Pratte,
J.:—Ms.
Lloyd
and
Ms.
Burns,
we
do
not
need
to
hear
you.
We
are
all
of
opinion
that
this
appeal
must
fail.
The
appellant
Svend
Krag-Hansen
is
the
sole
shareholder
of
the
other
appellant,
Krag-Hansen
Enterprises
Ltd.,
a
company
incorporated
under
the
laws
of
British
Columbia
which,
pursuant
to
a
direction
made
by
the
Minister
of
National
Revenue
under
subsection
247(2)
of
the
Income
Tax
Act
(S.C.
1970-71-72,
c.
63,
as
amended),
was
deemed
to
be
associated
with
certain
other
companies
for
the
taxation
years
1980
and
1981.
Their
appeal
is
directed
against
a
judgment
of
the
Trial
Division
dismissing
an
application
that
they
had
made
pursuant
to
sections
24
and
52
of
the
Canadian
Charter
of
Rights
and
Freedoms
for
an
order
declaring
(1)
that
subsections
247(2)
and
(3)
of
the
Income
Tax
Act
infringe
their
rights
under
the
Charter
and
(2)
that,
as
a
consequence,
the
direction
issued
by
the
Minister
of
National
Revenue
with
respect
to
the
corporate
appellant
is
of
no
effect.
The
contention
of
the
appellants
is
that
the
direction
made
by
the
Minister
pursuant
to
subsection
247(2)
deprived
them
of
their
“right
to
life,
liberty
and
security
of
the
person”
within
the
meaning
of
section
7
of
the
Charter
and
was
not
made
in
accordance
with
the
principles
of
fundamental
justice.
According
to
the
appellants,
the
Minister's
directive,
as
well
as
the
statutory
provisions
under
which
it
was
made,
violate
those
principles
of
fundamental
justice
in
two
respects:
(1)
in
that
paragraph
247(2)(a)
is
so
vague
and
uncertain
that
it
cannot
be
regarded
as
law,
and
(2)
in
that,
under
subsection
247(3),
the
taxpayer
appealing
from
an
assessment
made
pursuant
to
a
direction
of
the
Minister
may
contest
only
part
of
that
direction.
In
order
to
dispose
of
those
contentions,
it
is
not
necessary
to
rule
on
the
appellant's
contention
that
the
obligation
to
pay
income
tax
at
a
higher
rate
infringes
on
a
taxpayer's
liberty
within
the
meaning
of
section
7
of
the
Charter,
nor
is
it
necessary
to
decide
whether
certainty
of
the
law
is
a
necessary
ingredient
of
fundamental
justice.
Indeed,
even
if
those
two
questions
were
resolved
in
the
appellant’s
favour,
their
appeal
should
still
be
dismissed
since,
in
our
opinion,
paragraph
247(2)(a)
is
not
vague
and
subsection
247(3)
affords
the
taxpayer
a
full
opportunity
to
contest
the
whole
of
the
Minister's
decision.
The
appellants’
submission
on
the
vagueness
of
paragraph
247(2)(a)
is
based
on
their
interpretation
of
that
provision
according
to
which
the
Min-
ister
has
to
determine
whether
the
separate
existence
of
the
corporations
was
for
the
purpose
of
carrying
out
business
in
a
manner
that
the
Minister
himself
considers
to
be
the
most
effective.
That
interpretation
is
wrong.
Under
that
paragraph,
the
Minister
must
determine
whether
those
who
were
responsible
for
the
separate
existence
of
the
corporations
had,
as
their
sole
purpose,
the
intention
that
the
business
of
the
corporations
be
carried
out
in
what
they
considered
to
be
the
most
effective
manner.
If
paragraph
247(2)(a)
is
given
that
interpretation,
it
cannot
be
said
to
be
vague
or
uncertain.
As
to
the
appellants’
contention
that
the
right
of
appeal
under
subsection
247(3)
does
not
enable
the
taxpayer
to
fully
challenge
the
direction
of
the
Minister,
it
is
based
on
a
misinterpretation
of
subsection
247(2).
Indeed,
the
appellants
construe
that
subsection
as
requiring
the
Minister
to
base
his
directive
on
two
distinct
determinations:
first,
the
Minister
would
have
to
satisfy
himself,
as
required
by
paragraph
247(2)(a),
that
the
separate
existence
of
the
corporation
is
not
solely
for
the
purpose
of
carrying
out
the
business
of
the
corporation
in
the
most
effective
manner,
and,
second,
he
would
have
to
satisfy
himself,
as
required
by
paragraph
247(2)(b)
that
one
of
the
main
reasons
for
the
separate
existence
of
the
corporation
is
to
reduce
the
amount
of
taxes
payable
under
the
Act.
In
our
opinion,
the
two
paragraphs
of
subsection
247(2)
require
the
Minister
to
make
what
is
in
substance
only
one
determination,
namely
that
the
existence
of
the
various
corporations
is
not
solely
for
the
purpose
of
carrying
out
business
in
the
most
effective
manner
because
one
of
the
main
reasons
for
the
existence
of
separate
corporations
is
to
reduce
the
amount
of
tax
payable
under
the
Act.
For
those
reasons,
the
appeal
will
be
dismissed
with
costs.
Before
parting
with
this
matter,
we
wish
to
mention
that
the
manner
in
which
the
proceedings
were
commenced
in
the
Trial
Division
has
not
escaped
our
attention.
Normally,
under
the
Rules,
a
proceeding
for
declaratory
relief
under
section
18
of
the
Act
must
be
brought
by
way
of
an
action
rather
than
by
way
of
a
motion
(see
Rule
603).
In
view
of
our
conclusion,
it
is
not
necessary
for
us
to
determine
whether
that
requirement
applies
to
a
proceeding
made
under
section
24
of
the
Charter.
Appeal
dismissed.
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