Muldoon,
J.:—This
action
focuses
on
section
34
of
the
Excise
Tax
Act,
which
section
the
plaintiff
asserts
to
be
unconstitutional,
with
consonant
consequences
to
the
defendant
Minister's
purporting
to
act
thereunder
in
regard
to
the
plaintiff’s
liability
to
pay
excise
tax.
The
text
of
section
34
is:
34.
Where
goods
subject
to
tax
under
this
Part
or
under
Part
III
are
sold
at
a
price
that
in
the
judgment
of
the
Minister
is
less
than
the
fair
price
on
which
the
tax
should
be
imposed,
the
Minister
has
the
power
to
determine
the
fair
price
and
the
taxpayer
shall
pay
the
tax
on
the
price
so
determined.
Few,
if
any
of
the
facts
are
disputed.
The
issues
in
contention
are
mainly
matters
of
law.
They
will
all
be
considered
in
turn,
after
disposition
of
three
preliminary
matters
which
follow.
First,
since
a
constitutional
issue
is
raised,
notice
was
given
to
the
attorneys
general
of
British
Columbia
and
Canada
respectively
(Transcript:
p.
10).
The
provincial
attorney
general
declines
to
participate
and,
of
course,
the
defendant's
solicitor
of
record
is
the
deputy
of
the
Attorney
General
of
Canada.
Second,
the
plaintiff
abandons
its
claim
pursuant
to
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms
(Transcript:
p.
10).
Third,
this
action
is
brought,
according
to
the
plaintiff's
counsel
(Transcript:
p.
3),
pursuant
to
paragraph
17(4)(b)
of
the
Federal
Court
Act,
which
runs:
(4)
The
Trial
division
has
concurrent
original
jurisdiction
(b)
in
proceedings
in
which
relief
is
sought
against
any
person
for
anything
done
or
omitted
to
be
done
in
the
performance
of
his
duties
as
an
officer
or
servant
of
the
Crown.
In
paragraph
18
of
the
statement
of
defence
(Amended
record:
p.
16)
the
defendant
(hereinafter
also:
The
Minister)
submits
that
the
plaintiff
(hereinafter
also:
Vanguard)
cannot
legally
invoke
section
17
of
the
Federal
Court
Act,
and
the
Minister’s
counsel
specifically
asserts
(Transcript:
pp.
76
&
77)
that
paragraph
17(4)(b)
is
quite
inapplicable
here.
The
plaintiff’s
counsel
makes
no
reply,
but
agrees
that
nothing
turns
on
it
because
of
the
nature
of
the
relief
sought.
The
Minister's
counsel,
in
support
of
his
motion
to
strike
this
alleged
basis
of
relief,
cites
Minister
of
Industry,
Trade
&
Commerce
v.
Allis-Chalmers
Canada
Ltd.
a
unanimous
judgment
of
the
Quebec
Court
of
Appeal
written
by
Mr.
Justice
Kaufman
as
reported
in
77
D.L.R.
(3d)
633.
That
reasoning
is
quite
consonant
with
the
reasoning
expressed
by
Chief
Justice
Thurlow
for
the
Appeal
Division
of
this
Court
in
Canadian
Saltfish
Corporation
v.
Rasmussen,
Breau
and
The
Queen
(A-276-85
—
July
3,
1986)
in
which
he
wrote:
.
.
.
there
is
federal
law
to
support
the
jurisdiction
of
the
Court,
but
.
.
.
the
only
jurisdiction
of
this
Court
..
.
is
that
conferred
by
the
section
17
of
the
Federal
Court
Act
which,
as
I
have
already
indicated,
does
not
authorize
an
action
against
an
agency
of
the
Crown
but
only
against
the
Crown
eo
nomine.
It
is
not
at
all
clearly
demonstrated
in
the
case
at
bar
that
the
Minister's
status
is
that
of
an
agent,
officer
or
servant
of
the
Crown.
Rather,
it
is
that
of
an
agent
of
the
legislature
for
the
performance
of
a
specific
duty
imposed
by
statute.
What
is
clear
is
that
if
the
Minister’s
acts
were
to
attract
liability
under
paragraph
17(4)(b)
it
would
be
liability
created
by
the
Crown
Liability
Act,
in
the
Crown's
own
name.
That
is
not
the
case
here.
The
apparent
promise
of
paragraph
17(4)(b)
among
other
provisions
of
that
section
is
modified
and
qualified
by
the
manner
in
which
Parliament
provides
for
liability
of
the
Crown
for
the
misdeeds
of
Crown
servants.
The
plaintiff's
action
in
so
far
as
it
is
based
upon
section
17
of
the
Federal
Court
Act
is,
in
these
particular
circumstances,
dismissed,
for
want
of
the
appropriate
defendant.
No
tort
is
here
alleged
against
the
Minister,
in
any
event.
The
plaintiff's
counsel
made
no
resolute
response
to
the
defendant's
motion
for
dismissal
of
the
claim
in
this
regard
(Transcript:
p.
78).
