Banque Provinciale du Canada v. Ogilvie, [1973] SCR 281

Supreme Court of Canada

Banque Provinciale du Canada v. Ogilvie, [1973] S.C.R. 281

Date: 1972-12-22

Banque Provinciale du Canada Appellant;

and

Nelson Ogilvie Respondent,

and

The Assessment Commissioner of the City of Ottawa Third Party.

1972: November 21, 22; 1972: December 22.

Present: Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall, Spence, Pigeon and Laskin JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO

Assessment—Statutory formula for apportionment of corporation assessment for support of separate schools—Onus of proof—Evidence of appellant’s chief accountant as to proportion of Roman Catholic shareholdings based on affidavits of branch managers—Unwillingness to produce affidavits—Whether appellant’s notice sufficient to comply with s. 58 of The Separate Schools Act, R.S.O. 1960, c. 368.

The appellant bank gave the statutory notice provided for in The Separate Schools Act, R.S.O. 1960, c. 368, requiring that 63 per cent of its assessment in the City of Ottawa be apportioned for separate school purposes. This notice was not acted upon by the assessment commissioner. The Court of Revision rejected the bank’s appeal. The County Court judge reversed this decision and directed that the assessment should be apportioned in accordance with the notice. A further appeal to the Ontario Municipal Board affirmed the decision of the County Court judge. The next appeal to the Ontario Court of Appeal reversed the decision of the Municipal Board and directed that the assessment roll of the City of Ottawa be amended to show the bank as being assessed as a public school supporter. The bank then appealed to this Court.

The only evidence given was that of the chief accountant of the bank. Both the County Court judge and the Municipal Board held that this evidence satisfied the onus upon the bank. The Court of Appeal was of a different opinion.

The evidence was that there were 700,000 issued and outstanding shares of the bank, of which 443,472

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were held by Roman Catholics. There were, in all, 4,505 shareholders of the bank. The general manager of the bank wrote letters to its branch managers, 180 in all, instructing them to make inquiries concerning the religious affiliation of shareholders residing in their districts. A list of shareholders was enclosed for the information of each manager. On completion of their work, they reported to the general manager and verified their results by affidavit.

Held (Laskin J. dissenting): The appeal should be allowed.

Per Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall and Pigeon JJ.: As to the question raised by s. 58(3) of the The Separate Schools Act on onus of proof, the onus rests on the company to show that its notice is correct. However, the statute does not require that the precise shareholding of Roman Catholics be ascertained and all that is required is that the company should prove at least a minimum figure of Roman Catholic holdings and that the ratio required by the notice does not exceed the proportion of holdings measured by that figure.

The appellant did inquire along these lines, and the appeal should not be decided on the narrow ground of a refusal by the chief accountant to produce the affidavits of the branch managers. The purpose of the production of these affidavits could only have been to show what was obvious and undenied—that the evidence on which the Court was being asked to act was hearsay and should not be given any weight. The chief accountant’s oral evidence, without the affidavits, was reliable and was properly weighed and acted upon by the County Court judge and the Municipal Board.

Per Spence J.: If it had been the desire and intent of counsel for the assessment commissioner and the ratepayer to seriously cross-examine the chief accountant upon his evidence by use of the branch managers’ affidavits and thereby attempt to destroy the trustworthiness of the admittedly hearsay evidence given by the said accountant, such counsel would have been entitled to exercise such right and to demand the production of the said affidavits. However, the record before the County Court judge indicated that the only interest of counsel for the assessment commissioner and the ratepayer was to

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illustrate the admittedly hearsay character of the accountant’s evidence.

Per Laskin J., dissenting: To admit the results of the inquiry made by the bank was to give wide latitude to the admission of hearsay, justified however by relying on s. 58 as a statutory indicator. But if such evidence was to be admitted, the very documents in which it had been collected and by which it had been confirmed should be tendered.

