.1, Part XII.2 and Part XII.3).

Of course, a part may incorporate by reference another part of the same Act, or a portion of another part. For example, when one looks at Part XIII of the Income Tax Act, the first section of Part XIII contains a reference to Part I:

212.(1) Every non-resident person shall pay an income tax (. . .) on every amount that a person resident in Canada (. . .) is deemed by Part I to pay to him on account of (certain amounts).

It is the same in Part 1.1 where one finds, in subsections 180.1(1), (2) and (4), a cross-reference to “Part I”, the individual surtax being calculated on the tax payable under Part I.

Legislative History of Part 1.1

Part 1.1 was enacted by section 65 of chapter 4 of the Statutes of Canada 1976-1977, the title of which is an Act to amend the statute law relating to income tax (see Tab G):

65.(1) The said Act is further amended by adding thereto immediately after section 180 thereof, the following Part:

Part 1.1 Individual Surtax (. . .)

65.1(1) Ladite loi est en outre modifiée par l'insertion, apres l’article 180, de la Partie suivante:

Partie 1.1 Impôt Supplémentaire (Revenus des Particuliers) (. . .)

[Emphasis added.]

Parliament clearly enacted Part 1-1 as a part, not as a division, and said it!

Part 1.1 contains two sections: sections 180.1 and 180.2.

Those two sections were amended by chapter 6 of the Statutes of Canada 1986 (see Tab H), applicable for the 1985 and 1986 taxation years. Then in1986 again, the first portion of section 180.1 (subsections (1) to (3)) was amended by chapter 55, for the 1986 and subsequent taxation years (see tab I).

The version of the Act, as applicable for Dora Greenstone 1986 taxation year, reads as follows:

180.1(1) Every individual liable to pay tax under Part I for a taxation year shall pay a tax equal to the aggregate of:

(a) 1 /2% of his tax payable under Part I for the year,

(b) 5% of the amount, if any, by which his tax payable under Part I for the year exceeds $6,000, and

(c) 5% of the amount, if any, by which his tax payable under Part I for the year exceeds $15,000.

Subsection 180.1(1) is the charging provision of the surtax: It says who pays the surtax (the individuals), what is the rate of the surtax for 1986 and on what it is payable (on the tax payable under Part 1). But what is the tax payable under Part I? Subsection 180.1(2) explains:

(2) For the purposes of subsection (1), the tax payable under Part I by an individual for a taxation year is (. . .)

(b) (. . .) the amount that would be his tax payable under that Part for the year if that Part were read without reference to subsection 120(1) and sections 122.3, 126, 127, 127.2 to 127.4 and 127.54

“that Part" being of course Part I referred to in the preamble of subsection 180.1(2).

In the provisions to be excluded by virtue of paragraph 180.1(2)(b), it should be noted that there is no reference to section 120.1. This means that the individual surtax is a percentage of the tax payable under Part I including section 120.1. There is no ambiguity at all in the Act in this regard.

Moreover, if Part 1.1 was a division of Part I, how could one give a meaning to subsection 180.1(4) which specifies that certain sections of Part 1, such as sections 152, 153, 165 and 169 relating to assessments, payment of tax, objections and appeals, apply to Part 1.1?

Parliament has clearly enacted Part 1.1 as a separate part of the Income Tax Act.

This should answer most of the arguments raised by the Appellant's representative.

Case Law on Part 1.1

Section 180.1 was considered recently by Mr. Justice Rip in W. Grant Thompson v. M.N.R., [[1989] 1 C.T.C. 2134; 89 D.T.C. 66] (see Tab J). The issue in that case was whether subsection 120(2) (that provides for a deemed payment of 3 per cent of the tax otherwise payable under Part I) had to be taken into account for the purposes of section 180.1. The answer of the Court was negative:

In my view the Respondent's calculation of the Appellant’s surtax is correct. The "tax payable under Part I" for 1985 is an amount of tax fixed by assessment and adjusted to take into account the provisions of the Act contained in paragraph 180.1(2)(b); the tax payable is not reduced by subsection 120.(2).

Subsection 120(2), like section 120.1 in our case, was not a provision excluded by virtue of paragraph 180.1(2)(b).

