Le
Dain,
J:—This
is
an
appeal
from
a
judgment
of
the
Trial
Division
declaring
the
respondent
companies
to
be
entitled
to
refunds
of
sales
tax
under
subsection
44(2)
of
the
Excise
Tax
Act,
RSC
1970,
c
E-13.
Subsection
44(2),
as
it
read
during
the
relevant
period
for
purposes
of
the
claims
in
this
case,
is
as
follows:
44.(2)
Where
goods
have
been
purchased
by
Her
Majesty
in
right
of
any
province
of
Canada
for
any
purpose
other
than
(a)
resale;
(b)
use
by
any
board,
commission,
railway,
public
utility,
university,
manufactory,
company
or
agency
owned,
controlled
or
operated
by
the
government
of
the
province
or
under
the
authority
of
the
legislature
or
the
lieutenant
governor
in
council;
or
(c)
use
by
Her
Majesty
or
by
Her
agents
or
servants
in
connection
with
the
manufacture
or
production
of
goods
or
use
for
other
commercial
or
mercantile
purposes;
a
refund
of
taxes
paid
under
Part
III,
IV
or
V
may
be
granted
to
Her
Majesty
or
to
the
manufacturer,
producer,
wholesaler,
jobber
or
other
dealer
as
the
case
may
require.
Each
of
the
respondent
companies
entered
into
contracts
during
the
years
1969
to
1972
with
the
Minister
of
Highways,
acting
on
behalf
of
Her
Majesty
in
right
of
the
province
of
British
Columbia,
to
carry
out
certain
works
of
construction,
modification
or
repair
to
ferry
terminals
at
various
places
in
the
province.
In
carrying
out
these
contracts
the
respondents
purchased
materials
which
were
integrated
or
otherwise
consumed
in
the
completed
works.
The
federal
sales
tax
on
the
materials
was
paid
by
the
predecessors
in
title
of
the
respondents
but
was
included
in
the
price
to
the
respondents
and
was
ultimately
borne
by
them.
it
was
a
condition
of
the
contracts
with
the
provincial
government
that
the
federal
sales
tax
should
not
be
included
in
the
cost
of
the
work
to
the
Department
of
Highways.
The
respondents
and
was
ultimately
borne
by
them.
It
was
a
condition
of
the
cise
Tax
Act
but
it
was
refused.
They
then
brought
an
action
against
the
appellant
praying
for
a
declaration
that
they
were
entitled
to
refund.
Judgment
was
awarded
in
their
favour
by
the
Trial
Division.
The
appeal
is
from
that
judgment.
The
amounts
of
refund
to
be
made,
if
the
respondents
satisfy
the
conditions
of
subsection
44(2),
are
not
in
dispute.
They
are
as
follows:
Stevenson
Construction
Co
Ltd—$8,136.14;
Burdett
Construction
Co
Ltd—$11,439.34;
Mott
Electric
Limited—$7,190.63;
Fraser
River
Pile
Driving
Company
Limited—$12,307.45;
Greenlees
Piledriving
Company
Limited—$368.94.
The
appellant’s
contentions
may
be
summarized
as
follows:
1.
The
goods
were
not
purchased
by
Her
Majesty
in
right
of
the
province
of
British
Columbia
within
the
meaning
of
subsection
44(2).
2.
The
gods,
if
purchased
by
Her
Majesty
in
right
of
the
province,
were
purchased
for
use
by
a
public
utility
within
the
meaning
of
subsection
44(2).
3.
The
goods,
if
purchased
by
Her
Majesty
in
right
of
the
province,
were
purchased
for
use
for
commercial
or
mercantile
purposes
within
the
meaning
of
subsection
44(2).
4.
The
respondents
did
not
pay
the
tax
and
are
for
this
reason
not
entitled
to
a
refund.
5.
The
respondents
were
not
the
manufacturer,
producer,
wholesaler,
jobber
or
other
dealer
of
the
goods
within
the
meaning
of
subsection
44(2).
With
respect
to
the
first
point,
the
learned
trial
judge
applied
the
decision
of
the
Supreme
Court
of
Canada
in
The
King
v
Dominion
Bridge
Company
Limited,
[1940]
SCR
487;
[1940-41]
CTC
99;
1
DTC
499-114,
in
concluding
that
the
goods
were
purchased
by
Her
Majesty
the
Queen
in
right
of
the
province
within
the
meaning
of
subsection
44(2).
The
Dominion
Bridge
case
involved
a
contract
for
the
erection
of
the
superstructure
of
a
bridge.
The
members
of
the
superstructure
had
been
produced
by
the
company
which
erected
it.
The
Supreme
Court
held
that
while
the
contract
could
not
be
said
“in
the
ordinary
sense
of
the
words”
to
be
a
contract
for
the
sale
of
the
superstructure
or
its
members,
it
was
deemed
to
be
a
sale
by
paragraph
87(1
)(d)
of
the
Special
War
Revenue
Act,
RSC
1927,
c
179,
which
read
as
follows:
87.(1)
Whenever
goods
are
manufactured
or
produced
in
Canada
under
such
circumstances
or
conditions
as
render
it
difficult
to
determine
the
value
thereof
for
the
consumption
or
sales
tax
because
(d)
such
goods
are
for
use
by
the
manufacturer
or
producer
and
not
for
sale;
the
Minister
may
determine
the
value
for
the
tax
under
this
Act
and
all
such
transactions
shall
for
the
purposes
of
this
Act
be
regarded
as
sales.