Through
their
respective
counsel,
the
parties,
for
the
purposes
of
this
action
only,
most
helpfully
agree
that
the
basic
facts
are
expressed
in
a
statement
received
as
Exhibit
A.
That
statement,
in
turn,
refers
to
other
exhibits
tendered
in
numerical
sequence,
1
through
14
and
presented
in
a
ring
binder.
The
Court
could
hardly
make
more
accurate
and
precise
findings
of
fact
than
those
upon
which
the
parties
are
agreed
for
the
purposes
of
this
action.
They
are
as
follows:
1.
The
Plaintiff
is
a
body
corporate
duly
incorporated
pursuant
to
the
laws
of
the
Province
of
British
Columbia.
The
Plaintiff
was
incorporated
in
July
of
1981.
Reasons
for
incorporation
were
provided
to
Revenue
Canada.
At
all
material
times
the
Plaintiff
was
engaged
in
the
business
of
manufacturing
finishing
paint
products
applied
by
brush,
including
clears,
stains
and
enamels
(Exhibit
1).
2.
The
Plaintiff
is
a
licensed
manufacturer
under
the
Excise
Tax
Act
(Exhibit
2).
3.
Although
the
Plaintiff
solicited
orders
from
other
customers
all
of
the
products
manufactured
by
it,
with
the
exception
of
2,000
gallons
sold
to
one
customer,
were
sold
to
Flecto
Coatings
Ltd.
(“Flecto”)
which
constituted
less
than
2%
of
the
Plaintiffs
manufactured
products
(Exhibit
3).
4.
The
Plaintiff
remitted
sales
tax
every
month
on
all
sales
of
such
products
as
required
by
section
50
of
the
Excise
Tax
Act.
The
tax
remitted
was
based
on
the
manufacturers
selling
price
in
accordance
with
section
27
of
the
Act.
5.
The
Plaintiff
is
wholly
owned
by
Flecto
which,
for
the
period
August
to
December,
1981
(period
of
time
of
fair
price
determination)
and
thereafter
carried
on
business
as
a
distributor
of
said
goods
purchased
from
the
Plaintiff
and
of
similar
paint
in
aerosol
cans
manufactured
by
independent
third
parties
(Exhibit
4).
6.
Prior
to
the
incorporation
of
the
Plaintiff
in
1981
Flecto
purchased
under
contract
the
bulk
of
its
brush
paint
goods
from
Bate
Chemical,
Reichold
Chemical
and
KG
Packaging
as
well
as
purchased
all
of
its
aerosol
paint
products
from
KG
Packaging.
Subsequent
to
the
incorporation
of
the
Plaintiff,
the
Plaintiff
purchased
all
of
its
aerosol
paint
products
from
Spray-On
(Exhibit
5).
7.
For
several
years
Flecto
was
considered
by
the
Minister
of
National
Revenue
(the
“Minister”)
to
be
a
distributor
of
the
brush
paint
goods
in
issue
manufactured
by
others
and
sold
in
bulk
to
Flecto.
On
January
1,
1981
the
Excise
Tax
Act
was
amended
to
alter
the
definition
of
marginal
manufacturing
such
that
Flecto
was
considered
by
Revenue
Canada
and
paid
sales
tax
as
a
deemed
manufacturer
of
the
brush
paint
goods
in
issue.
8.
After
incorporation
of
the
Plaintiff,
Flecto
purchased
under
written
contract
all
said
brush
paint
products
from
the
Plaintiff
at
a
price
based
on
the
formula
set
out
in
Exhibit
6.
During
the
four
month
period
August
to
December,
1981,
inclusive
Flecto
purchased
the
brush
paint
products
in
issue
from
the
Plaintiff
at
a
price
equivalent
to
a
cost
calculated
by
the
Plaintiff
plus
25%
markup.
9.
Flecto,
at
all
material
times,
in
turn,
sold
all
of
the
said
products
that
it
distributed
to
five
wholesale
companies
situated
in
Canada.
10.
By
letter
dated
October
16,
1981
from
Revenue
Canada,
Excise
Branch,
Pacific
Region,
the
Plaintiff
was
advised
of
a
proposal
regarding
“fair
price
for
tax”
(Exhibit
7).
11.
The
Plaintiff
was
advised
by
letter
dated
May
5,
1982
from
Revenue
Canada
of
the
amount
of
tax
and
penalty
owing
for
the
period
August
1,
1981
to
December
31,
1981
(Exhibit
8).
12.
The
Plaintiff,
by
letter
dated
May
14,
1982,
objected
to
the
said
proposal
regarding
fair
price
(Exhibit
9).
13.
Further
submissions
were
made
by
the
Plaintiff
to
Revenue
Canada,
Excise
Branch
Pacific
Region
and
further
correspondence
was
received
by
the
Plaintiff
from
that
office
(Exhibit
10).
14.
The
Plaintiff
was
given
full
opportunity
to
make
submissions
to
the
Minister
regarding
the
proposal
to
make
a
determination
of
fair
price
under
section
34
of
the
Excise
Tax
Act
and
in
fact
numerous
submissions
were
made
to
the
Minister
regarding
competitors
(including
imported
goods),
the
definition
of
what
constitutes
“the
industry”
and
marketing
levels
(Exhibit
11).
