A-1031-82
E. H. Price Limited (Appellant) (Plaintiff)
v.
The Queen (Respondent) (Defendant)
Court of Appeal, Pratte, Urie JJ. and Clement
D.J.—Winnipeg, April 13 and 14; Ottawa, May
31, 1983.
Customs and excise — Whether action for collection of
taxes and penalties under the Excise Tax Act subject to
limitation period — Certificate issued under s. 52(4) of Act
and filed in Federal Court not `proceeding in the Court"
within s. 38(1) of Federal Court Act — S. 52(1) expressly
excluding limitation period — Appeal dismissed — Excise
Tax Act, R.S.C. 1970, c. E-13, ss. 12, 52(1) (rep. and sub. S,C.
1980-81-82-83, c. 68, s. 21), (4) (idem, s. 46) — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 38(1),(2) — Interpreta
tion Act, R.S.C. 1970, c. I-23, s. 16 — The Special War
Revenue Act, 1915, S.C. 1915, c. 8, s. 20(1) — Federal Court
Rules, C.R.C., c. 663, R. 474(1)(a).
A certificate was issued under subsection 52(4) of the Excise
Tax Act in January 1980 requiring the appellant to pay taxes
and penalties on transactions going back to February 1972. The
appellant argues that the six-year limit provided for in The
Limitation of Actions Act of Manitoba applies and that some
amounts should not be included. The Trial Judge found, on a
motion for determination of questions of law, that in this case,
there was no limitation period applicable to an action for the
collection of taxes. This is an appeal from that decision.
Held, the appeal should be dismissed. Subsection 38(1) of
the Federal Court Act does not permit the application of The
Limitation of Actions Act of Manitoba because the certificate
is not a proceeding in court within the meaning of that subsec
tion. Furthermore, the recovery of taxes and penalties under the
Excise Tax Act is excluded from the operation of subsection
38(1) because the words "at any time" in the opening phrase
"recoverable at any time after the same ought to have been
accounted for and paid" in subsection 52(1) of the Excise Tax
Act expressly provide against any limitation of time in a suit for
excise tax, and so come within the exclusion from operation
with which subsection 38(1) opens.
CASES JUDICIALLY CONSIDERED
APPLIED:
Royce v. Municipality of Macdonald (1909), 12 W.L.R.
347 (Man. C.A.); Her Majesty The Queen v. T. H.
Parker (1981), 2 C.E.R. 181 (F.C.T.D.); Twinriver
Timber Ltd. v. R. in Right of British Columbia (1981),
25 B.C.L.R. 175 (C.A.), affirming (1980), 15 B.C.L.R.
38 (S.C.); Attorney-General v. Brown, [1920] 1 K.B. 773
(K.B.D.); Canadian Northern Railway Co. et al. v. The
King et al. (1922), 64 Can. S.C.R. 264; Grey v. Pearson
(1857), 6 H.L. Cas. 61; [1843-60] All E.R. 21; 10 E.R.
1216.
DISTINGUISHED:
Heydon's Case (1584), 76 E.R. 637; 3 Co. Rep. 18
(K.B.D.).
COUNSEL:
J. Barry Hughes, Q.C. for appellant (plain-
tiff).
Harry Glinter for respondent (defendant).
SOLICITORS:
Inkster, Walker, Westbury, Irish, Rusen &
Hughes, Winnipeg, for appellant (plaintiff).
Deputy Attorney General of Canada for
respondent (defendant).
The following are the reasons for judgment
rendered in English by
CLEMENT D.J.: In this action the appellant
Company claims that a certificate, given by the
Deputy Minister of National Revenue pursuant to
subsection 52(4) of the Excise Tax Act [R.S.C.