The
trial
judge
concluded
that
the
present
case
was
indistinguishable
from
the
Dominion
Bridge
case
because
of
the
terms
of
paragraph
28(1
)(d)
of
the
Excise
Tax
Act,
which
reads
as
follows:
28.(1)
Whenever
goods
are
manufactured
or
produced
in
Canada
under
such
circumstances
or
conditions
as
render
it
difficult
to
determine
the
value
thereof
for
the
consumption
or
sales
tax
because
(d)
such
goods
are
for
use
by
the
manufacturer
or
producer
and
not
for
sale;
the
Minister
may
determine
the
value
for
the
tax
under
this
Act
and
all
such
transactions
shall
for
the
purposes
of
this
Act
be
regarded
as
sales.
The
appellant
contends
that
the
goods
in
this
case—the
materials
that
were
incorporated
or
consumed
in
the
work
that
was
contracted
for—were
not
manufactured
or
produced
by
the
respondents
within
the
meaning
of
paragraph
28(1
)(d).
The
appellant
stresses
the
fact
that,
unlike
the
Dominion
Bridge
case
where
the
company
produced
the
members
of
the
bridge’s
superstructure,
the
materials
or
goods
in
this
case
were
purchased
by
the
respondents,
who
could
not
therefore
be
held
to
have
manufactured
or
produced
them.
The
trial
judge’s
reference
to
paragraph
28(1)(d)
appears
necessarily
to
have
involved
an
assumption
that
the
respondents
had
produced
the
goods
within
the
meaning
of
that
section,
and
in
fact
he
held
with
reference
to
the
fifth
contention
indicated
above
that
the
respondents
were
producers
of
the
goods
within
the
meaning
of
subsection
44(2).
While
I
have
some
reservations
concerning
this
view,
to
which
I
shall
refer
later,
I
think
the
conclusion
with
respect
to
the
first
contention
can
be
independently
supported
by
what
was
said
by
Duff,
CJ
in
the
Dominion
Bridge
case
with
reference
to
the
application
of
s
105
of
the
Special
War
Revenue
Act,
which
read
as
follows:
105.
A
refund
of
the
amount
of
the
taxes
paid
under
Parts
X,
XI,
XII
and
XIII
of
this
Act
may
be
granted
to
a
manufacturer,
producer,
wholesaler,
jobber
or
other
dealer
on
goods
sold
to
His
Majesty
in
the
right
of
the
Government
of
any
province
of
Canada,
if
the
said
goods
are
purchased
by
His
Majesty,
for
any
purpose
other
than
purposes
of
resale
or
of
any
railway,
commission,
board
or
public
utility
which
is
operated
by
or
under
the
authority
of
the
Legislature
or
the
Lieutenant-
Governor
in
Council
of
the
province.
After
holding
that
the
use
of
the
goods
by
the
producer
was
liable
to
sales
tax
as
a
deemed
sale
under
paragraph
87(1)(d)
of
the
Act,
Duff,
CJ
turned
to
the
question
of
whether
it
was
a
sale
to
His
Majesty
in
right
of
the
province
within
the
meaning
of
section
105
of
the
Act.
He
said
at
490:
The
question
to
be
decided
is
not
without
difficulty.
I
have
come
to
the
conclusion
that
“goods”
are
“sold”
within
the
meaning
of
this
section
when
there
is
a
sale
that
is
such
solely
by
force
of
the
statutory
declaration
that
it
shall
be
deemed
to
be
a
sale
for
the
purposes
of
the
statute.
Section
105
is
part
of
the
statute
and
transactions
within
the
declaration
are,
therefore,
deemed
to
be
sales
for
the
purposes
of
the
section.
A
transaction
within
subsection
87(2),
for
example,
would,
if
the
other
conditions
were
fulfilled,
be
a
sale
within
section
105.
Mr
Varcoe’s
argument
is
that
here,
while
the
transaction
(the
production
of
the
goods
in
question
for
the
use
of
the
producer
in
fulfilling
this
contract)
is
deemed
to
be
a
sale
by
force
of
the
statute,
the
goods
produced
are
not
“sold”
to
the
provincial
government.
This
argument
has
force
and
I
have
given
it
attentive
consideration.
The
“use”
of
these
goods
for
the
purposes
of
the
respondent
in
fulfilling
the
contract
involves
a
translation
of
the
property
in
them
to
the
provincial
government
by
force
of
the
contract
under
which
the
entire
consideration
for
the
whole
work
is
payable
by
the
provincial
government
to
the
respondents.
Our
duty,
as
Lord
Hailsham
said
in
Dominion
Press
v
Minister
of
Customs,
[1928]
AC
340
at
342,
is
to
ascertain
whether
the
goods
are
“sold”
to
the
provincial
government
within
the
meaning
of
those
words
as
employed
in
the
statute.
