The Queen v. Star Treck Holdings Ltd., 77 DTC 5311, [1977] CTC 621 (FCTD)

Cattanach, J:—This is an application requesting this Court to amend a clerical error in a certificate certified by the Director, Collections Division, Department of National Revenue, Taxation, under date of May 9, 1977 and registered in this Court under section 223 of the Income Tax Act on the same date, that an amount of $15,000 Is payable under the Income Tax Act by the defendants named in the above style and interest thereon in the amount of $225 has not been paid constituting a total amount of $15,225 together with additional interest at the rate of 6% per annum on the sum of $15,000 from the date of the filing of the certificate to the date of payment. The obligation to pay additional interest at the rate specified from the date of the certificate to the date of payment is provided for in the Income Tax Act.

The application was made by way of an ex parte notice of motion purportedly pursuant to Rule 337(6) for correction of the clerical error in the certificate and a consequential change in a writ of fieri facias issued pursuant to the request of the applicant. The style in the writ of fieri facias coincides with the style in the certificate and no error was made in this respect by the officials of the Registry of the Court. The error occurred in the certificate and the writ of fieri facias merely perpetuated the error in the certificate.

Section 223 of the Income Tax Act reads:

223. (1) An amount payable under this Act that has not been paid or such part of an amount payable under this Act as has not been paid may be certified by the Minister

(a) where there has been a direction by the Minister under subsection 158(2), forthwith after such direction, and

(b) otherwise, upon the expiration of 30 days after the default.

(2) On production to the Federal Court of Canada, a certificate made under this section shall be registered in the Court and 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 said Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.

(3) All reasonable costs and charges attendant upon the registration of the certificate are recoverable in like manner as if they had been certified and the certificate had been registered under this section.

It was requested that the application to correct the clerical error in the certificate be disposed of without the personal appearance by the solicitor for the applicant in accordance with Rule 324.

When the application first came before me for disposition in that matter I directed the Registry to invite representations from the solicitor for the applicant as to the authority of this Court to amend a certificate registered in this Court under section 223 of the Income Tax Act (quoted above) as was requested in the motion to that end as well as the propriety of the applicant seeking to amend a writ issued consequent upon the registration of the certificate in question.

Those representations have now been received.

Incidentally the clerical error is of a very minor nature. Where the word “Treck” appears in the names of the defendants in the style utilized. it should have read “Trek”. Despite the minor nature of the error, that does not detract from the magnitude of the issue upon which I invited written representations which, simply put, is whether this Court has authority to correct a clerical error in a certificate by the Minister and registered under section 223 of the Income Tax Act, and similarly whether a writ issued consequent upon the registration of a certificate and which reproduces therein precisely the pertinent language used in the certificate can be corrected which in turn depends on whether the certificate itself can be corrected by this Court. Accordingly the vital consideration is whether the certificate can be amended by this Court.

In MNR v Bolduc, [1961] Ex CR 115; [1961] CTC 265; 61 DTC 1148, Thurlow, J (as he then was) had occasion to consider subsection 119(2) of the Income Tax Act, RSC 1952, chapter 148. Subsection 119(2) was in the identical language of subsection 223(2).

At page 118 [267, 1149] he said:

For, though Section 119(2) provides that, when registered, the certificate has the same force and effect and all proceedings may be taken thereon as if it were a judgment obtained in this Court, such a certificate is not in fact a judgment, nor does Section 119(2) say that, on registration, it is to be or becomes a judgment of this Court. The effect of the making and registration of the certificate is precisely what the Income Tax Act says it is, no more and no less, and as I read the statute that effect is not that the certificate is or is to be deemed to be a judgment but simply to provide that such a certificate may be made and registered in this Court and that, upon this being done, it has the same force and effect and the same proceedings may be taken upon it as if it were a judgment. The certificate, however, in my opinion, remains merely a certificate, albeit one of a unique nature, upon which the proceedings authorized by the statute may be taken.

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 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.

This being so Rule 337(6) under which the present application is made is not applicable. Rule 337 is applicable to judgments pronounced by the Court and since a certificate is not a judgment pronounced by the Court it follows that a clerical error in a certificate cannot be cured by resort to Rule 337(6).

