Date: 20050603
Docket: T-37-05
Citation: 2005 FC 802
BETWEEN:
PAUL HECKENDORN
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
MELISSA KOLBE, D. FOLSTAD,
BRENDA KRELL, KEVIN J. RITCEY
Defendants
INTRODUCTION
[1] The Defendants seek to strike out the Statement of Claim in this action by which the Plaintiff claims injunctive relief restraining the Defendants from further collection of a tax debt, return of some $10,000 already garnished, together with substantial damages, including punitive damages and damages for infliction of mental anguish and, in effect, a finding that the Income Tax Act does not exist as an enforceable statute.
[2] At issue on this motion are not Mr. Heckendorn's apparent difficulties and hardships, or an unsympathetic driving of Mr. Heckendorn from the judgment seat, or an allegedly less than complete filed defence by the Crown: rather the test is of the Statement of Claim itself, as a vehicle upon which to found, or in which is embodied, a reasonable cause of action. Also at issue, since the Statement of Claim is struck out, in the case of the individual Defendants as frivolous and as an abuse of process and, in the case of Her Majesty the Queen in Right of Canada, by reason of both want of jurisdiction and a reasonable cause of action and an abuse of process, is whether there is a scintilla of a cause of action or a claim which would benefit the Statement of Claim by way of an amendment.
CONSIDERATION
Claim Against the Individual Defendants
[3] There is no allegation against the individual Defendants, who are employees or former employees of Canada Customs and Revenue Agency ("CCRA"), and who were involved in the collection process, that they were on a frolic of their own or acted outside of the scope of their employment. Rather, the Plaintiff concedes and sets out in his Statement of Claim that the individual Defendants "... while acting under the authority of the Minister of National Revenue, relieved the Plaintiff of $9,875.04" in the course of enforcing the assessments and reassessments for the taxation years 1996, 1997 and 1999.
[4] Taking the facts set out in the Statement of Claim as if proven, it is plain, obvious and beyond doubt that there is no cause of action against any of the individual Defendants, either in their own right or as servants of the Crown, who are or were previously employed by the CCRA: as such the action is frivolous and vexatious.
[5] That there is no cause of action is a conclusion of law, perhaps trite law, that there must be at least a suggestion in the Statement of Claim that the actions of the individual Defendants were in themselves tortious, or exhibited interests, acts or conduct separate and apart from the actions of the CCRA, so as to make individual conduct not the conduct of the CCRA, but the conduct of the individuals themselves. The action as against Melissa Kolbe, D. Folstad, Brenda Krell and Kevin J. Ritcey is struck out, without liberty to amend, for there is no scintilla of a cause of action evident against those individuals in the Statement of Claim.
Claim Against Her Majesty the Queen
[6] I now turn to the action against the CCRA, which seems, by the Statement of Claim, first, to rest in part upon all the assessments and reassessments, clearly matters which could and should have been challenged by way of the informal procedure set out in the Income Tax Act and then in the Tax Court of Canada. The Plaintiff's position, in oral argument was initially that he disavowed any challenge of the assessments and reassessments, by way of this Federal Court proceeding, however, subsequently, again during oral submissions, the Plaintiff advised that he was not conceding the correctness or validity of the assessments and reassessments and thus I must consider that aspect in dealing with the Crown's motion to strike out. Second, the action against the Crown rests upon the alleged absence of any valid and enforceable federal tax legislation. Rather, to paraphrase, it is the contention of the Plaintiff that there being no proper Income Tax Act, he must succeed as against the Queen in Right of Canada, at least to the extent of relief from taxation.