15.
Acting
under
section
34
of
the
Excise
Tax
Act
and
on
the
advice
of
his
Deputy
Minister
the
Minister,
on
October
27,
1983,
made
a
determination
that
the
“fair
price”
of
said
brush
goods
manufactured
by
the
Plaintiff
and
sold
to
Flecto
during
the
period
August
to
December
1981
was
Flecto’s
selling
price
to
the
said
wholesalers
less
allowable
discounts
or
deductions
in
accordance
with
ET
memoranda
and
other
policy.
The
determination
of
the
Minister
and
his
stated
reasons
therefor
are
set
out
in
Exhibit
12.
16.
In
arriving
at
his
decision,
the
Minister
did
not
compare
prices
of
similar
products
sold
by
other
manufacturers
in
Canada
and
did
not
audit
the
Plaintiff’s
cost
of
sales,
mark-up
and
profit
margin.
The
Minister
did
not
consider
relevant
to
his
determination
the
Plaintiff’s
calculation
of
sales
price
based
on
the
cost
plus
percentage
markup
formula.
The
Minister
did
consider
as
relevant
the
volume
and
sales
levels
of
other
manufacturers
in
relation
to
a
distributor
level
and
the
determination
of
the
existence
of
a
distributor
level.
17.
With
respect
to
the
existence
of
a
distributor
level
the
Minister
conducted
a
survey
of
the
industry.
The
Plaintiff
has
not
seen
this
survey
although
an
application
was
made
to
this
Honourable
Court
in
Chambers
for
disclosure
of
same
as
part
of
the
discovery
process.
The
Minister
considered
that
this
was
a
specified
public
interest
within
the
meaning
of
section
36.1
of
the
Canada
Evidence
Act
which
position
was
accepted
by
the
Honourable
Chambers
Judge.
18.
The
Minister’s
said
determination
of
fair
price
was
based
on
“tax
equity”
and
to
prevent
an
“unfair
advantage”
in
the
industry.
19.
Although
the
Minister
was
made
aware
of
certain
facts
regarding
the
period
of
time
prior
and
subsequent
to
the
fair
price
determination
period
such
facts
were
not
considered
relevant
by
the
Minister.
This
is
because
the
Minister
has
considered
that
“fair
price
determinations
are
established
on
the
conditions
that
prevail
during
the
period
of
the
determination
and
not
some
past
or
future
conditions
or
circumstances”.
20.
There
are
no
regulations
regarding
the
delegation
of
the
Minister’s
power
under
section
34
of
the
Act.
In
this
case
the
Minister
himself
made
the
subject
determination
of
fair
price.
21.
There
are
no
definitive
guidelines
or
criteria
for
the
Minister
as
to
what
he
is
to
consider
when
making
a
determination
of
fair
price.
The
Minister,
however,
with
respect
to
marketing
levels,
has
adopted
a
general
guideline
that
15%
of
the
sales
in
an
industry
should
be
to
an
independent
distribution
system
before
a
distribution
level
can
be
considered
to
exist
for
the
purposes
of
the
Excise
Tax
Act.
Since,
however,
each
case
depends
upon
its
own
facts
the
15%
requirement
may
not
always
be
necessary
and
in
a
specific
fair
price
situation
10%
or
sometimes
less
to
independents
may
be
representative
after
all
competitive
circumstances
are
considered
(Exhibit
13).
22.
After
making
the
said
fair
price
determination
the
Department
of
National
Revenue,
Excise
Branch,
advised
the
Plaintiff
in
writing
of
the
amount
owing
for
the
period
August
to
December
of
1981
and
demanded
payment
(Exhibit
14).
23.
Since
the
Plaintiff
commenced
litigation
disputing
the
said
fair
price
determination
the
Minister
agreed
to
refrain
from
taking
execution
proceedings
and
no
such
execution
proceedings
have
in
fact
been
taken.
24.
The
Plaintiff
disagrees
with
the
Minister
on
the
facts
relating
to
the
nature
of
the
business,
what
constitutes
the
industry,
what
constitutes
similar
products
and
similar
packaging
and
the
marketing
levels
for
the
said
products.
25.
Flecto,
since
1981,
has
continued
to
purchase
the
aforesaid
brush
goods
from
the
Plaintiff,
however,
no
further
determinations
of
“fair
price"
have
been
made
by
the
Minister
pending
this
appeal
with
respect
to
all
or
any
part
of
the
period
of
time
since
January
1,
1982
to
date.
In
contrast
to
the
orderliness
of
the
presentation
of
the
agreed
facts
and
exhibits,
the
parties'
levying
of
issues
and
claims
against
each
other
fulminates
in
the
amended
pleadings,
especially
the
statement
of
claim,
rather
like
grapeshot
from
the
muzzle
of
an
ancient
smoothbore
cannon.