[Ford Motor Co. v. Board of Education of Windsor, [1938] O.R. 301, affirmed [1939] S.C.R. 412, reversed [1941] A.C. 453, distinguished]

APPEAL from a judgment of the Court of Appeal for Ontario[1], allowing the respondent’s appeal from an order of the Ontario Municipal Board, whereby an appeal from a judgment of Macdonald Co. Ct. J. was dismissed. Appeal allowed, Laskin J. dissenting.

Lionel Choquette, Q.C., and David Dehler, for the appellant.

E. Peter Newcombe, Q.C., for the respondent.

The judgment of Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall and Pigeon JJ. was delivered by

JUDSON J.—The issue in this appeal is whether the appellant corporation, the Provincial Bank of Canada, has properly apportioned its school assessment between public and separate schools. It gave the statutory notice provided for in The Separate Schools Act requiring that 63 per cent of its assessment in the City of Ottawa be apportioned for separate school purposes. This notice was not acted upon by the Assessment Commissioner. The Court of Revision rejected the bank’s appeal. The County Court judge reversed this decision and directed that the assessment should be apportioned in accordance with the notice. A further appeal to the Ontario Municipal Board affirmed the decision of the County Court judge. The next appeal to the Ontario Court of Appeal reversed the decision of the Municipal Board and directed

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that the assessment roll of the City of Ottawa be amended to show the bank as being assessed as a public school supporter. The bank now appeals to this Court.

The only evidence given was that of Jean Machabee, who was the chief accountant of the bank and its registrar of shares. Both the County Court judge and the Municipal board held that this evidence satisfied the onus upon the bank. The Court of Appeal was of a different opinion.

The evidence was that there were 700,000 issued and outstanding shares of the bank, of which 443,472 were held by Roman Catholics. There were, in all, 4,505 shareholders of the bank. Obviously, information of this kind must be compiled by inquiry. The general manager of the bank wrote letters to its branch managers, 180 in all, instructing them to make inquiries concerning the religious affiliation of shareholders residing in their districts. A list of shareholders was enclosed for the information of each manager. On completion of their work, they reported to the general manager and verified their results by affidavit.

Section 58 (1) and (3) of The Separate Schools Act, R.S.O. 1960, c. 368, provides as follows:

58. (1) A corporation by notice (Form 2) to the clerk of any municipality wherein a separate school exists may require the whole or any part of the land of which the corporation is either the owner and occupant, or not being the owner is the tenant, occupant or actual possessor, and the whole or any proportion of the business assessment or other assessments of the corporation made under The Assessment Act, to be entered, rated and assessed for the purposes of the separate school.

(3) Unless all the stock or shares are held by Roman Catholics the share or portion of such land and business or other assessments to be so rated and assessed shall not bear a greater proportion to the

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whole of such assessments than the amount of the stock or shares so held bears to the whole amount of the stock or shares.

Subsection (3) raises a serious question on onus of proof. Must the company assume the responsibility of showing that its notice is correct or must the municipality prove the contrary? In Ford Motor Company of Canada Limited v. Board of Education for the City of Windsor[2], the burden was imposed upon the municipality in the Ontario Court of Appeal and in this Court[3]. It was held that on a proper construction of the statute (s. 58(3) above quoted), the company’s notice must stand unless displaced by evidence that the provisions of the subsection had been disregarded. This decision was reversed in the Privy Council[4], where it was held that although the company had acted in good faith, it had not discharged the onus which rested on it, the notice being admittedly founded upon a guess or an estimate. The Privy Council held that the statute does not require that the precise shareholding of Roman Catholics be ascertained and all that is required is that the company should prove at least a minimum figure of Roman Catholic holdings and that the ratio required by the notice does not exceed the proportion of holdings measured by that figure.

The facts in the case presently before us are significantly different from those in the Windsor case. Here we have elaborate and detailed investigation conducted by the company to the best of its ability to ascertain the proportion of Roman Catholic shareholdings mentioned in the subsection. There is and can be no attack made upon the good faith of the company or the means that it adopted. In the Windsor case it was stated on behalf of the company that it did

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not know and could not ascertain the percentage of shares held by Roman Catholics, that it was a practical impossibility to ascertain this, and that in fact, the directors did not inquire.

