Date: 19980331
Docket: T-2836-94
IN RE: The Excise Tax Act
BETWEEN:
KEN STEPHAN WILLIAM FEGOL
Plaintiff
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY
THE MINISTER OF NATIONAL REVENUE
Defendant
REASONS FOR JUDGMENT
CAMPBELL J.
[1] The primary issue in this case is limited to whether Mr. Fegol can take advantage of a "farm equipment" exemption to obtain relief from a seizure which took place on July 15, 1994 for the purpose of offsetting an outstanding tax debt. Mr. Fegol was unrepresented at the trial and the respondent was represented by counsel, Mr. Fraser. Both did a capable job.
[2] The seizure occurred on the execution of a writ of fieri facias dated April 27, 1995. But for the estimates of value recited, it is not contested that the following equipment detailed in paragraph 6 of the statement of claim was seized:
| 6. Pursuant to the writ of fieri facias, the plaintiff's farm machinery which was seized is as follows: |
| 1) one - F500 Ford Platform truck estimated value of $7,500.00 with attached tree digger, estimated value of $20,000.00, license number CT59314, serial number F50CCW62537, estimated total value of which is $27,500.00; |
| 2) one - 1968 GMC truck tractor, serial number TM7120P106763, license number 314 FHD, estimated value of which is $5,000.00, and also a hydraulic tree digger with hitch, estimated value of which is $40,000.00 but the replacement value is $65,000.00; and, |
| 3) one - 1970 Chev truck, license number 975 FGD, serial number CE630P123248, value of which is $3,000.00. |
| Following the seizure, the equipment was sold for $16,350, and after the deduction of necessary expenses, the Minister of National Revenue was paid $8,014.03. |
| A. Sufficiency of notice |
[3] Mr. Fegol has argued that he was not given sufficient notice of the sale of the seized equipment. The Executions Act of Manitoba [R.S.M. 1987, c.E160] is the legislation in which the seizure, sale, and exemption provisions are found. On the notice issue, s.16(2) reads as follows:
| 16.2 No sheriff or bailiff, or other officer shall sell any effects under a writ of execution until he has, previously thereto, given at least eight days' public notice in writing of the time and place of sale in at least three public places in the municipality where the effects have been taken in execution. |
[4] Two questions which arise on the notice issue are: was "at least eight days" notice given?; and was the notice "public notice" in that it was posted in "three public places in the municipality" where the effects were seized? On both questions I accept the evidence of the sheriff responsible for giving notice that the notice announcing a sale on "Friday the 30th day of September 1994 at Hi-Way Towing, 6 Nicholas Avenue, Winnipeg, MB at the hour of 10:00 A.M." was posted on September 23, 1994 in the Woodsworth, Law Courts and Norquay buildings in Winnipeg. The sale did take place at 10:00 a.m. on September 30, 1994.
1. Was "at least eight days notice"given?
[5] Since the Executions Act is silent on the meaning to be given to the phrase "at least eight days notice", the governing provision is found in the Manitoba Interpretation Act R.S.M. 1987, c.180 as follows:
| 19(1) In an enactment, |
| (l) where a period of time dating from a given day, act, or event is prescribed or allowed for any purpose, the time shall, unless the contrary intention appears, be reckoned exclusively of such day or of the day of such act or event; |
[6] Thus, this provision requires that at least the day of the posting of the notice be excluded from the calculation. It is a reasonable conclusion to draw, however, that the use of the words "at least" in the Executions Act shows "a contrary intention" to apply another caluculation. In this event, the federal Interpretation Act R.S., c. I-23 is of assistance in clearly defining what is meant by the phrase "at least" as follows:
| 27(1) Where there is a reference to a number of clear days or "at least" a number of days between two events, in calculating that number of days the days on which the events happen are excluded. |
[7] On the evidence, even taken on the Manitoba Interpretation Act calculation, with the notice being posted on September 23rd and the sale occuring on September 30th, and excluding the day of posting, only 7 days notice was given. Taken on the federal Interpretation Act calculation, only 6 days notice was given. Either way, I find that insufficient notice was given.
2. Was "public notice"given?
[8] As to "public notice", the sheriff's evidence is that the notice as posted in Winnipeg constitutes compliance with this requirement because Winnipeg is in the same judicial district as the location where the goods were seized. Mr. Fegol's goods were seized from what is termed the "river property" which is in rural Manitoba, certainly not within the city of Winnipeg.
[9] I find the word "municipality" as used in s.16(2) must be taken to mean the location where the legal action relating to the seizure would be expected to occur. The evidence is that the centre of legal action was the Winnipeg Law Courts. The evidence of the sheriff was that 3 copies of the Notice were posted in The Law Courts Building, as well as a copy being posted in the 2 other buildings mentioned. Accordingly, I find that "public notice" was given.