1970, c. E-13, as am. by R.S.C. 1970 (2nd Supp.),
c. 10, s. 64(2)] (herein called the Act) as to the
amount of tax and penalties payable by the Com
pany on transactions going back to February 1,
1972, is invalid to the extent that it includes
amounts that became due and owing prior to the
appropriate limitation period prescribed by The
Limitation of Actions Act [R.S.M. 1970, c. L150]
of Manitoba. The Crown by its defence denies that
any period of limitation exists for the collection of
excise tax under the Act, or if it does, on the facts
of the case the time has not yet run out on any
part of its claim. It moved under Rule 474(1) (a)
of the Federal Court Rules [C.R.C., c. 663] for
determination of questions of law:
(1) Is there a limitation period applicable to an action for
collection of taxes and penalties under the Excise Tax Act,
1970, R.S.C. Cap. E-13;
(2) If the answer to (1) above is yes, what is the limitation
period applicable; and
(3) If the answer to (1) above is yes, what was the date from
which the limitation period commenced for the taxes and
penalties claimed?
The application was heard by Smith D.J. [[1983]
2 F.C. 518 (T.D.)] on an agreed statement of
facts. He concluded [at page 530] that "during all
the period relevant to the issues in this case there
was no limitation period applicable to an action for
the collection of taxes and penalties" under the
Act. This answered the first question and abrogat
ed the remaining contingent questions. The Com
pany has appealed.
The Company carries on a manufacturing busi
ness in Winnipeg and the claim or cause of action
against it for taxes lies in Manitoba. The Depart
ment of National Revenue, Customs and Excise,
audited the business operations of the Company
and, on August 28, 1975, sent it a registered notice
claiming taxes exigible under Part V of the Act on
sales of its manufactured products, on a continuing
basis from February 1, 1972 of $63,127.21 [sic].
On January 31, 1980 the Deputy Minister issued
his certificate that
... the following amounts are now due, owing and unpaid by
the said E. H. PRICE LIMITED:
Sales tax due and accruing for the
period from February 1st, 1972 to
November 30th, 1974 $63,127.61
Penalty accrued to January 31st, 1980 $31,988.45
$95,116.06
together with additional penalty at the rate of two-thirds of one
percent per month on the said sum of $63,127.61 from Febru-
ary 1st, 1980 to date of payment, in accordance with subsection
50(4) of the Excise Tax Act.
It was addressed to the Federal Court of Canada,
Trial Division, and filed on February 7, 1980.
These two instruments were authorized as a proce
dure for the recovery of taxes by subsection 52(4)
of the Act, to which I will come shortly. The
statement of claim of the Company is dated Octo-
ber 22, 1979. At that time it asserted invalidity in
respect of the registered notice; and after the
Deputy Minister had issued his certificate the
statement of claim was amended to assert the
invalidity in respect of any amount therein certi
fied arising more than six years prior to January
31, 1980. At some unstated date the Company
made an application to the Tariff Board, but it is
common ground that the jurisdiction of the Board
does not extend to the matter in issue here. Indeed,
the application is held in abeyance pending final
determination of the question before this Court.
The agreed statement of facts records narrative
that is not essential to the adjudication of the issue
and, although it was expatiated on in argument, I
will not review it.
The point of commencement for consideration of
the relevant law is section 38 of the Federal Court
Act [R.S.C. 1970 (2nd Supp.), c. 10]:
38. (1) Except as expressly provided by any other Act, the
laws relating to prescription and the limitation of actions in
force in any province between subject and subject apply to any
proceedings in the Court in respect of any cause of action
arising in such province ....
(2) Except as expressly provided by any other Act, the laws
relating to prescription and the limitation of actions referred to
in subsection (1) apply to any proceedings brought by or
against the Crown.
It is subsection (2) that is of initial interest: there
is here involved proceedings brought both by and
against the Crown. Then the subsection, by its
reference to subsection (1), applies to such pro
ceedings the laws relating to prescription and the
limitations of actions in force—in this case in
Manitoba and for the present purposes taken to be
six years. But this derogation of historical Crown
prerogative is stated in subsection (1) to be limited
"to any proceedings in the Court" which by statu
tory definition is the Federal Court of Canada; and
it does not apply at all where express provision in
the premises is made in another Act. This exclu
sion is also made in subsection (2).
The second primal statutory component of the
problem lies in subsections 52(1) and (4) [as am.
by R.S.C. 1970 (2nd Supp.), c. 10, s. 64(2)] of the
Act:
52. (1) All taxes or sums payable under this Act shall be
recoverable at any time after the same ought to have been
accounted for and paid, and all such taxes and sums shall be
recoverable, and all rights of Her Majesty hereunder enforced,
with full costs of suit, as a debt due to or as a right enforceable
by Her Majesty, in the Federal Court of Canada or in any
other court of competent jurisdiction.