However, this company did inquire along the lines suggested in the Privy Council decision. The County Court judge and the Municipal Board held that the inquiry which was described to them satisfied the requirements of the statute. Before both tribunals the evidence was attacked as being without probative value because it was based upon what “A” had told “B” (the local manager), or what “B” knew of his own personal knowledge and had passed on to “C” (the chief accountant and registrar). Both tribunals rejected this attack, weighed the evidence and gave effect to it. To have done otherwise would have nullified the provisions of the statute in the case of all companies with a large number of shareholders.

In the Court of Appeal, the attack on the affidavits of the branch managers as hearsay evidence was renewed. But the Court did not found its reasons on that ground. It assumed, without deciding, that the affidavits were admissible in these proceedings. It held that the bank’s case failed because of the refusal of the chief accountant to produce the affidavits, which meant that the real or best evidence was not available and that there was not opportunity to examine or test the accuracy of the calculations from the lists.

This appeal, in my opinion, should not be decided on the narrow ground of a refusal to produce the affidavits. In the first place, the record does not disclose such a refusal. Counsel’s first observation was that the chief accountant was summarizing the result of the inquiries made by a large number of persons

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and asked where the affidavits were and whether they would be filed. Counsel for the bank then stated that he would be willing to file them, but with reluctance because of the attitude of shareholders towards a disclosure of their affairs. There was a brief exchange between counsel for the municipality and the judge and then counsel said:

All I am doing is pointing out to Your Honour that even if the affidavits were filed, they would be objectionable, but that is one more step because this gentleman is merely summarizing.

The judge took note of the objection and went on to hear the oral evidence. It is clear from his reasons that he was satisfied with the scope and care of the inquiry and with the reliability of the result, without the production of the affidavits.

It is equally clear to me that the purpose of production of these affidavits could only have been to show what was obvious and undenied—that the evidence on which the Court was being asked to act was hearsay and should not be given any weight. In my opinion, the chief accountant’s oral evidence, without the affidavits, was reliable and properly weighed and acted upon by the County Court judge and the Municipal Board.

The appeal should be allowed and the orders made by the County Court judge and the Municipal Board affirmed. It should be ordered that the notice from the appellant to the clerk of the Municipality of the City of Ottawa dated April 20, 1960, was proper and sufficient notice to comply with s. 58 of The Separate Schools Act, R.S.O. 1960, c. 368, and that the assessor was bound to assess and return his roll apportioning the appellant’s assessment in accordance with the said notice.

The appellant is entitled to its costs both here and in the Court of Appeal.

SPENCE J.—I have had an opportunity to read the reasons for judgment which have been writ-

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ten by Mr. Justice Judson and Mr. Justice Laskin. Both of my brethren are in agreement that the decision of the Judicial Committee in Windsor Board of Education v. Ford Motor Co. of Canada Ltd.[5] approved the degree of proof in support of the notice given by the Corporation which was described by Lord Atkin as follows:

In this connection it must be remembered that we are within the realm of legal proof, which does not require certainty, but such a measure of probability derived from ascertained facts as to entitle the judicial mind reasonably to infer the fact in issue.

and that such reasonable investigation was made by the Banque Provinciale du Canada in the present case. It is Mr. Justice Laskin’s position, however, that the failure of the bank to produce the affidavits of its bank managers in which they delineated their investigation of the religious affiliation of the bank shareholders and report on such investigation prevented any cross-examination of the chief accountant who summarized the results of such reports and, therefore, reduced his evidence to “no evidence at all”, (I merely copy words used in the judgment of the Court of Appeal for Ontario).

Mr. Justice Judson, on the other hand, takes the position that the purpose of calling for the production of those affidavits could only have been to show that the evidence on which the Court was being asked to act was hearsay and should not be given any weight. The Banque Provinciale had, of course, agreed that such evidence was hearsay but submitted that none the less it was acceptable under the test set out in the Windsor Board of Education v. Ford judgment.