Applying section 180.1 to the Appellant

Consequently, because section 120.1 must be taken into account in determining the tax payable under Part I for the purpose of the individual surtax, the forward averaging addition provided for in paragraph 120.1(2)(b) must be included in this calculation of the tax payable under Part I. Accordingly, the computation of the surtax payable by the Appellant for the 1986 taxation year is:

Tax payable under Part I for 1986 determined

pursuant to subsection 180.1(2) (that is,

including the Forward Averaging Amount of

$16,990.99 under paragraph 120.1 (2)(b)) :

$30,492.12

x 1.5%

$457.38

$30,492.12

— $ 6,000.00

$24,492.12

x 5%

$1,224.61

$30,492.12

— $15,000.00

$15,492.12

x 5%

	$774.61
Surtax payable under subsection 180.1(1):	$2,456
Section 120.1, a Distinct Section Within Part I

The Appellant's representation seems to suggest in paragraph 27 of Part III of his "summation" that section 120.1 is a subsection of section 120.

I refer the Court to the arguments made above to the effect that Part 1.1 is not a subpart of Part I but a distinct part. To this, I ask that Parliament was clear when it enacted section 120.1 for the 1982 and subsequent taxation years (see Tab K):

80.(1) The said Act is further amended by adding thereto, immediately after section 120 thereof, the following section: “120.1 (. . .)"

Section 120.1 is not a subsection of section 120, but a distinct section of the Act.

The Appellant's representative submits also in paragraph 27 of Part III of his "summation" that the words "the aggregate of the taxes" in subparagraph 120.1(2)(b)(i) mean the tax under Part I and the surtax under Part 1.1. Again, I refer the Court to the text itself of that subparagraph, as applicable for the Appellant's 1986 taxation year, where there is no reference at all to Part 1.1 but only to "this Part", this Part being necessarily Part I in which section 120.1 is (see Tab L). I add that the words "the aggregate of the taxes" were necessary because the law provides for an aggregate of taxes under Part I to be done for three taxation years in the computation of the forward averaging amount:

(i) the aggregate of the taxes that would have been payable by him under this Part for the three immediately preceding taxation years if (. . .)

The Dewey System, Not a Rule of Construction

We will now answer briefly the other arguments raised by the Appellant's representative.

First, in paragraph 6 of Part III of his “summation”, he refers to subsection 3(3) of the Interpretation Act that says: “Nothing in this Act excludes the application to any enactment of a rule of construction applicable thereto and not inconsistent with this Act". He concludes from this text that the Dewey Decimal Classification System applies as a rule of construction. We submit that this is a misunderstanding of the sources of interpretation of statutes. There are two sources of interpretation of federal statutes: the legislation (that is, the Interpretation Act and the Income Tax Act itself in our case) and the case law (see P.A. Côté, Interpretation des Lois, at 14 to 19, Tab M). Where subsection 3(3) of the Interpretation Act refers to other rules of construction, it refers consequently to common law rules of construction. As far as I know, the Dewey Decimal Classification and Relative Index System has never been recognized by the Courts as a rule of construction of statutes!

Second, in paragraph 22 of Part III of the “Summation” of the Appellant's representative, there is a reference to “generally accepted accounting principles" (GAAP). It may be recalled that GAAP was retained by the case law because the Income Tax Act does not give a definition of “profit” in section 9. We submit that the question in issue has nothing to do with the notion of profit, and that no analogy can be drawn between GAAP and the Dewey Decimal Classification System!

The question in issue deals with the computation of the individual surtax according to Part 1.1 of the Act as it read for 1986. The rule of interpretation of that part was put succinctly by E.A. Driedger in Construction of Statutes (2nd ed. 1983) at 87 and was retained by the Supreme Court of Canada in Stubart Investment Ltd v. M.N.R., supra, at 578 (see Tab Mc):

Today, there is only one principle or approach, namely, the words of an Act are to be read in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

Parliament enacted Part 1.1 and enacted it clearly as a separate part of the Act. And subsection 180.1(1), within Part 1.1, is a clear provision that provides for an individual surtax to be paid on the tax payable under Part I. When looking at subsection 180.1(2) of the Act, the tax payable under Part I is defined as being that tax but without taking into account certain provisions. One notes that paragraph 120.1(2)(b) is not one of the excluded provisions. Consequently, the tax payable under Part I, for the purposes of subsection 180.1(1), includes the forward averaging amount to be added under paragraph 120.1(2)(b).