(4) Any amount payable in respect of taxes, interest and
penalties under Part II or Parts III to VI, remaining unpaid
whether in whole or in part after fifteen days from the date of
the sending by registered mail of a notice of arrears addressed
to the licensed air carrier or taxpayer, as the case may be, may
be certified by the Deputy Minister of National Revenue for
Customs and Excise and on the production to the Federal
Court of Canada or a judge thereof or such officer as the Court
or a judge thereof may direct, the certificate shall be registered
in that Court and shall, from the date of such registration, be of
the same force and effect, and all proceedings may be taken
thereon, as if the certificate were a judgment obtained in that
Court for the recovery of a debt of the amount specified in the
certificate, including penalties to date of payment as provided
for in Part II or Parts III to VI, and entered upon the date of
such registration, and all reasonable costs and charges attend
ant upon the registration of such certificate are recoverable in
like manner as if they were part of such judgment.
I am here referring to the provisions of the Act as
they stood in 1979 at the time of commencement
by the Company of this action. Subsequent
amendments to the Act in 1980-81, particularly to
section 52 [S.C. 1980-81-82-83, c. 68, ss. 21, 46],
cannot be applied here but were noted by the
learned Trial Judge in the course of considering
the interpretation to be given to the two subsec
tions. The Crown in its memorandum of fact and
law anchors its position to a progression of argu
ment to the following effect:
(1) A certificate issued under s. 52(4) of the Act and filed in
the Federal Court is not a proceeding in court in respect of a
cause of action to which s. 38(1) of the Federal Court Act
could apply.
(2) Alternatively, if it is held to be a proceeding in court to
which s. 38(1) applies, then s. 52(1) of the Act by the words
"at any time" in its opening phrase "recoverable at any time
after the same ought to have been accounted for and paid" is
excluded from the operation of s. 38(1) because those words
expressly provide against any limitation of time in a suit for
excise tax, and so come within the exclusion from operation
with which s. 38(1) of the Federal Court Act opens. It is
contended that those words are plain and must be given their
plain meaning, viz, without limitation in time.
(3) In further alternative, if the certificate is held to be a
proceeding, and so a period of limitation is applicable, the time
did not begin to run under s. 52(4) of the Act until 15 days
after the date of the registered notice I have above referred to,
that is to say, 15 days after August 28, 1975.
These propositions seem to some extent ill adapted
to furnishing an answer to the first question the
Crown is seeking to have answered, but the argu
ment at bar was wide-ranging and I will try to
reflect its scope hereunder.
It is clear that a certificate ' issued and filed
under subsection 52(4) is a proceeding for the
recovery of taxes, interest and penalties which of
itself is within the meaning of that word in subsec
tion 38(1) of the Federal Court Act. I adopt the
words of Perdue J.A. in Royce v. Municipality of
Macdonald (1909), 12 W.L.R. 347 [Man. C.A.],
at [page] 350:
The word `proceeding' has a very wide meaning, and includes
steps or measures which are not in any way connected with
actions or suits.
The contest is whether upon filing it became a
proceeding in court. This has been decided
adversely to the Company in a series of judgments
in the Trial Division of this Court, of which the
latest is Her Majesty The Queen v. T. H. Parker
(1981), 2 C.E.R. 181. At page 182 Cattanach J.
said:
That 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 (see The Minister of National Revenue v.
Bolduc, [1961] Ex.C.R. 115 at 118 and Queen v. Star Treck
Holdings Limited, [ 1978] 1 F.C. 61 (T.D.) at 64).
And later at page 183:
There is no action in this Court. There is no judgment of this
Court. There is a certificate signed on behalf of the Minister by
his deputy.
I respectfully agree, and venture only a little fur
ther elaboration. A proceeding in court contem
plates the assertion of a cause of action and an
opportunity to raise defences against it in fact and
law, which could include a plea of prescription by
statutory limitation. Subsection 52(4) of the Act
gives no such opportunity to a taxpayer to assert
defences to the bald claim of the Deputy Minister.
