T-345-73
The Queen (Plaintiff)
v.
Creative Graphic Services, and Craft Graphic
Services Ltd. (Defendants)
Trial Division, Collier J.—Toronto, March 18;
Ottawa, May 28, 1974.
Sales tax—Recovery of sums owing by tax debtors—
Attachment of monies from subsequent earnings of one
debtor—Excise Tax Act, R.S.C. 1970, c. E-13, ss. 40, 50,
52, 55.
Giving judgment in this action, the Court observed that
the agreed statement of facts was "not truly apt to the
pleadings and relief sought" but, at the request of counsel, a
decision was reached on that statement, as amended by
additions.
The defendant Creative Graphic Services, partnership and
licensee under the Excise Tax Act, reported but failed to pay
the sum of $9,400 in sales taxes. The partners K and D were
individually prosecuted; K paid fines of $1,000 and the sum
of $6,800 against the amount owing. D, convicted, in
absentia, was fined $800 and ordered to pay the $2,600
balance owing. Subsequently K became president and an
employee of the defendant Craft Graphic Services Ltd. By
notice on behalf of the plaintiff, demand was made for
payment out of the earnings of K of a sum which the Court
found was for a further amount owing by the partnership for
sales tax, interest and penalties. The sum of $1,715 was
claimed against both defendants.
Held, 1. the plaintiff was entitled to judgment against the
defendant Creative Graphic Services for $1,715, the sum
admitted as owing by the partnership to the Crown. The
plaintiff was not entitled to penalties or interest on the sum
of $1,715, as it had not indicated how the sum was arrived
at, nor the dates from and to which the penalties and interest
ought to have been calculated. Nor was the plaintiff, having
sued only the firm, entitled to a declaration that K and D
were partners in it. The request, on behalf of K, that the
judgment should not apply against him, was rejected.
2. The action against the defendant Craft Graphic Ser
vices Ltd. should be dismissed. The demand upon the com
pany for payment of the sum owing out of the salary of its
employee was made under section 52; subsection (6) was a
wide form of garnishment and must be strictly construed.
The demand here was ineffective or invalid for failure to
comply with the wording of the subsection.
Royal Trust Co. v. Montex Apparel Industries Ltd.
[1972] 3 O.R. 132, applied.
ACTION.
COUNSEL:
H. Erlichman for plaintiff.
B. A. Dunn for defendant Creative Graphic
Services.
P. A. Vita for defendant Craft Graphic Ser
vices Ltd.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Levinson, Sack & Dunn, Toronto, for
defendant Creative Graphic Services.
Robertson, Lane & Co., Toronto, for
defendant Craft Graphic Services Ltd.
The following are the reasons for judgment
delivered in English by
COLLIER J.: The plaintiff sues to recover
from both defendants the sum of $1,715 alleged
to be owing to the Crown by virtue of certain
provisions of the Excise Tax Act'. To under
stand the problem, it is necessary to set out the
facts. An agreed statement of facts was filed at
the opening of the trial. Additional facts were
agreed upon during argument.
I shall set out the agreed statement. I have
added, in the appropriate places, the additional
facts referred to:
1. Creative Graphic Services, a partnership between one
Carl Hans Kristensen and one Robert Bruce Douglas
applied for and received Sales Tax Licence No. S5-2102
pursuant to the Excise Tax Act, R.S.C. 1952, c-100, now
R.S.C. 1972 [sic], on July 26th, 1967. The license was
issued in the name of Creative Graphic Services.
2. Creative Graphic Services was in the business of printing
and upon the sale and delivery by it of printing became
liable to taxation under the Excise Tax Act.
3. During the period between June 1st, 1967 and April 30th,
1969 Creative Graphic Services reported but failed to pay to
Her Majesty the Queen sales tax in the amount of
$9,482.22.
4. The said Carl Hans Kristensen and Robert Bruce Douglas
were individually but not jointly prosecuted pursuant to the
R.S.C. 1970, c. E-13 and amendments. I shall use the
section numbers as they now appear in the 1970 revision,
but where necessary, I shall indicate the numbers which
preceded that revision.
provisions of the Excise Tax Act for the failure of Creative
Graphic Services to pay the required sales tax. On the 9th
day of April, 1970, Kristensen appeared before His Honour
Provincial Judge Bolsby and pleaded guilty to 10 charges of
failure to pay sales tax of a total amount of $6,845.78.