[7] Mr. Heckendorn, who acts for himself, clearly did not fully understand his oral presentation or questions related to that presentation. Rather he had a researcher and assistant sitting at the counsel table with him. To take into account both Mr. Heckendorn's lack of familiarity with and understanding of the material and argument and to give him the benefit of any possible doubt, I allowed Mr. Heckendorn full rein to present his case in the manner he chose, save that I refused Mr. Heckendorn's request that his researcher and assistant, Ms. Cridge, be allowed to present part of the argument. I also denied him the ability to pull undisclosed documents from his bag of additional material, for to allow such, during the course of the motion, would have both put Crown counsel at an unfair disadvantage and resulted in the uncontrollable hearing of the motion. I have, as I must, taken Mr. Heckendorn's facts as he has set them out in his Statement of Claim as if proven, except where too far-fetched to be credible and here I do not accept, as if proven, the allegation that the Income Tax Act does not exist.
[8] I have considered the Crown's affidavit material only to the extent that it goes to jurisdiction, or deals with matters said to be frivolous or an abuse of process of the Court, the latter being permissible in that the Defence, in paragraph 15, reserves to the Defendants the ability to argue that the claim is without merit, is an abuse of process and is frivolous.
Claim Against the Queen as to the Assessments and Reassessments
[9] To begin, the test for striking out a pleading is that it must be plain, obvious and beyond reasonable doubt that the claim will not succeed: this of course does not bar a case that is fit to be tried even though it may be complex or novel: see Hunt v. Carey Canada Inc. [1990] 2 S.C.R. 959 at 980.
[10] As I have already observed it is established law that the facts alleged in the Statement of Claim are, unless so far-fetched as to be unbelievable, for the purposes of the motion considered as if proven. Here I would observe that the Statement of Claim confirms that following a Notice of Objection on the part of the Plaintiff, the Minister issued a notice confirming the taxes owing for 1996, 1997 and 1999: that determination has apparently not been appealed to the Tax Court of Canada, which as we will see leads to a jurisdictional point.
[11] The Plaintiff, while not directly arguing the validity of the assessments at this hearing, is not prepared to give up the incorrect assessment argument. Section 152(8) of the Income Tax Act provides that assessments are both valid and binding, subject to being varied, or vacated on objection or on appeal.
[12] The procedures which an objecting taxpayer must follow are set out in sections 165 through 190 of the Income Tax Act and particularly, as to appeals to the Tax Court of Canada, sections 169, 170 and 171. More specifically section 169 provides an appeal to the Tax Court of Canada and section 175 as amended, chapter 7, 42-43 Elizabeth II of 12 May 1994, makes it mandatory that appeals be instituted as set out in the Tax Court of Canada Act. Finally, section 12(1) of the Tax Court of Canada Act gives to the Tax Court of Canada exclusive original jurisdiction to hear and determine references and appeals pursuant to the Income Tax Act where, as here, there are provisions for such a hearing by the Tax Court of Canada under the Income Tax Act. The Court of Appeal points out in MNR v. Parsons [1984] 2 F.C. 331 at 332-333 that there are no exceptions to this specific grant of jurisdiction to the Tax Court of Canada. This is conclusive that jurisdiction to deal with Court challenges of assessments, such as those assessments against the Plaintiff, lies in the Tax Court of Canada, not in the Federal Court. Thus, not only does the Federal Court have no jurisdiction in this instance, but also to plead a cause of action beyond the jurisdiction of the Court is an abuse of process: for example see Weider v. Beco Industries Ltd. [1976] 2 F.C. 739 (F.C.T.D.) at 742. Moreover, such an abuse, arising out of a futile plea and want of jurisdiction, leads to the conclusion that the plea as to the invalidity of the assessments is not only abusive, but also vexatious and frivolous: see Pfizer Canada Inc. v. Apotex Inc. (1999) 172 F.T.R. 81 (F.C.T.D.) at 90. The challenge by the Plaintiff, based on the incorrect assessments is struck out, without leave to amend, and is dismissed, save as to any remedy which the Plaintiff may have in the Tax Court of Canada.
Existence of the Income Tax Act
[13] The Plaintiff, in both his written and oral submissions in opposition to the motion to strike out, made much of what I will call a lack of an enforceable Income Tax Act, although the Statement of Claim makes only three references to this aspect:
20. The Defendants knew, know or ought to know that the Governor General's Throne Speech with respect to income tax revision for the 1948 session of Parliament did not provide for the creation/implementation of the new Income Tax Act.