Had I come to the conclusion that it was the desire and intent of the counsel for the city assessment commissioner and the ratepayer to seriously cross-examine the chief accountant of the bank upon his evidence by use of those affidavits and thereby attempt to destroy the trustworthiness of the admittedly hearsay evi-

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dence given by the said accountant, I would have been strongly of the view that such counsel was entitled to exercise such right and was entitled to demand the production of the said affidavits. I have, however, reviewed carefully the record before the learned County Court judge and have come to the conclusion that the only interest of counsel for the assessment commissioner and the ratepayer was to illustrate the admittedly hearsay character of the accountant’s evidence. Having previously objected to the accountant’s evidence as being only hearsay, counsel addressed the Court as follows:

MR. NEWCOMBE: Your Honour this brings us to the objection. This witness, I would submit, is purely summarizing to Your Honour the result of enquiries made by a great many people, and where are the affidavits themselves—is my friend going to file these affidavits?

Counsel for the bank then stated his unwillingness to produce the affidavits because he did not wish to reveal any confidential matter between the bank and its managers or the identity and holdings of the various shareholders but he opened his statement with the words, “Well, Your Honour, I would be willing to file the affidavits but”. In other words, there was not a firm refusal to produce the affidavits and counsel for the assessment commissioner and the ratepayer in answer to the learned trial judge’s statement:

I am surprised, Mr. Newcombe, that you would indicate you would admit affidavit evidence.

replied:

MR. NEWCOMBE: All I am saying Your Honour is—I am not conceding I would admit affidavit evidence, but that is one step further, because this gentleman is summarizing on the basis of the affidavit evidence, and something he has no knowledge of, and I was going to argue as to the acceptability of the affidavits.

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and then continued:

MR. NEWCOMBE: All I am doing is pointing out to Your Honour that even if the affidavits were filed, they would be objectionable, but that is one step more because this gentleman is merely summarizing.

Thereby making it plain that he continued to urge the admissibility of the evidence as hearsay whether the affidavit had been produced or not.

I have examined the balance of the record before the learned County Court judge and I am convinced that counsel for the assessment commissioner and ratepayer maintained that position throughout.

In referring to the production of documentation which would reveal identity of the shareholders, the learned trial judge later said:

That would be pretty hopeless to just get a list of those and try to check it. The only list that would be practical would be if the Bank supplied him with a list of those who they claimed were Roman Catholic.

MR. NEWCOMBE: It would simplify the job.

THE CHAIRMAN: It boils down to, basically, whether there is such an obligation, if it is contested.

To which counsel made the very significant reply:

I won’t pursue this if you agree with me that it is wholly hearsay.

I have therefore come to the conclusion that under the particular circumstances in the present case, the assessment commissioner and ratepayer cannot now insist that the affidavits of the bank managers be produced.

As would my brother Judson, I would allow the appeal with costs here and in the Court of Appeal.

LASKIN J. (dissenting)—We are called upon in this case to determine whether the appellant bank has met the legislative requirements of s. 58 of The Separate Schools Act, R.S.O. 1960,

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c. 368 (now s.64 of R.S.O. 1970, c.430), in apportioning its assessment for school taxes for the support of separate schools in the City of Ottawa. The Legislature has prescribed a formula for such an apportionment in such general terms as to permit, on the one hand, a near unchallengeable unilateral determination by a corporation or as to impose, on the other hand, a near insuperable burden upon a corporation with a large number of dispersed shareholders. Neither extreme appears to me to be consonant with the spirit of the legislation, and it falls hence to the Courts to establish standards of compliance which will permit a reasonable application.

The issue has been litigated before, and in a case which passed through this Court and into the hands of the Privy Council, then our ultimate appellate tribunal. Windsor Board of Education v. Ford Motor Co. of Canada Ltd.[6], reversing [1939] S.C.R. 412, which affirmed [1938] O.R. 301, was decided under the same legislative provisions as are present in this case; and so far as relevant they read as follows:

58. (1) A corporation by notice (Form 2) to the clerk of any municipality wherein a separate school exists may require the whole or any part of the land of which the corporation is either the owner and occupant, or not being the owner is the tenant, occupant or actual possessor, and the whole or any proportion of the business assessment or other assessments of the corporation made under The Assessment Act, to be entered, rated and assessed for the purposes of the separate school.