It seems to me therefore that the proper person to correct a certificate must be the Minister or person to whom the pertinent powers and duties of the Minister are delegated under Part IX of the Income Tax Regulations.

The solicitor for the applicant cites, as authority for the proposition that this Court has the power to correct errors in certificates of this nature which have been registered in accordance with a statutory provision, a passage from the decision of my brother Thurlow in the Bolduc case (supra) which follows in the paragraph immediately after the passage which I have quoted:

It does not follow, however, that the making of such a certificate and its registration are not open to attack of any kind. The certificate is a creature of Section 119 of the Income Tax Act and that Act is the sole authority for its registration in the records of this Court. The interpretation and enforcement of Section 119 itself is a matter over which this Court has jurisdiction under Section 29 of the Exchequer Court Act, if not under any other statutory provision, and a person affected by the registration of such a certificate is entitled to invoke the exercise of the Court’s jurisdiction to determine the regularity or otherwise of its making and registration. Moreover, as the registration of the certificate is an act carried out in the Court, I think the Court has jurisdiction to examine both the constitutional validity of the statute authorizing such procedure and the facts upon which the right of the Minister to make such a certificate and to have it registered in this Court depends, the whole as an incident of its inherent authority to secure and maintain the legality of its records and to correct or avoid abuse of its processes.

As I appreciate that passage it is not authority for the proposition for which it is advanced, that is to say, that this Court may correct a certificate as registered.

On the contrary it is authority for the proposition that a person affected by the registration of such a certificate is entitled to invoke the exercise of this Court’s jurisdiction to determine the propriety or otherwise of the registration and that it is open to a person against whom such a certificate is registered to contest it by way of an independent proceeding claiming invalidity in the certificate or its registration. He adds that the Court has jurisdiction to examine the constitutional validity of the statute authorizing the registration of a certificate and the facts upon which the right of the Minister to make such a certificate and to have it registered depends.

To say that the person affected by the certificate may attack the certificate by impugning the constitutional validity of the statute authorizing the procedure, the making of the certificate by the Minister and the registration thereof in contravention of the conditions precedent to registration is a far different thing from saying that the Court has jurisdiction to correct a certificate which has been registered. To correct a registered certificate is tantamount to amending or varying the certificate and this, I think, is beyond the jurisdiction of this Court to do.

When Mr Justice Thurlow used the word “correct” in the context of the passage cited from the Bolduc case he used it in the sense of the Court’s inherent jurisdiction to maintain the “legality of its records” and to “correct or avoid” abuse of its processes. There is no doubt that the rule of noscitur a sociis is applicable and the word “correct” as so used is controlled by reference to its context and in that context the word “correct” assumes the colour of its neighbouring word “avoid” and the grammatical object which both the words “correct or avoid” govern and that object is “abuse of its processes”.

A somewhat analogous situation has arisen with respect to the registration of maintenance orders under Reciprocal Enforcement of Maintenance Orders Acts which are uniform statutes enacted by most, if not all, of the provinces of Canada.

Those statutes consistently provide, in effect somewhat similar to Subsection 223(2) of the Income Tax Act, that upon registration of an order given by the court of a reciprocating province, all proceedings may be taken thereon as if the order has been an order originally obtained in the court in which the order is registered. It has been held that the court in which the order is registered does not have the power to vary the order given by the court of the other province for the obvious reason that the order is not the order of the court in which it is registered but remains the order of the court which made the order and the court in which the order is registered is limited to enforcement of the order by its processes (see Re Pasowysty and Foreman (1969), 5 DLR (3d) 427, followed in Rhinhart v Rhinhart (1973), 35 DLR (3d) 555, and in Falkner v Falkner, [1974] 3 WWR 446, but see Re Short and Short (1950), 40 WWR 592, to the contrary disapproved and not followed in Re Pasowysty and Foreman (supra)).

Recently in International Brotherhood of Electrical Workers, Local Union 529 v Central Broadcasting Company Ltd (Court file T-403-75 as yet unreported) I had occasion to consider, amongst other things, the authority of this Court to order that an order of the Canada Labour Relations Board dated February 19, 1975 filed and registered in this Court under section 123 of the Canada Labour Code (RSC 1970, c L-1, as amended by SC 1972, c 18) on March 12, 1975, should be filed and registered with retrospective effect to March 12, 1975.