Forms are not the Law

In paragraph 29 of Part III of his “summation” the Appellant's representative argues that there was no provision in the forms issued by Revenue Canada for charging a surtax on the accumulated averaging amounts. We only admit that the forms were silent with respect to the forward averaging amount in the computation of the surtax of deceased persons, and we add in this regard that it was recommended to remit the interest charged to the Appellant. But with respect to the computation of the surtax itself, forms are not the law.

I refer the Court to the case law on that question.

In Ball v. M.N.R. (1958), 20 Tax A.B.C. 444; 58 D.T.C. 703 (see tab N), the Appellant, an accountant, claimed a child tax credit and computed the credit by following the instructions given on the guide attached to the income tax return. It appeared that those instructions were not strictly in accordance with the relevant provisions of the Act.

Mr. Justice Fisher of the Tax Appeal Board indicated (at 705-706) that the Board:

has no alternative but to apply the provisions of the Act (. . .) It has long been settled law that the Crown is not responsible for any laches of its servants, and if the Appellant was misled by any instructions issued by the Respondent's officials which were not in exact conformity with the provisions of the legislation as enacted by Parliament, there is another rule of law that all persons are presumed to know the law and to be bound by it, and accordingly cannot claim relief on account of some misinterpretation of the law which may have been given by servants of the Crown.

In Stickel v. M.N.R., [1972] F.C. 672 [[1972] C.T.C. 210; 72 D.T.C. 6178] (tab O), Mr. Justice Cattanach of the Federal Court of Canada, relying particularly on the Supreme Court decision M.N.R. v. Inland Industries Ltd., [[1972] C.T.C. 27; 72 D.T.C. 6013] (Tab P),, points out also that “the Minister is not precluded from relying on Article VIIIA (of the Canada-U.S. Treaty in issue) to the exclusion of the information bulletin” (at 685). More precisely (at 684):

(. . .) Information Bulletin 41 is precisely what it is stated to be, and that is an information bulletin issued by the Deputy Minister of the Department of National Revenue. The Deputy Minister does not have the power to legislate on this subject-matter delegated to him. In reality, this information bulletin is nothing more than the Department's interpretation of Article VI HA of the Treaty for departmental purposes (. . .) Information Bulletin 41 is not a statute.

In M.N.R. v. Inland Industries Ltd., 72 D.T.C. 6013 (Tab P), Mr. Justice Pigeon, in delivering the unanimous judgment of the Supreme Court of Canada, indicated [at 31 (D.T.C. 6017)] :

it seems clear to me that the Minister cannot be bound by an approval given when the conditions prescribed by the law were not met.

In Gauvreau, Beaudry Limitée v. M.N.R., [11981] C.T.C. 2475] 81 D.T.C. 392, (Tab Q), the Tax Review Board had to decide whether the profit made by the Appellant company was a capital gain or business income. Mr. Justice Tremblay said at [248 (D.T.C. 2397)]:

The Board clearly cannot base itself on either the interpretation bulletin or the letter from the Minister of National Revenue, because they conflict with the ordinary principles established by precedent, and consequently, with the underlying principles of the Income Tax Act.

In J. Camille Harel v. D.M.R. Quebec, [[1977] C.T.C. 441] 77 D.T.C. 5438, the Supreme Court sanctioned the application of an administrative policy, but as the Court emphasized, the case was one where the said administrative policy did not conflict with the Act and where the Act itself is ambiguous.

In our case, we have seen that section 180.1 of the Income Tax Act is clear: the individual surtax is payable on the tax payable under Part I including paragraph 120.1(2)(b). The law, which is explicit, must prevail over the silence of the forms and neither the Minister nor the Court can go beyond what Parliament has clearly enacted.