(2) The assessor shall thereupon enter the corporation as a separate school supporter in the assessment roll in respect of the land and business or other assessments designated in the notice, and the proper entries shall be made in the prescribed column for separate school rates, and so much of the land and business or other assessments so designated shall be assessed accordingly for the purposes of the separate

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school and not for public school purposes, but all other land and the remainder, if any, of the business or other assessments of the corporation shall be separately entered and assessed for public school purposes.

(3) Unless all the stock or shares are held by Roman Catholics the share or portion of such land and business or other assessments to be so rated and assessed shall not bear a greater proportion to the whole of such assessments than the amount of the stock or shares so held bears to the whole amount of the stock or shares.

(4) A notice given in pursuance of a resolution of the directors is sufficient and shall continue in force and be acted upon until it is withdrawn, varied or cancelled by a notice subsequently given pursuant to any resolution of the corporation or of its directors.

In the Windsor Board of Education case, the designated portion of its assessment assigned by it to separate school support was made by the company on a mere guess or estimate. In holding that this did not satisfy the onus upon the company to establish at least a minimum figure of Roman Catholic holdings and that the ratio required by the notice did not exceed the proportion of holdings measured by that figure, the Privy Council had this to say on the question of proof (at p. 462):

The present provision, as it has been since 1913, is that the required apportionment to separate schools must not be of a greater proportion than Roman Catholic shares bear to the total share capital. It is true that the statutory apportionment has still to be measured by a given ratio, and that the smaller figure must be ascertained to ensure that the statutory apportionment is no greater than it, but under the present code the smaller figure need by no means represent the exact figure of Roman Catholic shareholders. The total may be much larger. All that is required is proof that at least the smaller figure represents accurately a Roman Catholic shareholding. The company is not bound to apportion up to even a well-ascertained figure. They may decide to give less than the ascertained figure, and, without knowing

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what the precise numbers are, they may be able to know and, if called on, to prove that the minimum figure is at least x, and that their apportionment in favour of separate schools is no greater than x. There need be no difficulty in ascertaining this minimum figure. Some holdings may be known to be those of Roman Catholics. These, at least, form a measure of the desired ratio. There may also be facts from which the reasonable inference is that some holdings in excess of those actually known would be those of Roman Catholics; e.g., having ascertained five per cent., it may be easy to support an inference that, at any rate, there are, say two per cent., more. In this connection it must be remembered that we are within the realm of legal proof, which does not require certainty, but such a measure of probability derived from ascertained facts as to entitle the judicial mind reasonably to infer the fact in issue.

Prior to 1913, a company seeking to apportion its assessments between public schools and separate schools was required to see that its apportioned assessment for separate schools bore the same ratio to the total assessment as the number of shares held by Roman Catholics bore to the whole amount of its issued shares. The modification of this rigid formula still left a company with the burden of showing compliance to satisfy a statutory exception.

The record in the present case shows that on April 20, 1960, the appellant bank’s board of directors passed a resolution that its assessments in Ottawa for school purposes be apportioned at 63 per cent for separate schools and 37 per cent for public schools. This resolution was embodied in a notice of even date to the clerk of the City of Ottawa, and the notice was delivered the following day to the city’s assessment commissioner. At that time there was no verifying data in the hands of the corporation to establish that the designated percentage of its assessments did not bear a greater proportion to

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the whole of the assessments than the amount of shares held by Roman Catholics bore to the whole amount of issued shares.

The assessment commissioner refused to act on the notice and the bank subsequently set about to obtain verification of its apportionment. It did this by drawing up a list of shareholders as of June 1, 1960, showing their respective shareholdings, and by sending portions of this list, representing shareholders in his district, to each of its 180 branch managers, along with a covering letter of August 8, 1960. The letter directed them to indicate, either through their own knowledge or as result of inquiries, which of the shareholders on their respective lists (corporate shareholders and shares in the hands of brokers being excluded) were Roman Catholics and the parishes to which they belonged. Each branch manager was asked to return his marked list with a supporting affidavit.