I
think,
in
view
of
the
fact
mentioned,
that
the
“transaction”
involves
translation
of
the
property
in
the
goods
to
the
provincial
government,
the
proper
view,
when
the
provisions
of
sections
86
and
87
are
taken
into
account
as
a
whole,
is
that
it
falls
within
section
105.
The
meaning
of
this
passage,
as
I
read
it,
is
that
having
regard
to
the
legislative
intention
disclosed
by
the
deeming
provision,
a
broad
view
is
to
be
taken
of
the
word
“sold”
in
the
refund
provision,
or
the
word
“purchased”
in
the
corresponding
provision
in
section
44(2)
of
the
Excise
Tax
Act,
and
that
it
is
to
include
any
transaction
which
effects
a
translation
of
the
property
in
the
goods
to
the
provincial
government.
As
was
said
by
Lord
Hailsham,
LC
in
the
Dominion
Press
case,
to
which
reference
was
made
by
Duff,
CJ,
the
issue
is
not
to
turn
on
the
common
law
distinction
between
a
contract
for
sale
and
a
contract
for
work
and
labour,
but
on
what
meaning
should
be
given
to
the
word
“purchased”
in
the
light
of
the
statute
as
a
whole.
In
other
words,
the
question
is
whether
it
is
reasonable
to
conclude
that
by
the
word
“purchased”
Parliament
contemplated
any
transaction
which
effects
a
translation
of
property.
As
a
matter
of
result,
it
would
be
quite
illogical,
I
think,
that
a
person
should
fall
within
the
conditions
for
refund
if
he
was
the
original
manufacturer
or
producer
of
the
goods
that
were
incorporated
or
consumed
in
the
work
contracted
for
by
the
provincial
government
but
not
if
he
purchased
them.
In
both
cases
sales
tax
has
been
paid
on
the
goods,
and
the
nature
of
the
transaction
which
entitles
the
person
who
bears
the
tax
to
a
refund
is
identical.
There
is
no
doubt
that
the
effect
of
the
contract
in
the
present
case
was
to
translate
the
property
in
the
goods
to
the
provincial
Crown.
This
is
the
effect
of
the
contract
by
its
very
nature,
but
in
any
event
the
contract
makes
express
provision
to
this
effect
in
clause
13
of
the
standard
form
of
contract
used
in
this
case,
which
reads
as
follows:
13.
All
materials
provided
by
the
Contractor
in
connection
with
the
work
shall
become,
from
the
time
of
their
being
so
provided
until
the
final
acceptance
of
the
work,
the
property
of
the
Minister
for
the
purposes
of
said
works,
and
the
same
shall
on
no
account
be
taken
away
or
used
or
dispensed
with,
except
for
the
purposes
of
said
works,
without
the
consent
in
writing
of
the
Engineer.
The
Minister
shall
not
be
answerable
for
any
loss
or
damage
whatsoever
in
respect
of
such
materials:
Provided,
however,
that
the
materials
shall
be
delivered
up
to
the
Contractor
upon
the
completion
of
the
works
and
upon
payment
by
the
Contractor
of
all
money,
costs
and
damages
(if
any)
as
shall
be
due
or
chargeable
from
or
against
the
Contractor
under
this
contract.
Accordingly,
I
agree
with
the
conclusion
of
the
Trial
Division
that
the
goods
were
purchased
by
Her
Majesty
in
right
of
the
province
within
the
meaning
of
subsection
44(2).
I
turn
now
to
the
second
point—whether
the
goods
were
purchased
for
the
use
of
a
public
utility
within
the
meaning
of
subsection
44(2).
The
ferry
system
operated
by
the
Government
of
the
Province
of
British
Columbia
has
been
placed
under
various
jurisdictions
in
the
course
of
its
history.
For
as
time
it
was
owned
and
operated
by
a
Crown
agency
known
at
first
as
the
Toll
Highways
and
Bridges
Authority
and
later
as
the
British
Columbia
Ferry
Authority.
See
Toll
Highways
and
Bridges
Authority
Act,
SBC
1953
(2nd
Sess)
c
37,
which
became
the
British
Columbia
Ferry
Authority
Act,
by
SBC
1964,
c
57.
In
1968
the
government
ferry
system
was
vested
in
the
Crown
and
brought
under
the
jurisdiction
of
the
Department
of
Highways
by
the
British
Columbia
Ferry
Authority
(Vesting)
Act,
1968,
SBC
1968,
c
1.
This
was
its
status
during
the
period
that
is
material
for
purposes
of
this
appeal.
Section
2
of
the
Public
Utilities
Act,
RSBC
1960,
c
323,
(repealed
by
the
Energy
Act,
SBC
1973,
c
29,
section
187)
defined
“public
utility”
to
include
‘‘a
person
.
.
.
who
owns
or
operates
in
the
Province
equipment
or
facilities
for
.
.
.
the
transportation
of
persons
or
property
by
.
.
.
ferry
for
the
public
for
compensation”.