In Thomas E. Merriman and Berkeley Square v. M.N.R., [[1986] 1 C.T.C. 2051] 86 D.T.C. 1056, (Tab R), the Appellants relied on an Interpretation Bulletin and an Advance Ruling. However, Mr. Justice Christie of the Tax Court of Canada refused to consider those documents (at 1058) and quoted in this respect Wo lien berg v. M.N.R., [[1984] C.T.C. 2043] 84 D.T.C. 1055, at [2045 (D.T.C. 1058)]:

What Parliament has decreed shall be the rules applicable in determining what is payable by way of tax under the provisions of the Act is paramount and cannot be repealed or amended in any manner by whatever Revenue Canada may choose to publish by way of tax guides, Interpretation Bulletins or otherwise (. . .).

Consequently, section 180.1 of the Income Tax Act, has to be applied as enacted and the surtax payable by the Appellant for the 1986 taxation year has to be computed on the tax payable under Part I for that year including paragraph 120.1(2)(b).

Wherefore, we respectfully pray this Court:

- to maintain our objection to the admissibility of that part of the testimony, the report and the letter of the witness Mr. Sol Katz that dealswith the interpretation of the law; and

- to dismiss the Appellant’s appeal for the 1986 taxation year.

3.03 Appellant's reply

The Factum presented by the Respondent in the case at bar attempts to misrepresent the issues raised by the Appellant in its Summation to this honourable Court and fails to clearly address the salient points, relying rather upon extraneous matters to cloud the Appellant's conclusions.

The Respondent, in Part I, objects to the opinion evidence on the Dewey Decimal Classification and Relative Index System given by Mr. Sol Katz, Appellant's expert witness, relating to the construction of the Income Tax Act. In addition, the Respondent alleges that other evidence submitted by Mr. Katz is inadmissible because Mr. Katz, a cataloguing librarian, never drafted a legislative document.

In connection therewith, the Respondent never introduced an Expert Witness to corroborate and support the Respondent's allegations and as such the Respondent's objections lack judicial substance.

The relevent point to rebut the Respondent's arguments is that the Court, in its own right, can take Judicial Notice of the Statutes of Canada and Quebec without these statutes being introduced as evidence in this case and it will become abundantly clear from an examination of the particular legislation referred to, that a decimal classification system is used.

The Court is directed to Index G of the Respondent's Factum for the Respondent's opinion relating to the construction of a Federal statute and the enactment of Part 1.1 of the Income Tax Act. The Income Tax Act was amended by adding after section 180, Part 1.1, which begins with section 180.1. No reasons were provided by the Respondent as to why the Minister of Finance decided to amend the Income Tax Act by inserting Part 1.1 where he did.

The Respondent alleges that there is no formal procedure to be used when a decimal classification system is employed, i.e., the use of a decimal after a number. The Appellant denies this outright.

The attention of the Court is drawn to the fact that the Part which has been inserted has been numbered as Part 1.1. The rédacteurs of the Income Tax Act saw fit to utilize a decimal classification system not only to number the Parts but also to number the sections, i.e., section 180.1. This action is the Appellant's prime argument, namely that this methodology is the exemplification, realization and, above all, the concretization of the Dewey Decimal Classification and Relative Index System as devised by Melvil Dewey in 1876 and used in over 130 countries of the world.

The Court is referred to paragraphs 19 and 20 of the Appellant’s summation for the Appellant's substantive evidence to support the Appellant's argument that Part 1.1 of the Income Tax Act is a subpart of Part I because it is not mutually exclusive with Part I because of the Principle of Notational Hierarchy therein referred to.

The Court is directed to the Respondent's Index D, Les Principes de l'imposition du Revenu au Canada, Quatrième edition, Guy Lord et Jacques Sasseville, Les editions Themis, wherein the authors state in paragraph 2.1.2:

Parties 1.1 à XIV

Chacune de ces Parties porte un titre spécifique qui identifie l'impôt qu'on tentend prélever. Chaque Partie traite d'une situation particulière de nature technique et lève un impôt special Chaque Partie est complète en elle-même et répond donc, en théorie, aux quatre exigences de toute mesure fiscale.