Pursuant to his plea of guilty before the Provincial Court
Judge, Kristensen was ordered to pay fines in the total sum
of $1,000 and the sum of $6,845.78 (the latter being an
amount equal to the tax that should have been paid). The
taxes and fines have been paid. On the same date, Douglas
was convicted in absentia with respect to 8 counts of failure
to pay tax and a fine of $100.00 on each count was imposed.
In addition, Douglas was ordered to pay a sum equal to the
difference between $6,845.78 (the amount Kristensen was
ordered to pay) and the sum of $9,482.22 set out in
paragraph 3.
5. On or about August 17th, 1971 the said Carl Hans
Kristensen was president and an employee of Craft Graphic
Services Ltd., and earning in excess of $50.00 per week.
6. The said Carl Hans Kristensen continued to be employed
by Craft Graphic Services Ltd., as president or vice presi
dent until February, 1973, during which period he earned in
excess of $50.00 per week. Each week during the period
August 17, 1971 to February 1, 1973, the defendant Craft
Graphic Services Ltd., was indebted to and paid Carl Kris-
tensen in excess of $50.00 per week.
7. On or about August 17th, 1971, the officers of the
Department of National Revenue made demand upon Craft
Graphic Services Ltd., pursuant to Section 50 of the Excise
Tax Act for payment by the said Craft Graphic Services
Ltd., of an amount sufficient to retire the liability of Crea
tive Graphic Services and/or Carl Kristensen shown in the
amount of $4,210.51, or the amount by which you are or
may become indebted, whichever is the lesser amount. A
copy of the said demand is annexed as Exhibit "A" to this
Agreed Statement of Facts.
8. To date no money has been paid by Craft Graphic
Services Ltd., to the Plaintiff.
9. The amount presently owed by Creative Graphic Services
is $1,715.00.
The relevant portion of the demand referred
to (Exhibit "A") is as follows:
It is believed you are, or are about to become, indebted to
Creative Graphic Services,
and/or Carl Kristensen,
36 Dunsany Crescent,
Weston, Ontario.
hereinafter called the licensee.
You are hereby required to pay over to the Receiver Gener
al of Canada an amount sufficient to retire the liability of
the licensee, as hereinafter shown, or the amount by which
you are or may become indebted, whichever is the lesser
amount.
The liability of the licensee is as follows: $4,210.51 federal
sales tax and accrued penalty interest.
(Payment at the rate of $50.00 per week from salary,
income or other monies received will be satisfactory to the
Department).
Payments may be made to
Regional Chief,
Excise Tax Collections,
P. O. Box 460, Stn. "Q",
Toronto 290, Ontario.
who will furnish you with receipts therefor.
Discharging any liability to the licensee after receipt hereof
renders you personally liable to the extent of the liability
discharged or the amount claimed herein, whichever is the
lesser amount.
This demand is made pursuant to section 50, subsections
(6), (7), and (8), of the Excise Tax Act, R.S.C. 1952,
Chapter 100, as amended, which follows below.
Counsel for the plaintiff states the amount
now claimed, $1,715 is penalties and interest
only. How that sum is arrived at was not
disclosed.
The plaintiff's claim for relief, as I now
understand it, (and I use paragraphs 8 to 10 of
the statement of claim as a guide) as against the
defendant Creative Graphic Services is for
$1,715 plus any additional penalties and interest
which may be owing.
As against the other defendant, the limited
company, the plaintiff claims payment in the
sum of $1,715 pursuant to the demand referred
to as Exhibit "A" and a declaration that the
company "is liable to make payment of sums
due and owing by it to Carl Kristensen to the
Receiver General of Canada pursuant to the
said demands".
As against both defendants, the plaintiff
claims further "a declaration that ... (Kristen -
sen) ... and ....(Douglas) ... are partners in the
firm Creative Graphic Services".
A defence was filed on behalf of Creative
Graphic Services by Mr. Dunn's firm. Mr.
Dunn, at trial, said he appeared as counsel for
Mr. Kristensen and spoke only for him. The
defences raised are: (1) to the extent the plain
tiff is seeking to recover a penalty, the proper
plaintiff should have been the Minister of Na
tional Revenue; and (2) the plaintiff is estopped
because she took the proceedings referred to in
paragraph 4 of the agreed facts to recover the
monies owing. It is said that the previous pro
ceedings exhausted all of the plaintiff's reme
dies, or in any event, the plaintiff should be
restricted in her remedies to the one already
exercised.