The chief accountant and registrar of the bank, Jean Machabee, gave evidence that he compiled the returns from the bank managers and that they showed that of 700,000 issued shares 443,472 were held by Roman Catholics. This proportion gives a percentage of 63.35, a very slight margin above the statutory requirement. Machabee testified that not all shares were involved in the inquiries by the branch managers. In all, there were 4,505 shareholders as of June 1, 1960. Some 115,000 shares were not allocated to any branch manager because they were held by persons outside of any branch district, but about 5,000 of these shares were included in the computation because they were held by persons known to the head office staff of the bank. Another 100,000 shares were said to have been marked as doubtful in the returns made by the branch managers.

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The oral evidence of Machabee, a copy of the letter of August 8, 1960, and a blank form of the affidavit sworn by the bank managers were alone relied upon by the bank to establish its 63 per cent apportionment set out in its resolution and the subsequent notice to the city. The oral evidence was, of course, hearsay and, indeed, hearsay upon hearsay. On the appeal by the bank to the County Court judge from an adverse decision of the Court of Revision, P.J. Macdonald Co.Ct.J. held that a reasonable inquiry had been made by the bank as to the religious affiliation of its individual shareholders and that this satisfied the statutory prescription; to hold that proof must come from the mouths of individual shareholders would have made the legislation unworkable in the case of a company with numerous shareholders. It was also impractical, in his view, to call each of the branch managers. He concluded therefore that the bank had satisfied the onus on it.

The Ontario Municipal Board echoed this conclusion on the further appeal to it, noting, however, that it was open to the city to obtain production of the shareholder list and to examine viva voce the person responsible for the notice given under s. 58 (1) of The Separate Schools Act. The Ontario Court of Appeal disagreed and held (in its words) that “the respondent bank in the circumstances of this case did not adduce any evidence to satisfy the onus upon it that 63% of the issued shares were owned by Roman Catholics”.

What troubled the Court of Appeal, leading it to reject the oral evidence of Machabee as sufficient proof of compliance with s.58 of the Act, was the refusal of the bank to produce the affidavits and the accompanying returns of the various branch managers. Without saying that the oral evidence and the affidavits verifying

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the returns would be proper proof, the Court of Appeal proceeded on the assumption that they were admissible in declaring that the case turned on a more fundamental principle than the nature of the evidence admissible in the proceedings. What that principle was is shown in the following passages from its reasons:

For reasons which have no warrant in law or in reason counsel for the respondent bank refused to produce the affidavits from which the chief accountant made his calculations and made it perfectly clear that even if the learned county judge ordered that the affidavits be produced his client would not obey that order. As a result the appellant was denied the right to production of those affidavits for the purposes of examination; the right to test the accuracy of the calculations made from the lists annexed to the affidavits and the right to cross-examine the witness for the purpose of showing error in the calculations or to discredit his evidence.

Of equal importance, the position taken by counsel for the respondent bank deprived the learned county judge of having before him the “real” evidence or the “best” evidence which the respondent bank then had in its possession as to the number of shares owned by Roman Catholics.

In the appeal to the county judge in this proceeding there was a real lis between the parties, or those whom they represented, namely, the incidence of taxation as between separate school supporters and public school supporters. The Assessment Act provides in section 75(8) that “at the court so held, the judge shall hear the appeals …”

Section 77 sets out the powers of the judge sitting on appeal from the court of revision and the kind of hearing where questions of fact are involved. It is in the following terms:

“77.(1) In all proceedings before the county judge under or for the purposes of this Act, the judge possesses all such powers for compelling the attendance of and for the examination on oath of all parties, whether claiming or objecting or objected to, and of all other persons whatsoever, and for the production of books, papers, rolls and docu-

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ments, and for the enforcement of his orders, decisions and judgments, as belong to or might be exercised by him in the county court.