22. The Defendants knew, know or ought to know that the original Income Tax Act of 1948, ch. 52 was not Royal Assented, nor was it published in the Canadian Gazette.
23. The Defendants knew, know or ought to know that the 1948 ch. 52 Income Tax Act is not in the Archives pursuant to section 54 of the British North American Act, 1867.
[14] While the absence of an enforceable Income Tax Act may seem, at first blush, an attractive proposition, on reflection a solid system of taxation is essential. It provides the sources of income by which the government may, generally, provide what may be called peace, order and good government, but in more contemporary terms, a stable country, economy, society and environment which, together with the proper setting for economic growth, enable most of us to live in comfort, relative to much of the world's population. However, I do not have to justify the Canadian system of taxation, but merely to test whether the Plaintiff's contention of the absence of an enforceable income tax legislation is plainly, obviously and beyond doubt bound to fail.
[15] The thrust of the Plaintiff's Statement of Claim is technical: it is that the Income Tax Act of 1948 was neither gazetted nor given royal assent. Here in written and oral argument the Plaintiff goes on to submit, essentially, that he and his researcher cannot find an official government version, or perhaps a government consolidation, of the Income Tax Act and the commercially published consolidations, such as that published by CCH, are not in any way official versions of the Act. By way of contrast Crown counsel has produced evidence of taxation statutes, including the Income Tax Act of 11-12 George VI, assented to 30 June 1948, together with excerpts, relevant to the present action, from the 5th Supplement of the Revised Statutes of Canada 1985. However also relevant is the law in R. v. Irwin [1926] Ex. C.R. 127 (Ex. C.C.) which sets out the way in which I must take judicial notice of legislation, to which I will turn shortly.
[16] Continuing on from the Income Tax Act provided to me by Crown counsel, produced by the Queen's printer, I must reflect that section 18 of the Canada Evidence Act, R.S.C. 1985 c. 5, requires that I take judicial notice of all acts of Parliament. Section 19 of that Act sets out that every copy of any act of Parliament, published by the Queen's printer, is evidence of the Act and its contents, unless the contrary be shown, which is not the case here. For further material, setting out the origins of the Income Tax Act and the powers of the government see Hoffman v. Canada (1996) 112 F.T.R. 185 (F.C.T.D.).
[17] Further, if an act appears on its face to have been duly passed, it must be assumed by the Court to have been properly passed. It is not open for me to entertain argument that, there being a defect of Parliamentary procedure behind the Act, the Act may be impeached. Here, before turning to the Irwin case (supra), I would refer to the English position set out in Halsbury, vol. 36, Third Edition, 1961, published by Butterworth of London, at page 377, paragraph 559, which is set out, in part, without the footnotes:
559. Legislative Supremacy of Parliament. The legislative authority of the Sovereign in Parliament is supreme. ...
560. Formal Validity of Statutes. The legislative supremacy of Parliament implies not only the inability of the court to question its power to enact any particular statutory provision, ...
... If a bill has been agreed to by both houses of Parliament, and has received royal assent, it cannot be impeached in the courts on the ground that its introduction or passage through Parliament, was attended by any irregularity, or even on the ground that it was procured by fraud.
The relevant Canadian reference reflecting section 560 of Halsbury (supra) is the Irwin case.
[18] In the Irwin case (supra) the defence was that the act in question, the Naturalization Act, was void because it had not been properly introduced into the House of Commons. The relevant portion of Irwin, which I will quote at length, is as follows:
Now there is not a tittle of evidence showing whether or not such recommendation was made before the passing of the Act. But that is of no importance in disposing of this case, because it is no part of the business of the Court in construing a statute to enquire as to whether the legislature in passing it did or did not proceed according to the lex parliamenti.