Section
35
of
the
Toll
Highways
and
Bridges
Act
(which
became
section
37
of
the
British
Columbia
Ferry
Authority
Act)
provided
that
the
authority
established
by
that
act
was
not
to
be
deemed
to
be
a
public
utility
within
the
meaning
of
the
Public
Utilities
Act.
This
provision
was
repealed
by
section
8
of
the
British
Columbia
Ferry
Authority
(Vesting)
Act.
In
my
opinion
the
definition
of
“public
utility”
in
the
Public
Utilities
Act
would
have
no
application
to
the
Crown
or
the
Department
of
Highways.
Under
both
the
Toll
Highways
and
Bridges
Authority
Act
and
the
British
Columbia
Ferry
Authority
Act
“toll-highway”
was
defined
to
include
“ferries,
ferry
landings
and
approaches”,
and
throughout
the
period
that
is
relevant
for
purposes
of
this
appeal,
“highway”
was
defined
by
the
Highway
Act,
RSBC
1960,
c
172,
section
2
as
follows:
“highway”
includes
all
public
streets,
roads,
ways,
trails,
lanes,
bridges,
trestles,
ferry
landings
and
approaches,
and
any
other
public
way.
Section
4
of
the
Department
of
Highways
Act,
RSBC
1960,
c
103,
as
amended
by
1968
Stat
BC
c
1,
section
7,
provided:
4.
The
Department
of
Highways
has
charge
of
all
matters
relating
to
the
operation
of
Government
ferries
and
ferry-landings,
and
the
construction,
alteration,
and
repair
of
all
Government
roads,
bridges,
ferry-landings,
wharves,
and
other
Provincial
public
works
throughout
the
Province
to
which
the
Highway
Act
applies.
The
Trial
Judge
concluded
from
this
history
and
these
statutory
provisions
that
the
ferry
terminals
or
landings
on
which
the
work
was
done
in
this
case
were
at
all
relevant
times
part
of
the
provincial
highway
system
under
the
jurisdiction
of
the
Department
of
Highways,
and
as
such
could
not
be
considered
to
be
a
public
utility
within
the
meaning
of
subsection
44(2)
of
the
Excise
Tax
Act.
I
agree
with
this
conclusion.
Even
if
one
looks
at
the
ferry
system
as
a
whole,
I
think
that
what
paragraph
(a)
of
subsection
44(2)
contemplates
by
a
public
utility
is
an
enterprise
that
is
separate
from
the
government’s
departmental
structure.
There
appears
to
be
no
doubt
that
departmental
purchases
for
other
aspects
of
the
highway
system
would
qualify
for
refund.
I
can
see
no
reason
why
purchases
for
ferry
terminals
or
landings,
which
clearly
form
part
of
the
highway
system,
should
not
do
so
as
well.
With
respect
to
the
third
point—whether
the
goods,
if
purchased
by
Her
Majesty
in
right
of
the
province,
were
purchased
for
use
for
commercial
or
mercantile
purposes
within
the
meaning
os
subsection
44(2)—the
trial
judge
held
that
the
evidence
showed
the
intention
was
to
operate
the
government
ferry
system
not
as
a
business
for
profit
but
as
a
public
service
on
which
as
a
matter
of
fact
the
government
had
suffered
substantial
loss
during
the
period
in
question.
I
agree
with
that
conclusion
and
have
nothing
to
add
to
the
reasons
in
support
of
it.
With
respect
to
the
fourth
point—whether
the
respondents
do
not
qualify
for
a
refund
because
they
did
not
initially
pay
the
tax—I
agree
with
the
conclusion
of
the
Trial
Judge
that
subsection
44(2)
does
not
impose
as
a
condition
of
refund
that
the
person
who
seeks
the
refund
must
have
paid
the
tax
initially,
but
rather
contemplates
that
a
refund
may
be
made
to
one
to
whom
the
tax
has
been
passed
on.
This,
I
think,
is
indicated
by
the
words
“as
the
case
may
require”
in
subsection
44(2).
With
respect
to
the
fifth
point—whether
the
respondents
were
the
manufacturer,
producer,
wholesaler,
jobber
or
other
dealer
of
the
goods
within
the
meaning
of
subsection
44(2)—the
trial
judge
held
that
the
words
“manufacturer”
and
“producer”
in
subsection
44(2)
should
be
given
a
broad
construction.
He
referred
to
several
decisions
of
the
Supreme
Court
of
Canada,
in
particular,
The
Queen
v
York
Marble,
Tile
and
Terrazzo
Ltd,
[1968]
SCR
140;
[1968]
CTC
44;
68
DTC
5001,
in
which
the
Court
held
that
the
work
done
on
raw
marble
slabs
was
such
as
to
constitute
the
manufacture
or
production
of
the
finished
marble
pieces.
The
trial
judge
concluded
that
the
work
done
on
the
ferry
terminals
involved
production,
presumably
of
the
materials
for
which
sales
tax
had
been
paid
and
which
had
been
incorporated
or
consumed
in
the
work.
I
would
question
whether,
on
the
record,
the
reasoning
that
is
reflected
in
the
York
Marble
case
is
applicable
to
the
goods
in
question
in
the
present
case.