Throughout these proceedings, the Appellant has never alleged that Part 1.1 of the Income Tax Act is not a complete Part. The word complete (or complète in French) means full and entire and has not relevance whatsoever attributable to hierarchical structure as the Respondent would suggest to this Court. Thus the Respondent's allegations and merely the Respondent's opinion when the Respondent states,

When Parliament amends a statute, it does not renumber the existing provisions, in order to avoid risk of error and confusion in the references; it inserts new provisions and, if necessary, adds a lettered section or a decimal number.

The reference cited by the Respondent (under Part II, The Law), i.e., Index E, pages 20-21 of Drafting and Interpreting Legislation by Louis-Philippe Pigeon (Third Edition, 1986) makes no mention whatsoever of adding a decimal number when legislation is to be amended. The author states “use letters; never give that section or those sections new numbers".

Under Index F of the Respondent's Factum, Dr. Elmer A. Driedger, Q.C., B.A., L.L.B., L.L.D., in "The Composition of Legislation —Legislative Forms and Precedents" refers to an amending formula recommended for statutes and regulations. The examples given by Dr. Driedger pertain specifically to sections of an Act; they do not refer to Parts of an Act. See page 79, under Index F, where Dr. Driedger states:

It is frequently desirable to insert headings and sub-headings as a guide to the subject-matter of the Act. These are regarded as part of the Act, and influence the interpretation of the sections under the headings. Headings should therefore be selected with care.

On page 167, under Index F of the Respondent's Factum, Dr. Driedger never gave as a reference for a Part of an Act a Roman numeral followed by a decimal and an Arabic number. He chose only a Roman numeral itself. This supports the Appellant's position found under Annex 6 of the Appellant's Summation i.e., “Topics with the same number of digits are coordinate and mutually exclusive".

In addition, both Dr. Driedger and Louis-Philippe Pigeon observe that Parts and sections of an Act are not one and the same and must be numbered with great care to avoid creating a false impression or to avoid being misleading.

The opinion of the Respondent found on page 5 of the Respondent's factum thus lacks judicial substance since the Respondent has not introduced any direct evidence which specifically relates to interpreting subparts or subheadings. The Respondent has only introduced as evidence authoritative examples pertaining to the amendment of sections of an Act and not to the amendment of Parts of an Act, since to do so would be to confirm the Appellant's position as enunciated by Dr. Driedger on Page 79, Index F, when he wrote "may influence the interpretation of the sections under the headings”.

The Appellant has shown to this Court and the Respondent cannot deny that in the Income Tax Act and other Federal and Provincial Legislative Acts, the rédacteurs of these Acts have seen fit to embody a decimal classification system. Is this Court being led to believe by the Respondent that there are no underlying principles upon which the usage of the decimal classification system is based? The Appellant submits the opposite point of view. Since 1876, there is the Dewey Decimal Classification and Relative Index System. Annex 15, contained in the Appellant's summation, relates to the Dewey Decimal Classification System as it relates to Law.

To support the Respondent's conclusions is to deny any reference to decimal classification system. The Income Tax Act undeniably makes use of a decimal classification system. Other legislative acts also make use of a decimal classification system. Section 3 of the Interpretation Act does not exclude an enactment of a rule of construction applicable thereto and not inconsistent with this Act. The fact that there has been no reference to the Dewey Decimal Classification System by our Legislators is consistent in the sense that no reference is ever given by our Legislators to how any legal statute is constructed.

The mere fact that the rédacteurs chose to use a decimal classification system is enough for the Court to realize that the usage was based upon the principles of the Dewey Decimal Classification and Relative Index System as devised by Melvil Dewey and since the Appellant and Respondent both rely on Dr. Elmer A. Driedger as the unquestioned authority on the construction of Federal statutes, the Respondent has been unable to rebut paragraph 21 of the Appellant's summation (Refer to paragraph 18 of Appellant's summation).

Thus, what we have is something being used on many occasions, i.e., a decimal classification system. The Appellant argues that the decimal classification system follows the rules of the Dewey system. The Respondent cannot deny that a decimal classification system is used in the Income Tax Act but the Respondent will not admit to this Court that the decimal classification system used in the Income Tax Act embodies the principles of the Dewey Decimal Classification and Relative Index System. Is it not reasonable, then, for this Court to reach a conclusion that since a decimal classification system is used that the interpretation of a statute in which a decimal classification system is used should be based upon the principles enunciated by those who devised the system, in this case Melvin Dewey?