This request was inspired by the decision of my brother Walsh in Le Syndicat Canadien de la Fonction Publique, Local 660 v La Société Radio Canada (Court file No T-3542-75) granting a petition to strike out the registration of an arbitration award made by the Labour Relations Board and purporting to be registered with this Court under section 159 of the Canada Labour Code.

Except for minor differences in language dictated by the subject matter the language of section 159 before Walsh, J and section 223 which was before me is identical.

Mr Justice Walsh held that for the registration of the order of the Board to be valid it must have been registered pursuant to a notice of motion served on the opposite party and supported by affidavits establishing the conditions precedent to registration in subsection 159(1) that the decision or order of the Board had not been complied with. This had not been done and accordingly the registration was Struck as invalid.

In the case before me I followed and applied the decision of my brother Walsh. In fact I went further than Mr Justice Walsh and held the registration of the order of the Board to be a nuility.

Counsel for the applicant in that matter recognized that for the order of the Board to be susceptible of enforcement by the processes of this Court the order should have specifically set forth the time within which that which was ordered to be done must be done. Accordingly I was requested in the notice of motion to fix a time for compliance with the Board’s order.

This I refused to do because what I was being asked to do was to tamper with the Boards order which I do not have the authority to do for the simple reason that the order remains an order of the Board and does not become an order of this Court on filing and registration even though subsection 123(2) provides that when the order is registered it shall have the same force and effect and all proceedings may be taken thereon as if the order or decision of the Board were a judgment obtained in this Court.

The similarity of the language of sections 123 and 159 of the Canada Labour Code and section 223 of the Income Tax Act is striking. The sections in each statute provide first for the conditions precedent to registration of the order and then provide the consequences which flow from that registration. However if the registration is found to be a nullity no consequences follow from the registration and my brother Thurlow has made it abundantly clear in the Bo/duc case (supra) that the validity of the making of the certificate and of its registration are the proper subjects of attack by a person affected by the certificate and its registration.

As I did in International Brotherhood of Electrical Workers, Local Union 529 v Central Broadcasting Company Ltd, I cannot refrain from emphasizing that the Minister, and in so referring to the Minister I am not to be construed as referring to the Minister personally but only in his representative capacity knowing, as I do, that the powers and duties of the Minister in these respects are delegated to responsible officers of the Department of National Revenue, should know and understand the unique nature of these certificates authorized by section 223 of the Income Tax Act and in the making and registering of these certificates, which is done in multitudinous numbers, extreme caution should be exercised to ensure the complete accuracy of what these responsible officers are called upon to certify and that all conditions precedent to the registration of a certificate have been fulfilled. That a person affected by the certificate can impugne the making thereof and the validity of its registration is not subject to doubt and not to establish the conditions precedent to registration is to invite the registration being found to be a nullity in an appropriate proceeding. In the present matter it is not incumbent upon me to make any finding as to the validity of the registration and I do not do so but if one or other of the two conditions precedent imposed by subsection 223(1) quoted above have not been established prior to registration under subsection (2) it follows that an attack on the validity of the registration would be well founded and that subsequent establishment that one or other of those conditions in fact existed cannot retrospectively render the registration valid.

That the affiant of the affidavit submitted in support of the present motion or the draftsman of that affidavit fails to appreciate the nature of the certificate is abundantly clear from paragraphs 2 and 4 of that affidavit.

In paragraphs 2 and 4 the affiant swears that he has “reviewed the certificate issued by this Honourable Court on the 9th day of May, AD 1977 as Court file No T-1844-77” attached as Exhibits 1 and 2 respectively.

This Court did no such thing. The Court issued no certificate. What was issued, made or created, or whatever descriptive word Is to be used, emanated from the author of the certificate, in this instance an officer bearing the title Director, Collections Division, Department of National Revenue, Taxation.