There
is
really
nothing
to
suggest
that
the
materials
were
altered
in
a
comparable
manner
in
the
present
case
so
as
to
be
a
new
product.
The
materials
were
certainly
used
but
so
as
to
become
part
of
real
property.
But
the
word
“dealer”
in
subsection
44(2)
appears
to
me
to
be
broad
enough
in
that
particular
context
to
include
persons
who
have
dealt
with
the
goods
in
the
manner
of
the
respondents.
The
purpose
of
the
description
of
the
persons
to
whom
a
refund
may
be
made
is
not
so
much
to
limit
such
persons
to
specific
categories
but
to
encompass
anyone
who
has
borne
the
ultimate
burden
of
the
tax
in
dealing
with
the
goods.
For
these
reasons
I
agree
with
the
learned
trial
judge
that
the
respondents
satisfy
the
conditions
for
a
refund
under
subsection
44(2).
There
remains,
however,
a
further
question
which
the
Court
raised
at
the
conclusion
of
argument
and
on
which
it
called
for
supplementary
memoranda—whether
the
Court
may
grant
a
declaration
that
the
respondents
are
entitled
to
a
refund
or
merely
a
declaration
that
the
respondents
are
persons
to
whom
the
federal
Crown
may
grant
a
refund
under
subsection
44(2).
The
question
is
whether
upon
fulfilment
of
the
conditions
in
subsection
44(2)
a
person
becomes
entitled
to
a
refund
as
a
matter
of
right
or
whether
it
remains
a
matter
of
discretion.
This
question
was
referred
to
by
the
learned
trial
judge
in
his
reasons
for
judgment
as
follows:
I
raised
in
argument
a
point
that
had
troubled
me.
Assuming
all
of
the
above
contentions
to
be
correct,
is
an
enforceable
cause
of
action
conferred
by
s
44,
on
the
plaintiffs
against
the
Crown?
Counsel
for
the
Crown
assured
me
that
the
point,
if
it
had
any
validity,
was
not
being
taken
in
this
action.
He
undertook,
as
well,
that
the
point
would
not
be
pursued
in
any
appeals.
Accordingly,
no
argument
was
submitted
on
the
question.
In
a
footnote
to
this
passage
the
trial
judge
indicated
what
his
own
opinion
on
this
question
might
be
as
follows:
Speaking
for
myself,
and
without
benefit
of
legal
argument,
I
have
serious
doubts
that
there
is
a
right
to
sue
for
deductions
from,
or
refunds
of,
“taxes
imposed”
by
the
statute
(ss
44(1);
or
a
right
to
sue
for
refunds
of
“taxes
paid”
under
Parts
III,
IV,
and
V
(ss
44(2)).
At
first
blush,
the
granting
of
deductions
or
refunds,
and
to
whom,
seems
to
be
a
matter
of
Ministerial
discretion;
no
right
to
sue,
by
anyone,
is
contemplated.
In
accordance
with
this
understanding
the
point
was
not
raised
by
counsel
in
their
memoranda
of
fact
and
law
or
in
the
oral
argument
in
this
Court
but
at
the
conclusion
of
argument
the
Court
called
for
the
submission
of
written
argument
on
the
point.
The
parties
filed
supplementary
memoranda
in
which
the
Crown
contends
that
a
refund
is
a
matter
of
discretion,
and
the
respondents
contend
that
upon
fulfilment
of
the
conditions
in
subsection
44(2)
it
is
a
matter
of
right.
The
Court
raised
this
question
of
its
own
motion
because
of
the
view
expressed
in
certain
cases
that
the
Court
should
not
find
the
Crown
liable
on
the
basis
of
consent
unless
it
is
satisfied
that
on
the
facts
and
law
the
Crown
is
liable.
To
do
otherwise
would
be
to
circumvent
the
constitutional
principle
by
which
Parliament
controls
the
expenditure
of
public
funds.
See
The
King
v
Hooper,
[1942]
Ex
CR
193;
Galway
v
MNR,
[1974]
FC
600,
[1974]
CTC
454;
74
DTC
6355;
Northrop
Corp
v
The
Queen
et
al,
[1977]
1
FC
289;
The
Clarkson
Company
Limited
&
Rapid
Data
Systems
&
Equipment
Limited
v
The
Queen,
No
A-884-77,
Judgment
of
the
Federal
Court
of
Appeal
September
11,1978,
[1979]
CTC
96.
The
principle
involved
was
expressed
by
Thurlow,
ACJ
in
the
Northrop
case
at
291-9
as
follows:
It
is,
I
think,
plain
that
if
this
were
an
ordinary
action
between
private
persons
of
full
age
and
capacity
the
Court
would
not
hesitate
to
grant
the
judgment
requested.
But
that
is
a
situation
in
which
there
is
no
limitation
on
the
power
of
the
private
person
to
commit
his
own
resources.
The
problem
for
the
Court
here,
as
I
see
it,
is
different.
It
is
whether
this
Court
can
on
such
materials
as
are
before
it
properly
grant
judgment
as
asked
against
the
Crown.
