Doris Merrill Nelson v. The Attorney General of Canada, [1996] 3 CTC 342

John A. Hargrave Prothonotary: —

Background

In these three proceedings the Department of National Revenue certified as owing by Mrs. Nelson, under the Income Tax Act (the “Act”), some $160,000. The tax certificates were dated the 1st of August, 1996, the day they were registered with this Court. That same day the Court, in turn, issued certificates under Section 223(3) of the Act.

On 1 August, 1996, Madame Justice Gill, of the B.C. Supreme Court, issued two Orders in actions A-962561 and A-962562, on the ex- parte applications of the Crown, pursuant to section 225.2(2) of the Act, being authorizations to proceed with collection immediately, on the basis that any delay would jeopardize collection.

Mrs. Nelson’s application, spoken to by her husband, in each of the

Federal Court proceedings, is identical:

The Petitioners hereby apply to this Court for an Order pursuant to FAIRNESS and JUSTICE TO DISCHARGE/VACATE 3 JUDGMENTS: ITA-5224- 96, ITA-6225-96, ITA-6226-96.

In contrast the motions which Mr. Nelson came to argue were very different. He asked the Federal Court to set aside the B.C. Supreme Court Orders of Madame Justice Gill. Mr. Nelson seemed to have in mind section 225.2(8) of the Act:

(8) Review of authorization - Where a judge of a court has granted an authorization under this section in respect of a taxpayer, the taxpayer may, on 6 clear days notice to the Deputy Attorney General of Canada, apply to a judge of the court to review the authorization.

Preliminary Objection

There was, however, a preliminary matter. Mr. Nelson submitted I had prejudged his wife’s applications and was biased both against him and his family.

I gather the conclusion of bias, in the present instance, is based on an oral direction which I gave to one of our Registry Officers so she might deal with a telephone inquiry from Mr. Nelson as to an application to the Federal Court to set aside the B.C. Supreme Court orders of Madame Justice Gill by invoking a section 225.2(8) of the Act. My oral response to the Registry Officer, which I understand was relayed to Mr. Nelson, was to the effect that the orders having been obtained by the Minister of National Revenue from a B.C. Supreme Court Judge, a judge as defined is section 225.2(1) of the Act, the Federal Court had no jurisdiction to set aside such an order and that Mr. Nelson ought to make his application in the B.C. Supreme Court.

This inquiry process, an informal means of obtaining answers to questions as to procedure, is perhaps analogous to that under Federal Court Rule 1605, which allows the Registry to take in a judicial review application, which does not comply on its face with the requirements of the Federal Court Rules and place it before a judge or prothonotary in order to obtain a direction as to whether the document requires correcting and if it does the means for making it procedurally correct as quickly and as inexpensively as possible. This procedure, of obtaining informal answers to procedural questions raised by litigants and counsel, is designed to save everyone time and expense. Such a procedural suggestion is not a prejudgment in any sense. It is nothing which would give rise to an apprehension of bias in a reasonable and well informed person.

Consideration of the Motions

Turning to the substance of the three motions, I will first deal with the motions as set out in the Notices of Motion and then with the motions which Mr. Nelson came to argue.

The Motions as Filed

The three motions set down by Mrs. Nelson seek to discharge or vacate what she refers to as the three “judgments” in the present three income tax proceedings.

To begin, it is not a matter of setting aside judgments, but rather setting aside the certificates filed by the Minister of National Revenue in the Registry of the Court on the 1st of August, 1996. The Federal Court lacks the jurisdiction to given this relief to Mrs. Nelson. The Federal Court of Appeal made this clear in Québec (Sous-ministre du Revenu) v. Marcel Grand Cirque Inc. (sub nom. Marcel Grand Cirque Inc. v. Québec (Sous- ministre du Revenu)), 107 F.T.R. 18. In that case the Deputy Minister of Revenue of Quebec filed a certificate against Marcel in the Federal Court Registry in accordance with the Excise Tax Act, pursuant to a notice of assessment. Mr. Justice Denault pointed out the Court had no jurisdiction to give this relief:

It is self-evident that a party can make a motion in revocation only in opposition to a judgment. In the instant case, no judge or prothonotary of this court has rendered any judgment the revocation of which may be requested. The recovery process set out in section 316 of the Excise Tax Act is similar to the process set out in section 223 of the Income Tax Act, which has been the subject of earlier constitutional challenges and analyzed frequently by the courts. From the procedural standpoint in particular, section 223 of the Income Tax Act was exhaustively examined by this court in Minister of National Revenue v. Bolduc, [1961] Ex.C.R. 115, and in the R. v. Star Treck Holdings Ltd., [1978] 1 F.C. 61. In the latter judgment, Cattanach, J., succinctly summarizing the thoughts of Thurlow, J. (as he then was), in Bolduc, supra wrote:

Succinctly put he said that a certificate is not a judgment nor does it become a judgment of the court when registered but it remains merely a certificate of the Ministered even though such a certificate 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 court.

Mr. Justice Denault makes it clear that while the Marcel case involved the Excise Tax Act, the same principles apply to an assessment certified under the Income Tax Act. He goes on to point out, at page 23 that:

[6] This court does not have jurisdiction to determine this issue. The Excise Tax Act, like the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 2, contains in effect a complete code for the collection of taxes pursuant to which a taxpayer, after receiving a notice of assessment, may file a notice of opposition and possibly appeal to the Tax Court of Canada. Thus this court does not have jurisdiction to determine the amount of the assessment and the expenses to which a taxpayer may claim to be entitled, (page 21)

He concluded “... inasmuch as the certificate produced to the Federal Court is equivalent to but not a judgment of this Court, the motion for revocation of judgment is not receivable.” (page 24). This line of reasoning deals with the motions as brought by Mrs. Nelson. I now turn to the motions as argued by Mr. Nelson on behalf of Mrs. Nelson.

The Motions as Argued

While the motions filed on behalf of Mrs. Nelson make no reference to reviewing the B.C. Supreme Court’s authorization, under section 225.2(2) of the Act, allowing the Minister of National Revenue to proceed with collection forthwith, Mr. Nelson wished to argue the case as though it were a review, under section 225.2(8) of the authorization.

The difficulty with this approach is that the proceeding authorizing the Crown to proceed immediately with collection was a proceeding taken in the B.C. Supreme Court. It is not for this Court to interfere in a matter which is properly before another Court and which clearly ought to be dealt with by that Court.

Mr. Nelson objected to his wife’s motion being heard before a prothonotary by reason of the requirement that a review of an order under section 225.2(2) of the Tax Act must be before a judge. The fallacy with this argument is that Mrs. Nelson can not, in this Court, have review of an order or decision made by some other Court and thus the issue of review under section 225.2(8) does not arise.

Conclusion

Mrs. Nelson’s motions are dismissed. As to costs, considering all of the factors, the circumstances are such that it is appropriate for the Crown to have its taxable costs of these motions in any event. The Crown urged that costs be payable forthwith. However I do not think this is required, for there may well be further matters to be dealt with in these three proceedings.

Motions dismissed.