Section 223

Certificates filed by the Crown in the Federal Court pursuant to s. 223(3) of the Act had the effect of renewing the limitation period with respect to amounts reflected therein that were statute barred as of the date of registration of the certificate.

"[T]he liability to pay tax under the Income Tax Act arises before any assessment has been made" and "under the Act, the Minister is entitled to assess at any time and is not bound to wait for the end of a fiscal year."

It is inaccurate to recite a style of cause between Her Majesty the Queen, as plaintiff, and named persons as defendants, in an application for an order for attachment of debts. S.223 does not contemplate that an action has been launched.

Shortly after the filing of a certificate by the Minister, the applicant, who alleged that he was not a resident of Canada for the taxation years in question and thereby not subject to Canadian tax, filed notice of objection. A stay of execution pursuant to Rule 1909 was granted to the applicant with reference to his real property provided that the applicant furnished within 20 days of the order appropriate guarantees to ensure that the value of the real property was protected against the events of fire, foreclosure or sale by a municipality for unpaid municipal taxes.

An application by the Crown to have an equitable receiver appointed was granted, after having regard to "the byzantine complexity of the respondents' affairs [which] constitutes a more than substantial impediment in the way of ordinary modes of recovery and ... the large amount owing and the likelihood that a Receiver will be able to realize upon very considerable assets that would otherwise remain sheltered [from the fisc]".

The only instance where a stay of execution of judgment obtained on the filing of a s. 223 certificate "will be granted is where seizure has been made of property real or personal of the taxpayer, who has, or does within the specified time, objected to the assessment, or taken a proper appeal therefrom, and such sale, prior to final determination of the actual liability, may be prejudicial to the taxpayer".

"The fact that a taxpayer can still make an objection to an assessment in no way affects the obligation which the taxpayer has to pay the tax assessed on him, or the right of the Minister of National Revenue to take such measures of execution as he shall deem appropriate or, finally, the right of the Minister to obtain payment of taxes in the amount determined by him."

It was suggested that a certificate filed under the equivalent Excise Tax Act provision cannot be amended or varied.

Upon the production of a Minister's certificate that is proper on its face such certificate must be accepted for registration. Here, however, the certificate was not proper on its face for various reasons, and Cattanach, J. accordingly declined to direct its registration in its present form.

The Federal Court does not have the jurisdiction to amend a certificate because "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 Minister 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."

The registration of requirements under s. 223 in respect of a previously assessed liability of the taxpayer was not voided by reassessments (which were argued to have displaced the previous assessments). Jackett, C.J. stated that "there is a difference betweeen (a) a liability under the Act to pay tax, and (b) an 'assessment' (including a reassessment or a further assessment), which is a determination or calculation of the tax liability. It follows that a reassessment of tax does not nullify the liability to pay the tax covered by the previous assessment as long as that tax is included in the amount reassessed."

"The certificate, when registered, has the same force and effect as if it were a judgment and unless and until the amount claimed is reduced or wiped out altogether by decisions of the Minister following the taxpayer's objection or by appeal to the Tax Review Board or the Federal Court, there is a presumption that it is due".

In finding that the taxpayer's tax debt had been properly certified, Mosley J. found that the Minister had mailed the notice of assessment but went on to note, in the alternative, that a notice of assessment was not actually required. While there was a line of cases imposing such a mailing requirement, those cases pertained to personal income taxes, not to payroll source deductions.

Section 32 of the Crown Liability and Proceedings Act applied to prohibit the taking of collection action against the taxpayer six years after a cause of action against him arose, namely, the expiry of the 90-day period after the mailing of a notice of assessment to him. There was no authority to support the proposition that the Income Tax Act was complete code that could not be informed by laws of general application such as s. 32, the ordinary meaning of the phrase "proceedings ... in respect of a cause of action" encompassed statutory collection procedures, and respecting arguments that the French word "poursuite" referred only to court proceedings, there was no reason to infer that Parliament intended for the application of section 32 to turn solely upon the technicality of whether the relevant proceedings took place in court.

The Minister was permitted to issue a requirement more than six years (the applicable limitation period) after taxes payable by the taxpayer first became collectible given that a Certificate had been filed under s. 223 within the six-year period.