The Respondent has never introduced any references whatsoever to any other decimal classification system which would support a conclusion that Part 1.1 was a separate part of the Income Tax Act and not a subpart of Part I as the Appellant alleges. Throughout the proceedings, the Respondent has acted as if the use of a decimal classification system has no significance relating to the interpretation of the statute itself. The Appellant alleges that the Respondent has acted in this manner because any reference by the Respondent to a decimal classification system based upon general underlying principles would have supported and reinforced Appellant's position and destroyed all of the Respondent's arguments.

The Court is now asked to take judicial notice of section 180.1(4) of the 1986 Income Tax Act which is contained under Part 1.1 and which reads as follows:

Provisions applicable to part. Sections 152, 153, 155, 156, 156.1 and 158 to 167 and Division J) of Part I are applicable to this Part with such modifications as the circumstances requires.

The Court is now directed to section 152(1) of the Income Tax Act which reads as follows:

The Minister shall, with all due dispatch, examine a taxpayer's return of income for a taxation year, assess the tax for the year, the interest and penalties, if any, payable and determine

(a) the amount of refund, if any, to which he may be entitled by virtue of sections 129, 131, 132 or 133 for the year, or

the amount of tax, if any, deemed by subsection 119(2), 120(2),120.1 (4), 122.2(1), 127.1(1), 127.2(2), 144(9) or 164(6) to have been paid on account of his tax under this Part for the year.

An examination of section 152(1) will reveal that a specific reference is made in this section to section 120.1(4) of the Income Tax Act. The Court is directed to take specific note that the legislators saw fit to make no reference in this section of the Income Tax Act to section 120.1(2). It follows logically that since under section 180.1(4) of the Income Tax Act that all those sections cited under section 152 are applicable to Part 1.1 and the contrarian argument of the Appellant to this Court is for the Court to take Judicial Notice that the legislators saw fit under section 152(1) to not include section 120.1(2) therein and thus not make it applicable to part 1.1 by virtue of section 180.1(4). This is the essence of the Appellant's argument, namely that the 3 per cent surtax levied in Part 1.1 of the Income Tax Act has no applicability to section 120.1(2) of the Income Tax Act.

The Respondent states on Page 8 of Respondent's factum:

In the provisions to be excluded by virtue of paragraph 180.1(2)(b), it should be noted that there is no reference to section 120.1. This means that the individual surtax is a percentage of the tax payable under Part I including section 120.1. There is no ambiguity at all in the Act in this regard.

The Respondent's conclusions make no reference to paragraph 180.1(4) of the Income Tax Act which is applicable, mutatis mutandis, to Part 1.1. Thus, the Respondent's arguments fail to support the Respondent's conclusion.

The Appellant acknowledges that an error in the printing of an income tax form does not give judicial effect to a statute found in the Income Tax Act. In this connection, the Appellant alleges that for each of the years 1985 and 1986 Forms T540-E and T541-E as issued by Revenue Canada, Taxation were correctly printed and embodied the provisions contained in the Income Tax Act, i.e., the exemplification, realization and concretization of those provisions without any exceptions whatsoever.

The Appellant denies the Respondents conclusion reached on Page 10 of the Respondent's Factum because the word “aggregate” contained under subparagraph 120.1(2)(b)(i) limits the total tax to that tax referred to in the section under Part I. The Legislators could have written this section as "the taxes that would have been payable” but instead chose to insert the words "aggregate of the taxes that would have been payable”. The Respondent's argument is thus rebutted because the word "taxes" is used (refers to three years) and it would not have been necessary to insert the word "aggregate" if the Legislators did not mean to exclude that tax under paragraph 120.1(2)(b) from the imposition of the 3 per cent surtax.

For all of the above reasons thus submitted, the Appellant's Appeal is truly well founded in fact and in law (de facto et de jure).