B. Exemption from seizure
[10] The primary issue in this case is centred on the meaning of the provisions of s.23(1)(e) of the Executions Act which reads as follows:
23(1) Except as otherwise by any Act provided, the following personal estate is hereby declared free from seizure by virtue of all writs of execution issued by any court in the province, namely:
...
(e) in the case of a judgement debtor who is a farmer,
| (I) all farm machinery, dairy utensils and farm equipment reasonably necessary for the proper and efficient conduct of his agricultural operations for the next ensuing 12 months, and |
| (ii) one motor vehicle, if required for the purposes of his agricultural operations; |
...
[11] The questions to be answered have been responsibly and properly focussed by Mr. Fraser, who, in argument, agreed that the evidence proves that at the time of the seizure, within the meaning of this provision, Mr. Fegol was a "farmer", the equipment seized was "farm equipment", and the 12 month provision starts to run from the date of seizure being July 7, 1994. Therefore, the only contested issue is whether the equipment was "reasonably necessary for the proper and efficient conduct of [Mr. Fegol's] agricultural operation" for the 12 months following the seizure.1
[12] The Respondent has argued that to qualify for the exemption, Mr. Fegol's agricultural operation would have to have been viable on the date of the seizure; that is, since the operation was not active, it was not viable.
[13] I find that the words of s.23(1) of the Executions Act do not impose such a restrictive interpretation. The dictionary meaning of the noun "operation" used in this context includes "the condition of functioning or being active" and "the power to operate or produce effects; efficacy, force".2 Thus, I find potential is an important factor to consider.
[14] The evidence proves that, beginning in 1970, Mr. Fegol's "agricultural operation" of tree farming was very active and productive, with Mr. Fegol's high level of skill and ability going into the acquisition, storage, and sale of trees for landscaping purposes. However, during at least the six months of 1994 leading up to the time of the seizure, the business had fallen dormant because of the land foreclosure and debt pressures severely affecting Mr. Fegol's productivity.
[15] However, at the time of the seizure, the evidence also proves that Mr. Fegol owned and had the right to remove for sale some 2200 trees on 2 pieces of his brother's property. There is no precise way of telling whether Mr. Fegol would have been able to generate orders for the sale of his trees after the July 1994 seizure, but according to his evidence, he was very hopeful that the business could be productive between July 1994 and July 1995. Mr. Fegol is a well educated, capable, hard working and productive person. On the evidence, I have no doubt he would have tried his absolute best to market his trees within the 12 months following the seizure.
[16] Therefore, I put weight on Mr. Fegol's evidence that the equipment was absolutely necessary to carry out his well proven agriculture operation potential during this period, and, therefore, I find in his favour on this issue. Accordingly, I find he has successfully proved his claim in this action.
C. Relief
[17] In bringing this action, Mr. Fegol originally claimed against a Deputy Sheriff of the Province of Manitoba as responsible for an unlawful seizure of his equipment, but this claim was struck out prior to trial for want of jurisdiction. Nevertheless, insufficient notice remained an issue for trial.
[18] Because Mr. Fegol has proved this element of his claim, he has a legitimate and strong cause of action against those responsible for the seizure and sale. The problem remains, however, that even though wrongful seizure has been proved, I do not have jurisdiction to provide the relief to which he is entitled.
[19] I find that the most I can do is order the re-imbursement of the money paid to Revenue Canada, being the sum of $8,014.03. Accordingly, I direct that this amount be paid by cash, certified cheque or money order directly to Mr. Fegol forthwith.
[20] I award Mr. Fegol costs of this action in Tariff B, Column V.
Judge
OTTAWA, ONTARIO
__________________1 This interpretation of the Executions Act is consistent with the decision rendered by the Court of Queen's Bench of Manitoba respecting foreclosure on Mr. Fegol's land. (Fegol v. Tilley (N.M.) Realty Ltd., (1995), 99 Man. R. (2nd) 41; upheld by the Manitoba Court of Appeal (1995), 107 Man. R. (2nd) 75; applicaton for reconsideration dismissed by the Supreme Court of Canada, February 26, 1998). In that decision the questions were whether under the Manitoba Family Farm Protection Act, S.M. 1896-87, c.6; C.C.S.M., c. F-15, the growing of trees and shrubs for the purpose of a landscape garden business is the production of "agricultural produce grown on a commercial basis", and whether between 1991 and 1993 the foreclosed land was used for this purpose. In giving an affirmative answer to the first question, Shulman J. concluded that the Manitoba Legislature intended to give a broad interpretation to the phrase "commercial crop production" and, therefore, found the growing of a crop of trees on a commercial basis constitutes farming within the meaning of the statute. On the second question, however, he found that during the years in question that the growing that took place on the foreclosed land was not primarily on a commercial basis but more for display.
2 The New Shorter Oxford English Dictionary, 1993.