Upon defences being raised, a court must hear and
determine the issues and deliver judgment. Subsec
tion 52(4) is antithetic to such normal court pro
cess. When a certificate is filed it is not in any
respect in the nature of a judgment. It remains a
certificate of the Deputy Minister which serves to
invoke and take advantage of some subsequent
administrative processes adjunct to the court for
the collection of a judgment.
But the foregoing only clears away some under
brush in coming to an answer to the first question
posed in the Crown's application. The decisive
matters lie in the interpretation to be put on the
phrase "at any time" in subsection 52(1) of the
Act, and whether a proceeding under that subsec
tion is distinguishable from a proceeding under
subsection (4) for the purposes of prescription.
Counsel for the Crown very fairly, and in my view
quite rightly, observed that it would be incon
gruous, even ridiculous, to have such a distinction
drawn. This in effect is also the position of the
Company: the divergence is in the interpretation
and application of the phrase. Indeed, the first
question posed for this Court refers to an action,
but we are here dealing with a certificate. I will
turn first to the matter of comity between the two
subsections.
I have noted above that a proceeding to which
subsection (1) of section 38 of the Federal Court
Act refers, is equally a proceeding to which subsec
tion (2) refers: so that a proceeding under subsec
tion 52(4) of the Act comes within the phrase "any
proceedings" used in both subsections. But subsec
tion (1) limits the availability of the laws there
described to "any proceedings in court". No such
limitation is expressed on their availability for the
purposes of subsection (2), and I am of opinion
that this clearly discloses the legislative intent of
Parliament. Subsection (2) does not limit the
nature of the proceedings in which such laws are
made available, and specifically makes them avail
able to any proceedings brought by or against the
Crown. Subject to other considerations, such laws
are, in my view, made as fully available to a
taxpayer in respect of an amount certified by the
Deputy Minister under subsection 52(4) of the Act
as they are in proceedings in the Court. The
difference is that subsection 52(4) provides the
taxpayer with no means of asserting such laws
against the Crown: he is obliged to come to court
to pray for relief as is done here. In analogous
circumstances in Twinriver Timber Ltd. v. R. in
Right of British Columbia (1980), 15 B.C.L.R. 38
[S.C.], Taylor J. approved such a course, and his
opinion was affirmed by the British Columbia
Court of Appeal in (1981), 25 B.C.L.R. 175 at
[page] 180.
The phrase in contention, "at any time", occurs
in subsection 52(1) of the Act and must be con
strued before turning to subsection (4) in which it
does not appear. In argument the Court was urged
to view subsection 52(1) historically as an aid to
interpretation of the subsection as it stood in 1979.
It is right to take this into account in the present
circumstances for that purpose. It was, for exam
ple, taken into account in similar circumstances by
Sankey J. in Attorney-General v. Brown, [1920] 1
K.B. 773 [K.B.D.] where he said in part at page
791:
The case turns upon the construction of s. 43, and in constru
ing an Act of Parliament it is, in my view, legitimate to
consider (1.) the state of law at the time the Act of Parliament
was passed, and the changes it was passed to effect; (2.) the
sections and structure of the Act of Parliament as a whole ....
The antecedent of subsection 52(1) of the Act
for this purpose is found in subsection 20(1) of
The Special War Revenue Act, 1915 [S.C. 1915, c.
8] which is in identical terms to subsection 52(1)
of the Act save for reference to the Exchequer
Court which was the predecessor of this Court.
Throughout the years from 1915 to 1980-81 there
has been no other change in this subsection. At the
time of its enactment there was, as is noted at page
39 in Twinriver Timber Ltd. v. R. in Right of
British Columbia, supra, a "common law pre-
sumption of Crown exemption from statutory bur
dens and disabilities". More imperative is the
provision in the Interpretation Act [R.S.C. 1970,
c. I-23] which by section 16 provided then, and
still provides:
16. No enactment is binding on Her Majesty or affects Her
Majesty or Her Majesty's rights or prerogatives in any manner,
except only as therein mentioned or referred to.