(2) The hearing of the appeal by the county judge shall, where questions of fact are involved, be in the nature of a new trial, and either party may adduce further evidence in addition to that heard before the court of revision, subject to any order as to costs or adjournment that the judge may consider just.

I mention these matters for two reasons. In the first place even the assessor, whose function is purely administrative and before whom there are no disputing parties, is bound to prepare the assessment roll after “diligent inquiry … according to the best information to be had”, section 20(1). I would not suggest for a moment that the learned county judge did not make a diligent inquiry so far as he was permitted to do so but the respondent bank quite deliberately refused him the best evidence which it then had in its immediate possession. The respondent’s refusal to produce deprived the county judge of the quality of information to which even an assessor is entitled.

Secondly, the duty and powers of the county judge are judicial in character. He must decide issues of fact upon a trial, (sec. 77 supra). The course adopted by the respondent bank, if permitted, would usurp that function, relegating the county judge to the position of a rubber stamp to approve the calculations of the witness, provided that he did not disbelieve him. The effect of the refusal of the respondent bank to produce the affidavits upon which the chief accountant’s evidence was based was to destroy the probative value of that evidence to the extent that it amounted to no evidence. With deference to the learned county judge and to the Municipal Board that evidence ought to have been treated as no evidence at all.

The question of the production of the affidavits arose during the proceedings before the County Court judge and was carried into the proceedings before the Ontario Municipal Board which, by agreement, took the evidence given before the County Court judge as the record for

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its purposes. Objection was taken to the evidence of Machabee as being merely a summary of the branch managers’ returns, especially when the affidavits were not also filed. When counsel for the bank stated that he would not file the affidavits because the relations between head office and branch managers were confidential, as were the relations between the bank and its shareholders, he was seeking to turn a purely internal consideration into a legal privilege. This, as the Ontario Court of Appeal noted, was an indefensible contention.

Counsel for the appellant bank and counsel for the respondents put themselves into untenable positions in this connection. The former, admitting readily that Machabee was giving hearsay evidence—and, indeed, it was hearsay upon hearsay—refused to shore it up with available documentary support. The latter objected to the oral hearsay and yet sought to have the affidavits and returns produced even though they were no less hearsay, and equally objectionable on that ground. The jousting of counsel on the questions of the production and admissibility of the affidavits and the returns thereto has no bearing, however, on the obligation of the appellant to make out at least a prima facie case. Regardless then of whether the respondent’s position was consistent, the issue which the Courts must face is whether the proof actually offered provided a sufficient basis for satisfying the command of s.58.

It is manifest that in the case of corporations with a large number of shareholders proof of compliance with s.58 would be practically impossible without admissibility of hearsay evidence. No larger burden can be cast upon a corporation, if the policy to permit apportionment of assessments for separate school sup-

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port is to be realizable, than to oblige it to use reasonable modes of inquiry to ascertain the Roman Catholic affiliation of its shareholders. But if this leeway from strictly judicial modes of proof is to be permitted, it must be on condition that all the data associated with the chosen mode of inquiry be made available to the tribunal or Court before which contestation of a corporation’s apportionment comes.

In this aspect of the matter, I agree with the conclusion of the Ontario Court of Appeal. In my opinion, the refusal to produce the available back-up material for the oral summary given by Machabee was a refusal to respect the very mode of inquiry chosen by the bank. The affidavits and the returns were inseparable from the inquiry and were the only proper proof of two things: first, that the figures given by Machabee were correct according to the returns by the branch managers; and, second, that the inquiry had indeed been made as directed by the bank, that is, that the 180 branch managers had carried out the task laid upon them. Production of these documents to show the due course and the results of the inquiry would not mean that either the branch managers or the shareholders would have to be witnesses.