Having
claimed
a
variety
of
remedies
—
injunction,
certiorari,
and
declarations
—
the
plaintiff
quite
correctly
proceeds,
not
by
way
of
motion,
but
by
that
higher,
less
summary,
order
of
proceeding,
an
action
within
the
meaning
of
Rule
2.
According
to
the
practice
of
this
Court
and
the
relevant
jurisprudence,
one
seeks
injunctions
and
declarations
only
in
an
action;
and
while
certiorari
is
ordinarily
sought
by
application,
it
may
also
be
sought
in
an
action.
In
paragraph
22
of
the
further
amended
statement
of
claim,
and
in
paragraph
10
of
the
further
amended
statement
of
defence,
is
the
issue
of
whether
or
not
the
Minister
is
exigible
to
certiorari
pursuant
to
section
18
of
the
Federal
Court
Act.
Is
the
Minister's
Action
Pursuant
to
Sec.
34
Judicially
Reviewable?
One
does
not
have
to
resort
to
the
principles
enunciated
in
Roncarelli
v.
Duplessis,
[1959]
S.C.R.
121;
16
D.L.R.
(2d)
689,
cited
for
the
plaintiff,
in
order
to
affirm
that
the
Minister
is
exigible
to
judicial
review
in
this
instance.
Invocation
of
the
power
“to
determine
the
fair
price"
conferred
by
section
34
assimilates
the
Minister
into
a
“federal
board,
commission
or
other
tribunal"
defined
in
section
2
of
the
Federal
Court
Act.
That
is
so,
because
the
Minister
is
a
“person
.
..
having,
exercising
or
purporting
to
exercise
jurisdiction
or
powers
conferred
by
or
under
an
Act
of
the
Parliament
of
Canada",
that
is,
the
Excise
Tax
Act.
The
Minister's
first
action
under
section
34,
an
exercise
of
judgment,
does
not
directly
impinge
on
anyone's
rights,
business
or
fortune.
The
provision
makes
it
the
Minister's
business
to
judge
whether
goods
subject
to
tax
are
sold
for
less
than
the
fair
price
on
which
the
tax
should
be
imposed.
Once
the
Minister
has
made
that
judgment,
he
may
determine
what
he
considers
the
fair
price
is,
or
would
be,
and
(it
is
implied)
so
inform
the
taxpayer
who
is
thereupon
commanded
by
Parliament
to
pay
tax
on
the
price
so
determined.
There
is
an
old
adage
in
discussions
of
parliamentary
supremacy,
to
the
effect
that
a
sovereign
parliament
can,
by
legislative
enactment,
do
anything
on
Earth
except
turn
a
woman
into
a
man,
and
vice
versa.
Here
Parliament,
supreme
as
it
is
in
this
field,
enacts
that,
despite
the
real
price
at
which
the
taxable
goods
are
in
fact
sold,
the
Minister
in
the
exercise
of
his
judgment
and
determination
ipso
facto
dictates
the
fair
price.
There
is
no
appeal
under
the
Act
as
it
stood
at
all
material
times.
Equally,
there
are
no
regulations
made
pursuant
to
section
34
to
apply
in
these
circumstances.
According
to
counsel
on
both
sides
there
is
only
one
decided
case
of
which
section
34
was
the
subject
of
discussion.
That
case
is
The
King
v.
Noxzema
Chemical
Company
of
Canada,
Limited,
reported
at
first
instance
at
[1941]
Ex.
C.R.
155;
[1940-41]
C.T.C.
242;
2
D.T.C.
519,
and
on
appeal
at
[1942]
S.C.R.
178;
[1942]
C.T.C.
21;
2
D.T.C.
542.
In
those
days,
the
legislative
provisions
which
is
now
section
34
of
the
Excise
Tax
Act
went
almost
word
for
word
under
the
designation
of
section
98
of
the
Special
War
Revenue
Act,
which
was
the
provision
construed
in
that
case.
Although
in
the
unanimous
Supreme
Court
in
the
Noxzema
appeal
two
concurring
opinions
were
written,
neither
differed
by
a
hair's
breadth
in
defining
the
Minister's
powers
as
being
purely
administrative.
Among
the
reasons
of
the
majority,
with
whom
the
minority
concurred,
Mr.
Justice
Kerwin,
wrote
(S.C.R.
186;
C.T.C.
28;
D.T.C.
546):
.
..
his
jurisdiction
under
section
98
was
dependent
only
upon
his
judgment
that
the
goods
were
sold
at
a
price
which
was
less,
—
not,
be
it
noted,
less
than
what
would
be
a
fair
price
commercially
or
in
view
of
competition
or
the
lack
of
it,
—
but
less
than
what
he
considered
was
the
fair
price
on
which
the
taxes
should
be
imposed.
The
legislature
has
left
the
determination
of
that
matter
and
also
of
the
fair
prices
on
which
the
taxes
should
be
imposed
to
the
Minister
and
not
to
the
court.
In
my
view,
section
98
confers
upon
the
Minister
an
administrative
duty
which
he
exercised
and
as
to
which
there
is
no
appeal.