The
answer
in
my
opinion
turns
upon
subsection
57(3)
of
the
Federal
Court
Act
and
the
effect
to
be
given
to
it.
It
reads:
“57.(3)
There
shall
be
paid
out
of
the
Consolidated
Revenue
Fund
any
money
or
costs
awarded
to
any
person
against
the
Crown
in
any
proceedings
in
the
Court.”
The
result
of
a
judgment
of
this
Court
against
the
Crown
is
thus
to
authorize
payment
of
the
amount
awarded
from
the
Consolidated
Revenue
Fund
without
an
appropriation
or
vote
for
that
purpose
by
Parliament.
On
the
hearing
of
the
motion
counsel
for
the
plaintiff
freely
conceded
that
it
was
because
there
was
no
appropriation
or
vote
from
which
the
$1,888,131
could
be
paid
and
because
it
would
involve
at
least
a
considerable
delay
before
such
an
appropriation
might
be
made
that
judgment
of
the
Court
for
the
amount
was
being
sought.
It
is
one
thing
for
the
Crown
to
adopt
the
position
that,
upon
fulfilment
of
the
conditions
in
section
44,
it
will
as
a
matter
of
policy
exercise
its
discretion
(assuming
that
there
is
a
discretion)
so
as
to
grant
a
refund;
it
is
another
thing
for
a
court,
upon
the
construction
of
section
44,
to
declare
that
upon
the
fulfilment
of
the
conditions
the
claimant
is
entitled
to
a
refund.
It
is
necessary
then
to
turn
to
the
construction
of
subsection
44(2)
as
it
bears
on
this
issue.
The
section
provides
that
in
certain
cases
“a
refund
of
taxes
paid
under
Part
III,
IV
or
V
may
be
granted
to
Her
Majesty
or
to
the
manufacturer,
producer,
wholesaler,
jobber
or
other
dealer
as
the
case
may
require”.
In
my
opinion
the
words
“may”,
“grant”,
and
“as
the
case
may
require”
together
point
strongly
to
the
conclusion
that
the
power
to
make
a
refund
is
a
discretionary
power
and
not
a
duty
upon
fulfilment
of
the
conditions
specified
in
the
section.
The
respondents
rely
particularly
on
the
well-known
case
of
Julius
v
Lord
Bishop
of
Oxford
(1879-80),
5
App
Cas
214,
in
their
contention
that
the
word
“may”
should
be
read
as
coupled
with
a
duty.
In
that
case
Lord
Cairns
said
at
222-3:
But
there
may
be
something
in
the
nature
of
the
thing
empowered
to
be
done,
something
in
the
object
for
which
it
is
to
be
done,
something
in
the
conditions
under
which
it
is
to
be
done,
something
in
the
title
of
the
person
or
persons
for
whose
benefit
the
power
is
to
be
exercised,
which
may
couple
the
power
with
a
duty,
and
make
it
the
duty
of
the
person
in
whom
the
power
is
reposed,
to
exercise
that
power
when
called
upon
to
do
so.
And
at
225
he
said:
.
.
.
where
a
power
is
deposited
with
a
public
officer
for
the
purpose
of
being
used
for
the
benefit
of
persons
who
are
specifically
pointed
out,
and
with
regard
to
whom
a
definition
is
supplied
by
the
Legislature
of
the
conditions
upon
which
they
are
entitled
to
call
for
its
exercise,
that
power
ought
to
be
exercised,
and
the
Court
will
require
it
to
be
exercised.
The
House
of
Lords
came
to
the
conclusion
in
that
case
that
there
was
not
a
duty,
but
the
case
is
often
cited
for
the
proposition
that
permissive
words
will
be
construed
as
mandatory
when
they
confer
a
power
the
exercise
of
which
is
necessary
to
effectuate
a
right.
See,
for
example,
Labour
Relations
Board
v
The
Queen
ex
rel
of
F
W
Woolworth
Co
Ltd,
[1956]
SCR
82
at
87.
See
also
the
discussion
in
Padfield
v
Minister
of
Agriculture,
Fisheries
and
Food,
[1968]
AC
997
at
1039,
1045.
The
possibility
of
the
application
of
Julius
v
Lord
Bishop
of
Oxford
arises
in
this
case
from
the
fact
that
subsection
44(2)
prescribes
the
conditions
upon
the
fulfilment
of
which
a
refund
may
be
granted.
Counsel
for
the
Crown
invokes
the
provisions
of
the
Interpretation
Act,
RSC
c
1-23
respecting
the
meaning
of
“may”
and
“shall”,
the
decision
of
the
Privy
Council
in
McHugh
v
Union
Bank,
[1913]
AC
299
respecting
the
effect
of
such
provisions
on
the
application
of
the
principle
affirmed
in
Julius
v
Lord
Bishop
of
Oxford,
and
the
reliance
on
McHugh
by
the
Supreme
Court
of
Canada
in
Smith
&
Rhuland
Limited
v
The
Queen
Ex
Rel
Brice
Andrews
et
al,
[1953]
2
SCR
95.
Section
28
of
the
Interpretation
Act
provides:
28.