The defence of the limited company is as
follows: Kristensen was not a licensee under the
Excise Tax Act, the partnership Creative Graph
ic Services was the licensee; the company was
on the relevant date (August 17, 1971, the date
of the demand) not indebted to the partnership
(the licensee) but to someone (Kristensen) who
was not a licensee; the demand was therefore
ineffective. Alternatively, it is submitted that if
the demand was effective in respect of Kris-
tensen, it could only ensnare $50 and not the
full amount said to be owing; in other words,
the demand could not be a continuing demand
until the whole sum had been paid.
Before dealing with the particular claims
advanced and the submissions made, I feel I
should make some observations about the way
in which this action proceeded at trial. At the
opening, I expressed doubts whether the agreed
statement of facts, as originally presented, and
in the absence of any further evidence, con
tained sufficient facts for the Court to be able to
come to a decision having regard to the allega
tions in the statement of claim, the relief
claimed, and the defences pleaded. All three
counsel indicated they could not see any dif
ficulty in that regard. During the course of argu
ment, it became apparent that the initial state
ment of facts was indeed insufficient and
further facts were then agreed to. Further re
flection has confirmed my view that the state
ment of facts, in a number of respects, is not
truly apt to the pleadings and relief sought. All
counsel, however, appeared anxious to proceed
on the basis of the agreed facts as added to. I
have, therefore, endeavoured to reach my deci
sion on that basis.
I turn now to the claim against the defendant
Creative Graphic Services. It is convenient, at
this stage, to set out certain portions of sections
52 (formerly section 50) and 55 of the Excise
Tax Act. These sections are found in Part VI of
the statute:
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 Exchequer Court of
Canada or in any other court of competent jurisdiction.
(2) Every penalty incurred for any violation of this Act
may be sued for and recovered
(a) in the Exchequer Court of Canada or any court of
competent jurisdiction; or
(b) by summary conviction under the provisions of the
Criminal Code relating thereto.
(3) Every penalty imposed by this Act, when no other
procedure for the recovery thereof is provided by this Act,
may be sued for, prosecuted and recovered with costs by
the Attorney General of Canada or, in the case of penalties
under Part I, in the name of the Minister of Finance and, in
the case of penalties under any other Part, in the name of
the Minister of National Revenue.
(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 Exchequer 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 attendant
upon the registration of such certificate are recoverable in
like manner as if they were part of such judgment.
(5) In any case where judgment is obtained for any taxes
payable under Part II or Parts III to VI, the provisions in
such part or Parts by which a penalty is imposed for
non-payment of such taxes or for failure to remit such taxes
are applicable, with such modifications as circumstances
require, to non-payment of such judgment, and the penalty
is recoverable in like manner as the judgment debt.
(6) When the Minister has knowledge or suspects that any
person is or is about to become indebted to a licensee he
may, by registered letter, demand of such person that the
moneys otherwise payable to the licensee be in whole or in
part paid over to the Receiver General on account of the
licensee's liability under this Act.
(7) The receipt of the Minister therefor constitutes a good
and sufficient discharge of the liability of such person to the
licensee to the extent of the amount referred to in the
receipt.
(8) Any person discharging any liability to a licensee after
receipt of the registered letter referred to is personally liable
to the Receiver General to the extent of the liability dis
charged as between him and the licensee or to the extent of
the liability of the licensee for taxes and penalties, which
ever is the lesser amount.
55. (1) Every person who, being required, by or pursuant
to this Act, to pay or collect taxes or other sums, or to affix
or cancel stamps, fails to do so as required is guilty of an
offence and, in addition to any other penalty or liability
imposed by law for such failure, is liable on summary
conviction to a penalty
(a) not being less than the aggregate of twenty-five dollars
and an amount equal to the tax or other sum that he
should have paid or collected or the amount of stamps
that he should have affixed or cancelled, as the case may
be, and
(6) not exceeding the aggregate of one thousand dollars
and an amount equal to the aforesaid tax or other sum or
aforesaid amount of stamps, as the case may be;
and in default of payment thereof to imprisonment for a
term of not less than thirty days and not more than twelve
months.
(2) Every person who has contravened any of the require
ments of this Act or of a regulation made by the Minister
under this Act for which no other penalty is provided is
liable, on summary conviction, to a penalty of not less than
fifty dollars and not exceeding one thousand dollars.
The first submission by Mr. Dunn is that the
Minister of National Revenue is the proper and
only plaintiff, or alternatively, the Minister
should be a co-plaintiff. Reference is particular
ly made to subsection 52(3). I do not find any
merit in this argument. Her Majesty, in my
view, is a proper plaintiff. It is not necessary to
have the Minister of National Revenue as a
plaintiff. The word used in the subsection is
"may". The Attorney General can, if he wishes,
bring proceedings such as this in the name of
the Minister. In my view, he is not required to
do so.