It
might
be
added
that,
in
those
days
also,
the
administrative
act
of
the
Minister
was
not
open
to
review
by
any
Court.
Such
is
not
the
case
in
these
days.
A
new
era
of
judicial
review
was
ushered
into
historical
reality
by
the
pronouncements
of
the
Supreme
Court
of
Canada
in
Nicholson
v.
Haldimand-Norfolk
Regional
Board
of
Commissioners
of
Police,
[1979]
1
S.C.R.
311;
88
D.L.R.
(3d)
671,
and
in
Martineau
v.
Matsqui
Institution
Disciplinary
Board,
[1980]
1
S.C.R.
602;
106
D.
L.R.
(3d)
385.
Further,
in
this
Court's
Appeal
Division,
in
the
case
of
M.N.R.
et
al.
v.
Kruger
Inc.
et
al.,
[1984]
2
F.C.
535;
[1984]
C.T.C.
506,
Mr.
Justice
Pratte,
writing
for
the
majority,
held
(at
F.C.
544;
C.T.C.
509):
Violation
of
natural
justice
(in
the
case
of
judicial
or
quasi-judicial
decisions)
and
lack
of
procedural
fairness
(in
the
case
of
administrative
decisions)
are
merely
grounds
on
which
certiorari
may
issue;
but
it
may
also
issue
on
other
grounds,
irrespective
of
the
judicial
or
administrative
character
of
the
decision
under
attack,
namely,
lack
of
jurisdiction
and
error
of
law
on
the
face
of
the
record.
Once
it
is
accepted,
as
it
must
be
since
the
decisions
of
the
Supreme
Court
of
Canada
in
Nicholson
(supra),
and
Martineau
(supra),
that
purely
administrative
decisions
are
no
longer
immune
from
certiorari,
it
follows,
in
my
view,
that
those
decisions
may
be
quashed
by
certiorari
not
only,
in
appropriate
cases,
for
lack
of
procedural
fairness
but
also
for
lack
of
jurisdiction
and
error
of
law
on
the
face
of
the
record.
I
therefore
conclude
that,
contrary
to
what
was
argued
on
behalf
of
the
appellants,
the
fact
that
the
authorization
of
the
Minister
was
a
purely
administrative
act
which
was
not
subject
to
the
rules
of
procedural
fairness
did
not
preclude
the
issuance
of
certiorari.
The
dissenting
judge
in
that
Kruger
case
agreed
on
the
above
point
of
law
and
so,
it
is
evident
that
the
judgment
of
the
Appeal
Division
rests
unanimous
in
this
regard.
Leave
to
appeal
to
the
Supreme
Court
of
Canada
was
refused,
[1985]
2
S.C.R.
viii.
Accordingly
the
Court
holds,
once
again,
that
the
Minister’s
action
in
discharging
a
purely
administrative
function,
here
pursuant
to
section
34
of
the
Excise
Tax
Act,
is
indeed
judicially
reviewable
and
liable
to
be
quashed
by
certiorari,
pursuant
to
section
18
of
the
Federal
Court
Act.
These
reasons
proceed
on
that
basis.
Does
the
Granting
of
the
Minister's
Authority
Expressed
in
Sec.
34
Constitute
an
Unconditional
Delegation
of
the
Power
to
Legislate?
Here
one
receives
the
impression
that
the
plaintiff,
as
it
is
perfectly
entitled
to
do
in
our
free
and
democratic
society,
is
raising
the
old,
honourable
and
quintessentially
bourgeois
banner
of
"no
taxation
without
representation".
That
slogan
was
not
expressed
in
so
many
words
by
the
plaintiff’s
counsel,
but
he
complains
that
the
legislation
accords
to
the
Minister
the
unlimited
power
to
tax
the
plaintiff,
or
anyone
in
the
plaintiff’s
situation.
(Transcript:
pp.
284
and
286.)
This
is
not
an
instance
of
indirect
delegation,
that
is,
someone
acting
under
regulations
made
by
someone
else
so
authorized
by
the
legislature.
This
is
an
instance
of
direct
delegation,
in
that
the
Minister's
judgment
about
the
price
really
charged
and
his
determination
of
the
fair
price
are
the
very
actions
which
Parliament
directly,
and
without
intermediary,
authorizes
the
Minister
to
perform.
This
is
a
prototype
or
primary
type
of
delegation.
There
was
developed
from
this
type
of
delegation,
when
ministers
became
too
busy
with
the
increasing
scope
of
regulatory
laws
passed
by
the
legislatures,
or
the
nature
of
the
regulation
became
too
technical
or
complex,
the
more
sophisticated
or
complex
forms
of
legislation
creating
a
regulatory
tribunal
operating
according
to
statutory
directions
and
subordinate
regulations.
From
Hodge
v.
The
Queen,
(1883-84),
9
A.C.
117,
through
In
Re
Grey,
(1918),
57
S.C.R.
150,
to
Shannon
v.
Lower
Mainland
Dairy
Products
Board,
[1938]
A.C.
708
at
722,
there
is
no
constitutional
or
other
legal
impediment
to
the
delegation
by
Parliament
of
the
purely
administrative
power
defined
in
section
34
of
the
Excise
Tax
Act.