In
every
enactment
“may”
is
to
be
construed
as
permissive;
“shall”
is
to
be
construed
as
imperative;
section
3
of
the
Act
provides:
3.(1)
Every
provision
of
this
Act
extends
and
applies,
unless
a
contrary
intention
appears,
to
every
enactment,
whether
enacted
before
or
after
the
recommencement
of
this
Act.
(2)
The
provisions
of
this
Act
apply
to
the
interpretation
of
this
Act.
(3)
Nothing
in
this
Act
excludes
the
application
to
an
enactment
of
a
rule
of
construction
applicable
thereto
and
not
inconsistent
with
this
Act.
In
McHugh
v
Union
Bank
Lord
Moulton
said
with
respect
to
this
issue
at
314-315:
In
deciding
this
question
the
dominating
consideration
is
that
the
Ordinance,
which
is
chapter
34
of
the
Consolidated
Ordinances
of
the
North-West
Territories
of
Canada
passed
in
the
year
1898,
is
subject
to
the
Interpretation
Ordinance,
which
is
chapter
1
of
the
same
year,
and
must
be
interpreted
accordingly.
By
s
8,
sub-s
2,
of
the
Interpretation
Ordinance
it
is
expressly
provided
that
the
expression
“shall”
be
construed
as
imperative,
and
the
expression
“may”
as
permissive.
it
is
true
that
(as
is
customary
in
interpretation
clauses)
these
sub-sections
are
prefaced
by
the
words
“unless
the
context
otherwise
requires”,
but
that
does
not
take
away
from
the
authority
of
the
express
direction
as
to
the
construction
of
the
words
“shall”
and
“may”.
The
Court
is
bound
to
assume
that
the
Legislature
when
it
used
in
the
present
instance
the
word
“may”
intended
that
the
imposition
of
the
penalties
should
be
permissive
as
contrasted
with
obligatory
unless
such
an
interpretation
would
be
inconsistent
with
the
context,
that
is,
would
render
the
clause
irrational
or
unmeaning.
But
there
is
nothing
in
the
context
which
creates
any
difficulty
in
accepting
this
statutory
interpretation
of
the
word
“may”.
The
clause
is
just
as
intelligible
with
the
one
interpretation
as
with
the
other.
So
far
from
creating
any
difficulty
the
interpretation
which
leaves
it
permissive
appears
more
reasonable
seeing
that
there
is
no
exception
in
the
clause
for
cases
where
the
excess
has
been
taken
either
under
mistake
or
by
inadvertence,
and
it
is
not
likely
that
the
Legislature
would
insist
on
penalties
being
enforced
where
no
blame
attached.
Be
this
as
it
may,
there
is
nothing
in
the
clause
which
will
permit
their
Lordships
to
depart
from
the
express
provision
of
the
Interpretation
Ordinance
Stating
that
“may”
shall
be
construed
as
permissive.
This
being
the
case,
it
is
not
necessary
to
examine
the
English
decisions
which
establish
that
in
certain
cases
“may”
must
be
taken
as
equivalent
to
“must”.
In
the
light
of
those
decisions
it
is
often
difficult
to
decide
the
point,
and
in
their
Lordships’
opinion
the
object
and
the
effect
of
the
insertion
of
the
express
provision
as
to
the
meaning
of
“may”
and
“shall”
in
the
Interpretation
Ordinance
was
to
prevent
such
questions
arising
in
the
case
of
future
statutes.
In
Smith
&
Rhuland
the
majority
of
the
Supreme
Court
of
Canada
held
that
notwithstanding
the
prescribed
conditions
for
certification
the
word
“may”
made
the
power
to
certify
a
discretionary
one.
The
majority
of
the
Court
reached
this
conclusion
despite
the
existence
elsewhere
in
the
Statute
of
a
provision
speaking
of
a
union
as
“entitled”
to
certification,
Rand,
J
said
at
97:
The
controlling
consideration
in
this
interpretation
is
the
express
declaration
in
s
23(11)
of
the
provincial
Interpretation
Act
(1923
RSNS
c
1)
that
“may”
shall
be
construed
as
being
permissive,
subject
to
s
22(1)
which
provides
that
the
definitions
so
given
shall
apply
“except
in
so
far
as
they
are
.
.
.
inconsistent
with
the
interest
and
object”
of
the
acts
to
which
they
extend.
S
9
of
the
Trade
Union
Act,
as
well
as
the
statute
as
a
whole,
exemplifies
strikingly
the
contrasted
uses
of
both
“shall”
and
“may”.
For
instance,
in
9(1)
we
have
“the
Board
shall
determine
whether
a
unit
is
appropriate”;
“the
Board
may
.
.
.
include
additional
employees
in
the
unit”;
“the
Board
shall
take
such
steps
to
deter-
mine
the
wishes
of
the
employees”;
9(4)
“the
Board
..
.
may,
for
the
purpose
..
.
make
such
examination
of
records
or
other
inquiries,
etc.”;
“the
Board
may
prescribe
the
nature
of
the
evidence
to
be
furnished”;
9(5)
“the
Board,
in
determining
the
appropriate
unit,
shall
have
regard
to
the
community
of
interest’’;
9(7)
“if
the
Board
is
not
satisfied
.