Only these bare certificates identified as Exhibits 1 and 2 in the supporting affidavit to the present motion were tendered for registration on May 9, 1977 and were simply registered by officials of the Court Registry on that date. It was not established by affidavit or other means that there was a direction by the Minister under subsection 158(2) of the Income Tax Act or that a period of 30 days had expired after default of payment either of which circumstances must first be present by virtue of subsection 223(1) before the Minister may certify that an amount payable under the Act has not been paid in full or in part.

At one time the form of certificate stated that a period of 30 days from the date of assessment had elapsed and the officer who signed the certificate must be taken to have certified. That statement has been eliminated from the printed forms now in use which in itself is a retrograde step and I entertain grave doubts if the inclusion of the Statement formerly used was sufficient to establish compliance with the requirements of subsection 223(1) or its predecessor section and the validity of the registration in the event of an attack on the validity of the registration which I am not obliged to determine in the present matter and I do not do so.

The form of certificate presently in use is fraught with inaccuracies and those inaccuracies follow from a failure to appreciate the significance of what was stated by Thurlow, J in the Bolduc case (supra). He stated unequivocally that the certificate is not a judgment obtained in this Court nor does it become a judgment of this Court when registered. It remains what it was originally and that is merely a certificate made by the author of the document which by virtue of subsection 223(2) of the Income Tax Act may be enforced as if it were a judgment of this Court which it is not.

Accordingly it is inaccurate for the form of certificate in use by the Minister to be styled, as it is, “In the Federal Court of Canada, Trial Division’’. Rather the form should be directed “To the Federal Court of Canada, Trial Division’’.

Further it is equally inaccurate to recite a style of cause as between Her Majesty the Queen, as plaintiff and named persons as defendants. There is no authority in the Income Tax Act, in the Federal Court Act, in the Rules of Court or elsewhere of which I am aware or that I can find that there is deemed to be an action between the parties so named. There is in fact no action nor can there be an action until a statement of claim is filed with an appropriate style of cause and section 223 of the Income Tax Act does not contemplate an action being launched but specifically avoids the necessity thereof. The section provides a short-cut without actual suit. That being so it is incumbent upon those in whose hands this weapon is placed to fully appreciate its use and to be meticulous and accurate in the detail of using it.

Obviously the proper style to be used should be somewhat as follows:

“To the Federal Court of Canada, Trial Division

In the matter of the Income Tax Act"

(and it might be advisable to include an appropriate citation and reference to the section of that Act),

and

“In the matter of an assessment by the Minister under the Income Tax Act (for the appropriate taxation year) against (the taxpayer as identified by name and address) then followed by the word ‘Certificate’ and the body which will certify the amount payable by the taxpayer under the Income Tax Act which has not been paid.’’

I have perpetuated this inaccuracy in the form in these reasons by using the style of cause used in the motion but I do so merely for the purpose of the convenience of the Registry in placing the material on the appropriate file which is designated by a style of cause and an assigned number and in so doing I am not to be construed as condoning an inaccurate practice by the authors of these certificates.

As previously intimated and for the reasons expressed in that regard, Rule 337(6) is not available to the applicant to correct errors in the certificate produced by the applicant for registration and I have been unable to find in the Income Tax Act any provision under which the Minister may move to correct errors in a certificate compiled by him which have been found to exist after registration nor has any such provision been cited to me.

Accordingly, for the foregoing reasons, the application to correct the certificate is refused and it follows from such refusal that the consequential application to correct the writ of fieri facias is likewise refused for the additional reason that no error has occurred in the issuance of that writ by the Registry officials.

The error in the certificate is an insignificant one but the principle involved in the motion is not. While it is not my function, at this time, to say it might well be, since the error in the certificate is the omission of a single letter of the alphabet from one word in the corporate name of one taxpayer, comprised of four words and many letters, which operates presumably as an individual carrying on business under other names in which no error has been made, that the taxpayers against whom execution is sought are sufficiently identified to permit the sheriff to execute the writ against those taxpayers who are correctly identified as well as the taxpayer whose name includes a slight error which might not be sufficient to destroy the identification of that taxpayer.

This is a gratuitous comment and is not to be construed as binding or authoritative in any way. In the light of the dismissal of the motion herein what further course or courses to be adopted remain the decision of the applicant.