That
it
would
have
been
more
seemly
to
hedge
the
power
about
with
directives
and
objective
criteria
for
its
due
exercise,
to
provide,
or
designate,
a
tribunal
to
exercise
the
power,
or
to
provide
at
least
one
substantive
appeal,
cannot
derogate
from
the
basic
constitutionality
of
this
primitive
form
of
delegation.
The
plaintiff
argues
that
the
unhedged
extent
of
the
power
accorded
to
the
Minister
amounts
to
its
abdication
or
abandonment
by
Parliament.
Unrestrained
as
it
is,
except
latterly
by
judicial
review,
it
does
go
about
as
far
as
it
ought
to
go.
After
all
this
delegation
of
power
has
no
connotation
of
national
emergency
or
other
urgency.
It
is
quite
ordinary,
being
a
provision
for
the
raising,
or
securing,
of
revenue.
It
is
true
that
Parliament
has
quies-
cently
left
this
power
in
the
hands
of
succeeding
Ministers
for
decades,
now.
Since
the
Noxzema
case
no
jurisprudence
has
apparently
been
generated;
but
that
is
not
surprising
(transcript:
p.
182)
because,
firstly,
no
appeal
has
ever
been
provided,
(until
this
year’s
amendments
enacted
after
the
material
times),
and,
secondly,
judicial
review
in
the
circumstances
is
of
relatively
recent
availability.
The
Minister’s
power
operates
only
indirectly
to
levy
tax,
but
directly
to
define
the
tax
base.
This
delegation
of
power
to
determine
what
may
well
be
an
absolutely
fictitiously
"fair”
price
passes
the
test
of
delegated
legislation,
but,
since
the
Minister
is
‘“‘a
federal
board,
commission
or
other
tribunal”
in
his
wielding
of
delegated
federal
State
power
he
must
manifest
full
but
not
excessive
jurisdiction,
fairness
and
adherence
to
the
law.
However,
the
availability
of
judicial
review
will
be
of
small
consolation
to
the
taxpayer
whose
only,
but
still
highly
significant,
complaint
is
that
the
Minister
is
just
plainly
wrong
in
his
determination
of
"the
fair
price
on
which
the
tax
should
be
imposed”.
That
—
an
awfully
subjective
criterion
—
could
be
the
subject
of
a
substantive
appeal
if
there
were
provision
for
one,
but
the
Minister’s
being
"merely”
wrong
does
not
guarantee
relief
by
judicial
review
if
the
Minister
exercises
his
power
in
an
unexceptionably
lawful
and
procedurally
fair
manner.
Perhaps
committees
of
either
House
of
Parliament
do
not
review
the
Minister’s
stewardship
of
his
delegated
power
under
section
34
of
the
Excise
Tax
Act
so
often
or
so
regularly,
if
at
all,
as
they
review
the
performance
of
the
independent
administrative
agencies.
Nevertheless,
the
unhedged,
primitive
delegation
of
power
to
the
Minister
is
highly
similar,
in
a
constitutional
or
other
legal
sense,
to
Parliament’s
qualified
and
sophisticated
delegations
of
power
to
the
Canadian
Radio-Television
and
Telecommunications
Commission
or
the
National
Energy
Board.
The
latter
two
tribunals
are
judicially
reviewable
pursuant
to
section
28
of
the
Federal
Court
Act,
and
the
avenue
for
judicial
review
of
the
Minister’s
exercise
of
his
power
is
section
18,
but
the
respective
delegations
of
power
are
basically
indistinguishable.
There
is,
then,
nothing
unlawful
about
the
delegation
of
power,
raw
as
it
is,
in
section
34
of
the
Federal
Court
Act.
Does
Sec.
34
Offend
any
Provisions
of
the
Charter?
The
plaintiff’s
remaining
complaints
of
Charter
violation
are
expressed
in
regard
to
the
preamble,
section
1,
section
7,
section
8,
section
12
and
section
26
of
the
Canadian
Charter
of
Rights
and
Freedoms.
In
fact,
dealing
with
those
provisions
in
reverse
order
offers
a
not
illogical
sequence
Section
26:
The
guarantee
in
this
Charter
of
certain
rights
and
freedoms
shall
not
be
construed
as
denying
the
existence
of
any
other
rights
or
freedoms
that
exist
in
Canada.
Here
Vanguard
is
quite
secure
for
the
prerogative
writs,
the
availability
of
an
action
for
declaration,
the
review
of
the
Minister’s
conduct
here,
all
among
the
rights
or
freedoms
which
existed
in
Canada
before
the
proclamation
of
the
Charter,
still
exist,
and
are
not
being
denied
to
Vanguard
in
these
proceedings.
Every
right
or
freedom
which
it
asserts
is
being
adjudicated,
but
that
circumstance
will
still
not
accord
Vanguard
a
right
of
substantive
appeal
because
this
Court
cannot
enact
that
which
Parliament
has
regrettably
declined
to
provide,
prior
to
the
recent
amendments.