.
.
it
shall
reject
the
application
and
may
designate
the
time
before
a
new
application
will
be
considered”;
s
11,
the
Board
“may
revoke
the
certificate”.
These
examples
could
be
multiplied
and
in
the
face
of
them
it
would,
I
think,
be
an
act
of
temerity
to
hold
that
in
the
clause
before
us
the
word
is
to
be
taken
in
an
imperative
sense.
The
judgment
of
the
Judicial
Committee
in
McHugh
v
Union
Bank
.
.
.
is,
in
this
respect,
conclusive.
There
the
language
of
the
ordinance
was
virtually
identical
with
the
Interpretation
act
here,
although
in
the
reasons
a
simpler
expression
is
indicated;
but
as
Lord
Moulton
puts
it,
“only
a
clear
case
of
impelling
context
would
justify
giving
it
an
inoperative
construction”.
The
earlier
English
cases
are
of
little
assistance
because
of
the
absence
of
such
a
clause,
and,
again
to
use
Lord
Moulton’s
words,
“the
object
and
effect
of
the
insertion
of
the
express
provision
as
to
the
meaning
of
‘may’
and
‘shall’
in
the
interpretation
Ordinance
was
to
prevent
such
questions
arising
in
the
case
of
future
statutes”.
In
the
light
of
this
authority
I
am
of
the
opinion
that
the
power
to
make
a
refund
under
subsection
44(2)
is
a
discretionary
one,
subject
to
the
conditions
therein
specified,
and
that
it
does
not
become
a
duty
upon
the
fulfilment
of
those
conditions.
It
would
appear
that
a
discretion
is
necessary
if
only
because
of
the
need
to
determine
the
particular
person
or
persons
ina
chain
of
transactions
to
whom
a
refund
should
be
made
in
the
circumstances
of
a
particular
case
and
the
conditions
of
waiver
or
indemnity
upon
which
such
a
refund
should
be
made.
The
respondents
argued
that
the
decision
of
the
Supreme
Court
of
Canada
in
the
Dominion
Bridge
case,
supra,
in
which
the
Court
dismissed
an
appeal
from
a
judgment
of
the
Exchequer
Court
holding
the
suppliant
to
be
“entitled”
to
a
refund,
is
authority
for
the
proposition
that
upon
fulfilment
of
the
conditions
in
subsection
44(2)
of
the
Excise
Tax
Act
a
claimant
is
entitled
to
a
refund.
As
to
this,
I
can
only
observe
that
the
issue
does
not
appear
to
have
been
raised
in
either
court.
Prior
to
the
Dominion
Bridge
case
there
had
been
judgments
in
the
Exchequer
Court
holding
that
a
customs
duty
drawback
was
a
matter
of
discretion
and
not
of
right.
See
Matton
v
The
Queen
(1897),
5
Ex
CR
401,
and
Canada
Cement
Co
Ltd
v
The
King,
[1923]
Ex
CR
145.
In
view
of
this
earlier
jurisprudence
I
cannot
conclude
that
there
was
an
intention
on
the
part
of
the
Exchequer
Court
in
the
Dominion
Bridge
case
to
depart
from
the
view
which
it
had
previously
adopted
of
a
power
of
this
kind
without
further
discussion
of
the
question.
The
question
then
remains
whether
the
Court
on
the
present
proceedings
may
grant
a
declaration
that,
in
so
far
as
the
conditions
prescribed
in
subsection
44(2)
are
concerned,
the
respondents
are
persons
to
whom
a
refund
may
be
granted.
To
permit
such
a
declaration
the
respondents
have
applied
for
leave
to
amend
their
statement
of
claim
by
the
addition
of
paragraph
16A
to
read
as
follows:
16A.
In
the
alternative,
each
of
the
plaintiffs
seeks
a
declaration
that
with
respect
to
the
taxes
paid
as
set
forth
in
paragraph
7
herein
it
falls
within
the
provisions
of
subsection
44(2)
of
the
Excise
Tax
Act
as
the
person
to
whom
a
refund
of
taxes
paid
may
be
granted.
In
view
of
the
particular
circumstances
of
this
case,
where
the
parties
had
agreed
that
this
issue
would
not
be
raised
on
appeal
and
where
they
both
sought
a
judgment
from
the
Court
as
to
the
construction
and
application
of
the
conditions
of
subsection
44(2),
I
would
allow
the
amendment
and
give
judgment
accordingly.
I
would
vary
the
judgment
of
the
Trial
Division
by
substituting
therefor
a
declaration
that
the
respondents
are
persons
who
satisfy
the
conditions
in
subsection
44(2)
of
the
Excise
Tax
Act
and
are
accordingly
persons
to
whom
refunds
may
be
granted
in
the
agreed
amounts.
The
appeal
should
be
otherwise
dismissed,
with
costs
to
the
respondents
in
this
court
and
in
the
trial
division.
Ryan,
J:—I
have
read
and
I
agree
with
the
Reasons
for
Judgment
of
Mr
Justice
Le
Dain.
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