I am prepared in this case, albeit not without some concern, to approve the method of inquiry chosen by the bank. It is not, of course, a method which non-banking corporations can as conveniently adopt; branch banking, which prevails in Canada, provides a means of developing and maintaining local contacts. Another method, more appropriate to business corporations with a large number of scattered shareholders, would be to ask for an indication of religious affiliation when mailings are made to shareholders, perhaps even by way of statutory declaration. There could also be an inquiry of the transferee upon any transfer of shares, so as to enable a corporation which wishes to act under s. 58 to

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keep its information current. Another method would be to proceed by a sampling of the shareholders, which would involve the taking of information from those comprising the sample group. The group itself might be chosen by reference to location and shareholdings, and would have to be sufficiently large to make the results persuasive. Indeed, some of those in the sample might be put forward as witnesses to show not only the accuracy of the survey information, but also the character of the inquiry. It was also suggested that a search could be made of assessment rolls but this would be feasible, if at all, in only a limited number of cases. Of course, there could be a legislative resolution of the difficulty. This has been done in other situations where the hearsay rules and the exceptions to them have not provided an answer to the difficulties of proof.

In the absence of legislation, a Court is thrown back to the principles of necessity and trustworthiness which, in the Wigmore view, are the pillars of the recognized exeptions to hearsay orthodoxy. Some analogy to the problem of proof thrown up by s. 58 exists in the tender of survey evidence or public opinion poll evidence in a growing number of American cases. Although it is true that the surveys have generally been made in connection with trade mark infringement and unfair competition or passing off cases, the cases do reflect an approach to admissibility which is helpful here: see Note, 66 Harv. L. Rev. 498 (1953). Zippo Manufacturing Co. v. Rogers Imports Inc.[7] is illustrative. It involved an allegation of unfair competition in the alleged imitation by the defendant of a cigarette lighter manufactured by the plaintiff. Evidence was tendered and admitted of consumer surveys by which plaintiff sought to show likely confusion of source. In admitting the evidence

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by way of exception to the hearsay rule, the Court emphasized the element of necessity and, of particular importance in the present case, the element of trustworthiness. As to this the Court said, inter alia, at p. 684:

The second element involved in this approach is the guaranty of trustworthiness supplied by the circumstances under which the out-of-court statements were made. A logical step in this inquiry is to see which of the hearsay dangers are present. With regard to these surveys: there is no danger of faulty memory; the danger of faulty perception is negligible because respondents need only examine two or three cigarette lighters at most; the danger of faulty narration is equally negligible since the answers called for are simple. The only appreciable danger is that the respondent is insincere. But this danger is minimized by the circumstances of this or any public opinion poll in which scientific sampling is employed, because members of the public who are asked questions about things in which they have no interest have no reason to falsify their feelings. While the sampling procedure substantially guarantees trustworthiness insofar as the respondent’s sincerity is concerned, other survey techniques substantially insure trustworthiness in other respects. If questions are unfairly worded to suggest answers favorable to the party sponsoring the survey, the element of trustworthiness in the poll would be lacking. The same result would follow if the interviewers asked fair questions in a leading manner. Thus, the methodology of the survey bears directly on trustworthiness, as it does on necessity.

The considerations canvassed in the Zippo case are at the bottom of the concern I have expressed about the acceptability of the method of inquiry pursued in the present case. It may be that in endorsing it, with the obligations of disclosure and proffer of associated documents, I am still taking a very relaxed view of the element of trustworthiness. But I do so here on the basis of the close connection of the branch managers with their locality which would give

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wide personal contacts, and because they were charged to carry out an assignment in which they had no personal interest but which was merely part of their duties.

As is obvious, to admit the results of the inquiry made by the bank is to give wide latitude to the admission of hearsay, justified however by relying on s.58 as a statutory indicator. But, I repeat, if such evidence is to be admitted, the very documents in which it has been collected and by which it has been confirmed must be tendered.

I would, accordingly, dismiss the appeal with costs.

Appeal allowed with costs, LASKIN J. dissenting.

Solicitors for the appellant: Vincent, Addy & Bonneau, Ottawa.

Solicitors for the respondent Nelson Ogilvie: Gowling, MacTavish, Osborne & Henderson, Ottawa.

Solicitor for the third party: Donald Hambling, Ottawa.