Section
12:
Everyone
has
the
right
not
to
be
subjected
to
any
cruel
and
unusual
treatment
or
punishment.
Vanguard
is
certainly
not
threatened
with
any
cruel
and
unusual
punishment.
Sooner
or
later
if
it
does
not
pay
the
taxes
generated
by
the
augmented
base
which
the
Minister
has
determined
and
created,
it
will
probably
face
the
usual
punishment
imposed
upon
all
corporations
which
neglect
or
fail
to
pay
excise
tax.
That
prospect
does
not
render
section
34
of
the
Excise
Tax
Act
invalid.
Nor
is
Vanguard
being
subjected
to
any
cruel
and
unusual
treatment,
the
scope
of
which,
in
any
event,
is
much
narrower
in
the
case
of
a
corporation
than
in
the
case
of
an
individual
human
person.
The
adjective
“cruel”
can
hardly
apply
to
the
treatment
or
punishment
of
an
imaginary
entity
for
it
evokes
connotations
of
inhumanity.
Nothing
in
these
proceedings
demonstrates
any
unusual
treatment
of
Vanguard.
Section
8:
Everyone
has
the
right
to
be
secure
against
unreasonable
search
or
seizure.
Vanguard
contends
that
section
34
has
the
effect
of
inflicting
upon
it
an
unreasonable
seizure
and,
therefore,
violates
its
right
to
security
against
such
seizure.
Because
this
right
of
security
is
guaranteed
to
“everyone”
it
is
apparently
conferred
upon
corporations
as
well
as
individual
human
persons.
So
it
was
held
in
Balderstone
v.
R.
and
A.
G.
of
Manitoba;
Play-all
Ltd.,
Nellis
and
Bricker
v.
Att'y
Gen'l
of
Manitoba
and
R.,
[1983]
1
W.W.R.
72;
19
Man.
R.
(2d)
321
(Man.
Q.B.),
affirmed
on
other
grounds
[1983]
6
W.W.R.
438;
23
Man.
R.
(2d)
125
(Man.
C.A.),
and
also
followed
in
this
Court
by
Strayer,
J.
in
Smith,
Kline
&
French
v.
Att'y
Gen'l
of
Canada,
[1986]
1
F.C.
274.
Accordingly,
the
plaintiff
is
entitled
to
resort
to
section
8
of
the
Charter
for
such
as
it
may
avail
the
plaintiff.
It
avails
the
plaintiff
nothing
in
fact.
Neither
the
defendant
Minister
nor
yet
any
of
the
departmental
officials
has
raided
the
plaintiff’s
cash
box
or
purported
to
garnish
the
plaintiff’s
bank
accounts,
with
or
without
judicial
authorization.
Making
a
determination
of
a
“fair
price”
under
section
34
of
the
Excise
Tax
Act
is
sufficiently
similar
to
making
an
assessment,
which
renders
the
plaintiff
liable
to
pay
income
tax,
that
both
must
stand
or
fall
in
regard
to
security
“against
unreasonable
.
.
.
seizure”.
Thus,
where
the
Minister
finds
that
less
than
all
taxable
income
has
been
reported
he
may
audit
the
taxpayer,
determine
what
is
the
full
amount
of
taxable
income
and
demand
payment
of
tax
on
the
income
which
the
Minister
determines
to
be
the
full
amount
of
taxable
income.
To
that
point,
the
point
in
effect
at
which
the
parties
have
arrived
in
the
case
at
bar,
even
if
the
taxpayer
pays
over
all
of
the
tax
demanded,
there
is
no
seizure
within
the
meaning
of
section
8
of
the
Charter.
Here
to
be
sure
there
is
no
right
of
substantive
appeal
(or,
there
was
none
until
recently)
as
there
is
in
relation
to
income
tax.
Vanguard’s
counsel
asserts
that
section
34
provides
an
unbridled
power
“to
take
away
in
an
unlimited
fashion
a
person’s
property
or
indeed
the
potential
to
do
that
without
some
form
of
compensation
or
at
least
some
form
of
review
of
objective
guidelines.
Because
anybody’s
ability
to
conduct
their
affairs
in
that
kind
of
situation
would
clearly
be
threatened.”
The
absence
of
a
right
of
substantive
appeal
(as
distinct
from
judicial
review
which,
as
already
noted,
is
accessible)
is
not
a
basis
upon
which
to
strike
down
section
34.
Taxation,
despite
conventional
wisdom,
humour
and
mythology,
is
not
seizure.
Not
even
taxation
at
confiscatory
rates
is
what
is
contemplated
in
section
8
of
the
Charter.
Enforcement
of
payment
of
the
exacted
tax
may
certainly
involve
“seizure”
as
that
term
is
employed
in
the
Charter,
especially
garnishment
or
the
levying
of
distress
against
the
company’s
assets.
Section
34
no
more
effects
a
seizure
than
does
any
other
provision
of
law
whereby
tax
may
be
determined
and
demanded
by
either
the
legislature
or
its
delegate.