The second submission is that the plaintiff
has taken proceedings under section 55 against
'Kristensen and Douglas; the total tax owing at
that time was ordered to be paid; in addition
fines were assessed; all those amounts have
been paid; the plaintiff, having taken that par
ticular course and effected recovery thereby,
cannot now seek to recover the same tax, or an
amount based on it, in these civil proceedings. I
am unable to accede to this second submission
for two reasons. Firstly, there is nothing in the
statute to prevent the plaintiff from in effect,
recovering twice-over the amount of tax, penal
ty and interest owing, however unconscionable
that might be. No authority to the contrary was
cited to me. Secondly, there is nothing in the
agreed facts to indicate the sum now claimed
($1,715) has already been recovered from either
Kristensen or Douglas, or both, as a result of
the decision of the Provincial Court Judge
ordering payment of $9,482.22, the amount of
tax accruing between June 1, 1967 and April 30,
1969. I cannot infer that the amount now
claimed was part of the $9,482.22. In fact, after
considering the statement of claim and the fig
ures there set out, it seems likely the present
sum claimed is something additional to the
amount in respect of which the prosecutions
were laid. The plaintiff is therefore entitled to
judgment against Creative Graphic Services for
$1,715.
It was contended that if judgment were given
against Creative Graphic Services, some direc
tion should be included that the judgment not
apply against Kristensen. I am unable to under
stand why such a direction ought to be made,
but in any event, I cannot give effect to it
having in mind the way in which this action is
framed, and the agreed facts. In paragraph 1 of
the agreed facts, Creative Graphic Services is
described as a partnership between Kristensen
and Douglas. In paragraph 9, it is agreed: "The
amount presently owed by Creative Graphic
Services is $1,715.00". The defendant in the
style of cause is Creative Graphic Services and
it is against that entity I give judgment. I do not
express any views as to whether or not that
judgment can be realized against Kristensen.
I do not allow the plaintiff any amount by
way of further penalty or interest over and
above the specific sum of $1,715. The plaintiff
has not indicated how the sum claimed was
arrived at, nor the dates from and to which the
penalty and interest have been or ought to be
calculated. The plaintiff also claims a declara
tion that Kristensen and Douglas are partners in
the firm Creative Graphic Services. In my opin
ion, the plaintiff is not entitled, in this proceed
ing and as it is framed, to such a declaration.
The plaintiff did not choose to name Kristensen
and Douglas personally as defendants. She
chose to sue the firm. Again, I express no
opinion as to what legal results against the
individuals flow from a judgment against the
firm.
I turn now to the case against the company.
Counsel for the Crown relies on subsections
52(6) and (7). He submits: on the date of the
demand, Kristensen was an employee of the
company; the company was indebted to him
from August 17, 1971 to February 1, 1973 in
amounts in excess of $50 per week; the com
pany paid Kristensen during that period
amounts in excess of $50 per week; those
amounts in excess of $50 per week ought to
have been paid to the Receiver General (subsec-
tion (6)); the company is liable to the Receiver
General for the amounts so paid to Kristensen
(in excess of $50 per week, or for the amount of
the tax and penalty owing by the "licensee",
whichever is the lesser amount (subsection (8)).
Counsel for the company raises several
defences:
Kristensen was not a "licensee" within sub
section (6); Creative Graphic Services was the
"licensee"; the relevant sections of the statute
must be strictly construed. By section 40 of the
Act, every "person" who is required to pay
taxes, must apply for a licence. Creative Graph
ic Services, a partnership, applied in this case
and the licence was issued in the firm name.
"Person" is given the following meaning by
subsection 2(1) of the Act:
"person" includes any body corporate or association, syndi
cate, trust or other body and the heirs, executors, and
administrators thereof and the curators and assigns or
other legal representatives of such person according to the
law of that part of Canada to which the context extends;
I am in agreement that the provisions of the
statute conferring this special right of collection
must be strictly construed. Subsection 52(6) is a
wide form of garnishment. The Minister need
not, before issuing a demand, prove or establish
to anybody that any tax is owing by anybody,
nor issue, obtain or file anywhere a certificate
of indebtedness, nor obtain a judgment against
the licensee. If the Minister's demand seeks to
attach salary, the subsection appears to be wide
enough to entrap all salary (at least that portion
owing at the date of the demand) without any
statutory allowance or exemption so that the
alleged debtor and his family may, for practical
purposes, financially survive. The Minister,
having been given such an extraordinary
remedy, must rigidly comply with the provisions
of the Act. I refer to Royal Trust Co. v. Montex
Apparel Industries Ltd. [1972] 3 O.R. 132. A
demand, pursuant to subsection 52(10) (former-
ly subsection 50(10)) had been issued by the
Minister purportedly directed to a receiver
appointed by the Court in the course of a fore
closure proceeding. The facts there are, as
usual, different from the facts before me. The
following passage from the judgment of the
Ontario Court of Appeal is, I think, of some
assistance on the point of strict compliance,
(pages 136-37):
We therefore conclude that the Minister has not brought
the receiver within the definition of "person" in the Act and
that therefore the receiver is not an assignee of a book debt.