From this premise the Crown urges, in effect, that
the phrase "at any time" as used in subsection
20(1) of the 1915 statute is couched in plain words
and has the plain meaning set out in its alternative
argument (2) supra. Of the authorities cited in
support of such an interpretative approach it is
sufficient to refer only to The Canadian Northern
Railway Co. et al. v. The King et al. (1922), 64
Can. S.C.R. 264 wherein at page 270 Duff J.
(later C.J.C.) adopted the familiar canon of con
struction enunciated by Lord Wensleydale in Grey
v. Pearson (1857), 6 H.L. Cas. 61; [[1843-60] All
E.R. 21; 10 E.R. 1216], at pages 104-106 [H.L.
Cas.]:
In construing wills, and, indeed, statutes and all written
instruments, the grammatical and ordinary sense of the words
is to be adhered to, unless that would lead to absurdity or some
repugnance or inconsistency with the rest of the instrument; in
which case the grammatical and ordinary sense of the words
may be modified so as to avoid that absurdity, repugnancy or
inconsistency, but no further.
Further on he says [at page 270]:
There might of course be something in the context excluding
that meaning; to attribute such meaning to the words might
give rise to some repugnancy to the declared or apparent object
of the statute and if so, then the literal meaning would give way
to an interpretation more in harmony with the ascertained
purpose of the legislature.
For the Company it is pointed out that since
prescription did not then apply to the Crown, the
phrase "at any time" should not be given a mean
ing that would be merely a vague affirmation of
the Crown's prerogative—that would be an
absurdity—but should be assigned a meaning that
would give it some reasonable function in the
operation of the 1915 statute. That statute, as does
the Act, imposed taxes on various operations and
products and in each case makes provision for
payment or collection. It is submitted that in such
context the phrase is designed to affirm the specif-
is due date designated for payment of the various
imposts, and should be so interpreted both then
and now. If this interpretation is applied to subsec
tion 52(1) of the Act, it provides no ground for the
operation of the exclusion in subsection 38(1) of
the Federal Court Act. As I have noted, the phrase
does not appear at all in subsection 52(4): but
there is imposed a time lapse on a further adminis
trative step that is not relevant to the present point
although it will require comment later.
The purpose of the 1915 statute was to raise
revenue, a purpose which the Act continues in an
expanded and more detailed way. Thus, it will be
more to the point to deal with the contention of the
Company on the basis of the Act. There are six
categories of tax specified. Part I makes special
provisions in respect of designated insurances and
has no application here. Part II imposes a tax on
air transportation payable (section 12) when the
transportation is paid for "and in any case prior to
the provision of the transportation". Part III
imposes excise on cosmetics, jewellery or radios
and other designated goods both imported and
manufactured or produced in Canada. The duty is
made payable, generally speaking, when imported
goods are taken out of bond for consumption, or
when Canadian goods are delivered to the purchas
er. Part IV levies a tax on playing cards and wine,
payable at times analogous to those stipulated
under Part III. Part IV.I [added by S.C. 1980-81-
82-83, c. 68, s. 43] imposes natural gas and gas
liquids taxes as an element of the National Energy
Programme. They are made payable also at vary
ing times, dependent upon the stage of production
or distribution. Part V exacts a consumption or
sales tax, under which the Company is taxed. In
respect of the goods it refers to that are produced
or manufactured in Canada, the tax is, broadly
speaking, payable at the time of delivery to the
purchaser, or when title passes, whichever is ear
lier; and on imported goods when they are taken
out of bond.
There follows Part VI which bears the rubric
"GENERAL", and it is in this Part that section 52
occurs. It is directed to procedures for the recovery
of taxes and other sums payable under the Act. In
the context in which the phrase "at any time" is
used in subsection (1) I am of opinion that the
contention of the Crown is right.
The subsection has two operative parts, both
general in nature. The first contains the phrase in
question:
52. (1) All taxes or sums payable under this Act shall be
recoverable at any time after the same ought to have been
accounted for and paid ....