It is a matter of elementary law that when a statute appears on its face to have been duly passed by a competent legislature, the courts must assume that all things have been rightly done in respect of its passage through the legislature, and cannot entertain any argument that there is a defect of parliamentary procedure lying behind the Act as a matter of fact. It is a case where the maxim Omnia praesumuntur rite esse acta applies with great force and rigour. It is for Parliament, to decide how they will proceed to legislate and it is only the concrete embodiment of such legislation - the statute itself - that the Court is called upon to construe. The doctrine is well expressed by the learned judges in the following excerpts from pertinent cases:
In the case of Commissioners for Income Tax v. Pemsel, [1891] A.C. 531 at p. 549, Lord Halsbury L.C. says:
But I do not think it is competent to any Court to proceed upon the assumption that the legislature has made a mistake. Whatever the real fact may be. I think a Court of Law is bound to proceed upon the assumption that the legislature is an ideal person that does not make mistakes.
In the case of Richards v. McBride, [1881-82] 8 Q.B.D. 119 at p. 122, Grove J. says:
But we cannot assume a mistake in an Act of Parliament. If we did so, we should render many Acts uncertain, by putting different construction on them according to our individual conjectures. The draftsman of this Act may have made a mistake. If so, the remedy is for the legislature to amend it. But we must construe Acts of Parliament as they are, without regard to consequences, except in those cases where the words used are so ambiguous that they may he construed in two senses, and even then we must not regard what happened in Parliament, but look to what is within the four corners of the Act, and to the grievance intended to be remedied, or, in penal statutes, to the offence intended to be corrected.
In Lee v. Bude and Torrington Junction Railway Co., [1871] L.R. 6 C.P. 576 at p. 582, Willes J. says:
It was once said, - I think in Hobart - that, if an Act of Parliament were to create a man judge in his own case, the Court might disregard it. That dictum, however, stands as a warning, rather than an authority to he followed. We sit here as servants of the Queen and the legislature. Are we to act as regents over what is done by Parliament with the consent of the Queen, Lords and Commons? I deny that any such authority exists. If an Act of Parliament has been obtained improperly, it is for the legislature to correct it by repealing it; but, so long as it exists as law, the Courts are bound to obey it. The proceedings here are judicial, not autocratic, which they would be if we could make laws instead of administering them. .... Having neglected to take the proper steps at the proper time to prevent the Art from passing into a law, it is too late now to raise any objections to it.
[pp. 129-130]
Here the key proposition is, as set out by Mr. Justice Audette, above, that "It is a matter of elementary law that when a statute appears on its face to have been duly passed by a competent legislature, the Courts must assume that all things have rightly done in respect of its passage through the legislature, and cannot entertain any argument that there is a defect of Parliamentary procedure lying behind the Act as a matter of fact.". Given all of this, the Income Tax Act, as set out in the Revised Statutes of Canada, referred to above, cannot be impeached by the Courts. Thus the case of the Plaintiff, as to the existence of a valid and enforceable Income Tax Act, is one which plainly, obviously and beyond doubt cannot succeed.
CONCLUSION
[19] The Crown has made its case that the Statement of Claim discloses no reasonable cause of action, is frivolous and vexatious and is an abuse of the process of the Court. It is appropriate that the action, both as against the Crown and as against the individual Defendants, be struck out. There being no scintilla of a cause of action, the striking out is without leave to amend. The action is therefore dismissed. The Defendants may tax one set of costs.
(Sgd.) "John A. Hargrave"
Prothonotary
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-37-05
STYLE OF CAUSE: Paul Heckendorn v. HMTQ ET AL
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: April 18, 2005
REASONS FOR Order : Hargrave, Prothonotary
DATED: June 3, 2005
APPEARANCES:
Mr. Paul Heckendorn FOR PLAINTIFF
Ms. Elizabeth McDonald FOR DEFENDANT
SOLICITORS OF RECORD:
Mr. Paul Heckendorn FOR PLAINTIFF
On his own behalf
Mr. John H. Sims, Q.C. FOR DEFENDANT
Deputy Attorney General for Canada
Department of Justice - Vancouver