Consequently any demand directed to the receiver as such
assignee is, in our opinion, ineffective in law. This conclu
sion is sufficient to dispose of the appeal by the trustee but
in addition to this ground we rely upon the facts also with
respect to the delivery of the demand. The relevant sections
of the Excise Tax Act create substantive rights in the
Minister; that is to say, if the Minister complies with the
statutory provisions in issuing and delivering the demand
contemplated by those provisions and if the person to whom
that demand is directed is an assignee of a book debt, as
contemplated by the statute then, but not otherwise, the
Minister has conferred upon him by the statute the extra
right of being able to collect the debtor's debt to the Minis
ter from a third party, that is to say, the assignee of the
debtor's book debt.
It is abundantly apparent, of course, that corresponding to
that right so conferred upon the Minister is an obligation
imposed upon the assignee to make payment to the Minister
and it is trite, I think, to observe that in the creation or
attempted creation of such a right in the Minister, the
Minister is bound to strict observance of the conditions
precedent upon which that special right granted to the
Minister depends. The form of notice adopted by the Minis
ter and actually delivered in the case at bar makes it
abundantly clear that it is a notice, personal to the assignee
and to no one else and, of course, that is the only type of
notice contemplated by s. 50(9) and (10) of the Act. That
notice in the case at bar was addressed not to J. S. White-
head, the receiver, but to McDonald, Currie and Co., Char
tered Accountants, Attn: Mr. J. S. Whiteside. While it is true
that the receiver is a partner or associate of the named firm
of chartered accountants, the demand was not directed
either to him or, in its terms, to his attention, and on that
ground also we would negate the Minister's claim for
priority.
In my opinion, a "person" who applies for
and receives a licence, can be a firm, in con
tradistinction to the individuals who comprise
the partnership. Creative Graphic Services, to
my mind, falls within the words "... body
corporate or association, syndicate, trust or
other body ..." as found in the description of
"person" in subsection 2(1). The Minister chose
to grant a licence to this particular person, Crea
tive Graphic Services (see subsection 40(2)). It
alone became the licensee, in my opinion,
referred to in subsection 52(6), and not Kris-
tensen or Douglas, or all three. The company
was never at any time indebted to its co-defend-
ant, the licensee. The demand, therefore, is
ineffective.
It seems to me also the demand, in the way in
which it describes the alleged licensee, could be
set aside for vagueness. It states in part: ".. .
you are, or about to become, indebted to Crea
tive Graphic Services and/or Carl Kristensen
... hereinafter called the licensee". The garni
shee (that word is not used in the statute, but it
is a convenient one to describe the person to
whom a demand is directed) is to my mind, left
in doubt, as to the precise person to whom he is
allegedly indebted. I am not convinced the
unhappy combination "and/or" is capable of
precise meaning, nor that it is strict compliance
with the terms of the statute. I express no final
view.
The next defence is an alternative to the first
one: if Kristensen was a licensee, then the Com
pany, as of August 17, 1971, was indebted to
him in respect of earnings owing at that date
only; the demand required payment of $50 of
that amount; the demand cannot embrace possi
ble future indebtedness; the liability of the
Company is therefore limited to the $50. The
essence of this contention is that the demand
could not, on the facts here, require payment to
the Receiver General of Kristensen's salary, or
the portion specified, from August 17, 1971 on
into the future until the full amount demanded
had been satisfied.
I am in agreement with that submission.
There must, in my view, be clear words in the
statute, enabling the Minister to garnishee to the
extent urged on behalf of the plaintiff. I find no
such clear words. The Minister is, by virtue of
subsection (6), entitled to demand "... the
moneys otherwise payable ..." from a person
who is indebted to a licensee or is about to
become indebted to a licensee. The construction
advanced on behalf of the plaintiff seems to me
largely to disregard the words "the moneys
otherwise payable". As I see it, the words "is or
about to become indebted" are not the sole or
controlling description when one endeavours to
ascertain precisely what moneys the Minister
may garnishee. The words "is or about to
become indebted" have another function.