Wherefore the Appellant prays to this Honourable Court:

— to vacate the 1986 Notice of Assessment dated 25th May 1987;

— to allow this Appeal with costs in favour of the taxpayer so that no surtax is applicable on the accumulated averaging amount;

— to make any further or other orders as it deems just and equitable in the circumstances.

4. Analysis

4.01 The appellant's prime argument concerning the Dewey Decimal Classification and Relative Index System explained in paragraphs 3.03(7)(8) which is based on paragraphs 3.01(19)(20) did not convince the Court that Part 1.1 is part of Part I.

The evidence given by Mr. Sol Katz concerning the application of the Dewey convinced the Court that the said system is very good for the classification of books and other documents, including law material.

However, there is nothing in his testimony showing how a statute can be structured according to the Dewey system. How is it possible to structure with such system a statute as the Income Tax Act which is amended every year?

4.02 In my view, the Legislator in classifying sections 180.1 and 180.2 in Part 1.1 followed the tenth rule of the late Mr. Justice Louis-Philippe Pigeon: Drafting and Interpreting Legislation, pages 20-21:

Amending statutes

Tenth rule (a close relative of the foregoing one): When a section or sections are added by amendment, never give that section or those sections new numbers; use letters. In Quebec, figures are added, but the principle remains the same. Renumbering carries with it an extremely serious risk of error: once the numbers have been changed, no one will know whether an ensuing reference is to the old number or the new one. There is always a risk that the amendment will be ignored, and the old section referred to. For this reason, even in paragraphs identified (a), (b), (c), and (d), renumbering is not done. Rather, if a paragraph is to be inserted between, say, paragraph (a) and paragraph (b) , that new paragraph is designated (aa), to avoid risk of error in the references.

When the statutes are revised, sections are, of course, renumbered. But atthe same time, extra care is taken to make sure all references have been checked and corrected. This precaution cannot be taken in the annual statutes; the work would be too considerable.

When it comes time to check references in the revised statutes, a special staff is hired to do just that. Each reference is checked twice, methodically and independently. This is the only way to avoid errors, and it cannot be done for the annual Statutes.

The Revised Statutes of Canada 1975 and 1985 do not even include the Income Tax Act enacted January 1, 1972. In substance, the Income Tax Act is rewritten only every 20 to 25 years.

4.03 It is appropriate to quote the following text of Elmer A. Driedger, The Composition of Legislation—Legislative Forms and Precedents at 79-80.

An Act may also be divided into Parts, either with or without an appropriate heading. It may be done to break up the Act by subject, as in the case of a book, for the purpose of assisting the reader in finding his way through it. Or it may be done for more technical reasons. For example, sometimes special definitions are necessary for a particular subject-matter and it is more convenient to set them out with the sections to which they apply than at the beginning or end of the statute. Again, division of an Act into Parts may facilitate cross-references; for example, an Act may impose two kinds of taxes and it may be convenient in the general sections to distinguish between taxes under Part I and those under Part II. An Act may be divided into different Parts applying to different classes of persons; thus, an Act relating to companies might have one Part applying only to railway companies, another applying only to telegraph companies, and so on; in each Part the word company can be used without having to specify each time the kind of company; alternatively, each Part could have its own definition of company.

There is no general rule for determining when an Act should or should not be divided into Parts, It has been said that an Act should be divided into Parts only where each Part might properly form the subject of another Act. That might be one instance where the division might usefully be made, but there are other instances where an Act can, and should, be so divided.

The Legislator in writing an Income Tax Act has to consider so many aspects, it is appropriate for clarity that each one be a separate part.

It is interesting to state that the 1990 technical amendments of the Act provide

Part 1.2 Tax on family allowances and old age security benefits.

Part 1.3 Tax on large corporation.

They are not parts of Part I even if they refer to provisions of Part I.

Moreover, in the Act there are also Part X, X.1, X.2, XI, XI.1, XI.2, XI.3, XII, Xll.1, XII.2, XII.3. They are all separate parts. I am sure, when the Act shall be rewritten, each of these parts shall be renumbered.

4.04 Generally speaking, the Court agrees with the argumentation submitted by counsel for the respondent.

The assessment issued by the respondent must be maintained.

5. Conclusion

For these reasons, the appeal is dismissed.

Appeal dismissed.