The application of this provision is comprehensive:
the opening words embrace all amounts made
exigible by the Act, by whatever means are pro
vided for their recovery by the Crown. One of the
means for recovery is provided by subsection
52(4). Linked inseparably to this inclusive opening
are the words "shall be recoverable at any time
after the same ought to have been accounted for
and paid". Here is found a clear recognition of the
various times at which the obligations to pay the
imposts arise. In my opinion it would put too
severe a strain on the normal canons of construc
tion to say, as contended by the Company, that the
phrase "at any time" draws its meaning only as an
emphasis of the words following which deal with a
different matter, namely, the due dates for pay
ment of the imposts. Grammatically, it is an adjec
tival phrase giving dimension to the word "recover-
able". Understood in this sense, its operation
makes clear the intent of Parliament that time
shall not run against a claim of the Crown for any
excise taxes imposed by the Act. I am of opinion
that this amounts to an express provision within
the exceptions contemplated by section 38 of the
Federal Court Act.
The second operative part of the subsection
gives the Crown generally a cause of action in debt
for the recovery of all taxes and sums, in addition
to such other remedies as the Act provides. To all
such proceedings the first operative part of the
subsection has application.
In the result, I respectfully agree with the
learned Trial Judge that no statute of limitation
bars any claim for taxes involved in these
proceedings.
There are two further points which must be
disposed of, both relating to interpretation of
statutory provisions. Both counsel referred to a
wide assortment of statutes that employ the phrase
"at any time" in a variety of contexts. Construing
the phrase in the context of its use in other statutes
is merely an exercise in the production of
irrelevancies unless the project can be fairly said to
come within the canon of construction known as in
pari materia. I accept the following passage in
Craies on Statute Law, 7th Edition, page 134:
Where Acts of Parliament are in pari materia, that is to say,
are so far related as to form a system or code of legislation, the
rule as laid down by the twelve judges in Palmer's Case, (1785)
1 Leach C.C., 4th. ed., 355, is that such Acts 'are to be taken
together as forming one system, and as interpreting and enforc
ing each other.'
If such relation does not exist between the statutes,
then the passage at page 133 is applicable:
In the interpretation of statutes the courts decline to consider
other statutes proceeding on different lines and including dif
ferent provisions, or the judicial decisions thereon.
There has been no discernible effort at bar to show
that the assortment of statutes brought to the
notice of this Court are in pari materia, nor do
their disparate titles and legislative sources inspire
hope that such an effort would avail.
Then it is urged that the learned Trial Judge
was right in looking at the 1980-81 amendment to
subsection 52(1) of the Act as an aid to interpret
ing its meaning as it stood in 1979. The canon of
construction which appears to arise on this submis
sion is established authoritatively in Heydon's
Case (1584), 76 E.R. 637; [3 Co. Rep. 18
(K.B.D.)]:
... that for the sure and true (a) interpretation of all statutes in
general (be they penal (B) or beneficial, restrictive or enlarging
of the common law,) four things are to be discerned and
considered:—
(b) 1st. What was the common law before the making of the
Act.
(c) 2nd. What was the mischief and defect for which the
common law did not provide.
3rd. What remedy the Parliament hath resolved and appoint
ed to cure the disease of the commonwealth.
And, 4th. The true reason of the remedy; and then the office
of all the Judges is always to make such (d) construction as
shall suppress the mischief, and advance the remedy, and to
suppress subtle inventions and evasions for continuance of the
mischief, and pro privato commodo, and to add force and life
to the cure and remedy, according to the true intent of the
makers of the Act, pro bono publico.
I am of opinion that it would amount to an inver
sion of the canon to apply it backwards as is here
proposed. It would apply if a dispute should arise
as to the interpretation of the 1980-81 amend
ment: but I would not wish to venture on obiter
dicta as to the interpretation and operation of the
amendments to section 52, in order to determine
what was the law before their enactment. Those
amendments are complex and deserve full argu
ment and their own chapter when they are them
selves properly before the Court for construction.
I conclude that the appeal must be dismissed
and the answer given by the learned Trial Judge to
the first question is affirmed namely:
... during all the period relevant to the issues in this case there
was no limitation period applicable to an action for the collec
tion of taxes and penalties under the Excise Tax Act ... .
Questions (2) and (3), based on a contingency that
has not arisen, are not answerable.
The respondent will have his costs of appeal.
PRATTE J.: I agree.
URIE J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.