Before the Minister may issue a demand he
must have knowledge or suspicion of an indebt
edness, or of what I shall term, an imminent
indebtedness. The quoted words thus provide,
in one context at least, guidance as to the point
in time, and the grounds on which, the demand
may issue. The moneys sought to be attached
must arise out of an already existing debt, or an
imminently pending debt 2 , but at the same time,
in my opinion, they must be "payable" at the
date of the demand. I was referred to Bank of
Montreal v. Union Gas Company of Canada
Ltd. [1969] C.T.C. 686 and Re Royal Bank of
Canada and Attorney General of Canada [1970]
C.T.C. 440. Subsection 120(1) of the former
Income Tax Act, which is similar to subsection
52(6) of the Excise Tax Act, was considered in
those two decisions, but the facts and the prob
lems were quite different from the matter
before me. The decisions appear to hold how
ever, that a demand under subsection 120(1) of
the Income Tax Act creates a charge "... not
on monies owing or accruing due as in the case
of an attaching or garnishee order but on
`moneys otherwise payable' at the time of deliv
ery of the demand" 3 .
In this case, the moneys exigible at the date
of the demand were whatever moneys were
payable at that time as earnings. The inference
to be drawn from the agreed facts is that Kris-
tensen's earnings were calculated and paid on a
weekly basis. If the demand had been an effec
tive one, I would have held the amount the
Company were required to pay was the amount
owing at the date of the demand. In this case,
2 Compare section 224 of the 1972 Income Tax Act
(formerly section 120). The words used in subsection (1) are
.. a person is or about to become indebted or liable to
make any payment ..." (my emphasis). The "moneys other
wise payable" under section 224, it seems to me, can arise
out of something in addition to an existing debt, or an
imminently pending debt.
See page 691 of the Union Gas case (supra).
the Minister in the demand, appears to have
limited himself to $50. My notes of argument
indicate counsel for the Company suggested an
alternative limited figure would be $312. I
assume that figure to be Kristensen's weekly
earnings at the time, but there is nothing in the
agreed statement of facts or in the transcribed
portion of the argument where additional facts
were agreed upon, to allow me to use the figure
of $312.
The demand is, as I see it, ineffective or
invalid for other reasons not raised by counsel.
The demand requires the Company to pay ".. .
an amount sufficient to retire the liability of the
licence ... ($4,210.51 federal sales tax and
accrued penalty interest) ... or the amount by
which you are or may become indebted, which
ever is the lesser amount". In my view, the
demand must conform to the words of the stat
ute. It does not. The amount "by which you
may become indebted" is not the same thing as
the amount "by which you are about to become
indebted"."
Next, the subsection in question provides that
the Minister may demand that the moneys
otherwise payable be in whole or in part paid
over to the Receiver General. In the demand
here, it is stated: "Payment at the rate of $50.00
per week from salary, income, or other monies
received will be satisfactory ...". In my view,
the Minister must precisely specify what part, if
any, of the monies payable are, in effect,
exempt. In the demand in question, the amount
payable by the Company is discretionary, pro
vided a minimum amount of $50 is paid over.
That to me, is not strict compliance with the
terms of the statute.
I should add this final observation. Even if I
had been able to reject all arguments advanced
on behalf of the Company, and to hold the
4 The French version of subsection 52(6) is in part: "ou
sur le point de le devenir".
demand to be effective to attach future earnings
payable to Kristensen, there still would have
been insufficient facts on which to base the
judgment sought. Subsection 52(8) provides that
the Company is liable to the Receiver General
to the extent of the monies paid by the Com
pany to Kristensen which ought to have been
paid over to the Receiver General, or to the
extent of the liability of the licensee for taxes
and penalties—whichever is the lesser. I am
unable to ascertain from the facts here which is
the lesser. All I know is that the Company paid
Kristensen in excess of $50 per week for a
period of two years and five to six months from
the date of the demand. For all I am aware, the
excess may have been merely $1 per week. On
the facts here, I cannot determine what is the
lesser amount.
In the result, the plaintiff will have judgment
against Creative Graphic Services for $1,715
and its costs of that part of the action. The
action as against the defendant Craft Graphic
Services Ltd., is dismissed. That defendant is
entitled to its costs against the plaintiff.
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.