Finally,
one
must
note
which
forms
of
security
are
not
guaranteed
by
section
8
of
the
Charter.
They
are,
among
others,
security
against
confiscation,
against
unreasonable
appropriation
or
expropriation
and,
to
be
sure,
against
unreasonable
taxation.
Security
against
unreasonable
seizure
does
not
comprehend
the
kinds
of
security
of
property
rights
mentioned
above.
Accordingly,
section
8
of
the
Charter
in
and
of
itself
affords
no
remedy
for
Vanguard’s
complaint
and
plight.
Section
7:
Everyone
has
the
right
to
life,
liberty
and
security
of
the
person
and
the
right
not
to
be
deprived
thereof
except
in
accordance
with
the
principles
of
fundamental
justice.
Because
this
right,
or
these
rights,
is
conferred
on
“everyone”
Vanguard
is
also
entitled
to
resort
to
section
7
of
the
Charter
for
such
as
it
may
avail.
Here,
also,
it
avails
naught.
Section
34
of
the
Excise
Tax
Act
is
hardly
engaged
by
“‘life,
liberty
and
security
of
the
person”,
and
certainly
not
in
the
context
of
a
corporate
complainant.
Important
and
unpleasant
as
taxation
may
be
to
taxpayers
at
large
and
the
plaintiff
in
particular,
in
ordinary
circumstances
as
these
are,
taxation,
for
all
the
arcane
erudition
and
energy
which
are
invested
in
the
subject,
simply
pales
in
importance
when
compared
with
the
truly
momentous
subjects
of
“life,
liberty
and
security
of
the
person”.
In
this
regard,
then,
the
Court
adopts
and
ratifies
what
was
written
by
Mr.
Justice
Strayer
in
the
Smith,
Kline
&
French
case,
earlier
mentioned
(at
313):
.
.
.
In
my
view
the
concept
of
“life,
liberty
and
security
of
the
person”
take
on
a
colouration
by
association
with
each
other
and
have
to
do
with
the
bodily
wellbeing
of
a
natural
person.
As
such
they
are
not
apt
to
describe
any
rights
of
a
corporation
nor
are
they
apt
to
describe
purely
economic
interests
of
a
natural
person.
I
have
not
been
referred
to
any
authority
which
requires
me
to
hold
otherwise.
Strayer,
J.
further
wrote
(at
314-15)
in
that
case:
In
so
construing
“liberty”
and
“security
of
the
person”
I
adopt
the
view
expressed
by
Pratte
J.
in
R.
v.
Operation
Dismantle
Inc.,
[1983]
1
F.C.
745
(C.A.),
at
page
752
to
the
effect
that
these
terms
refer
to
freedom
from
arbitrary
arrest
or
detention,
which
views
I
also
similarly
adopted
in
my
decision
in
Le
groupe
des
éleveurs
de
volailles
de
l'est
de
l'Ontario
v.
Canadian
Chicken
Marketing
Agency,
[1985]
1
F.C.
280;
(1984)
14
D.L.R.
(4th)
151
(T.D.),
at
page
323
F.C.;
181
D.L.R.
See
also
to
the
same
effect,
Public
Service
Alliance
of
Canada
v.
The
Queen,
[1984]
2
F.C.
562;
11
D.L.R.
(4th)
337
(T.D.)
(affirmed
[1984]
2
F.C.
889;
11
D.L.R.
(4th)
387
(C.A.),
without
reference
to
this
point);
Re
Becker
and
The
Queen
in
right
of
Alberta
(1983),
148
D.L.R.
(3d)
539
(Alta.
C.A.),
at
pages
544-545.
With
respect
to
the
contention
that
property
rights
are
implicitly
protected
by
section
7,
this
possibility
is
equally
precluded
by
my
characterization
of
the
words
“life,
liberty
and
security
of
the
person”.
While
there
may
be
some
situations
in
which
section
7
would
protect,
incidentally,
the
property
of
an
individual,
I
can
see
no
way
in
which
the
patent
rights
of
an
inventor
or
multinational
corporate
patentee
could
be
said
to
be
incidentally
involved
in
the
protection
of
the
bodily
integrity
of
anyone.
Further
it
is
well
known
that
an
amendment
specifically
to
include
“property”
in
the
protection
of
section
7
was
withdrawn
during
the
con-
sideration
of
the
Charter
by
the
Joint
Parliamentary
Committee
on
the
Constitution.
This
indicates
that
at
least
in
its
origins
section
7
was
not
understood
to
provide
protection
for
property.
As
I
have
concluded
that
no
interest
protected
by
section
7
is
relevant
to
the
claim
of
the
plaintiffs
here
I
need
not
consider
whether
there
has
been
a
denial
of
the
principles
of
fundamental
justice.
In
the
same
plane,
there
is
no
way
in
which
the
rights
of
a
taxpayer,
individual
or
corporate,
could
be
said
to
be
involved
in
the
protection
of
anyone's
bodily
integrity.
Accordingly,
no
interest
protected
by
section
7
of
the
Charter
is
relevant
to
Vanguard’s
claim
here,
and
the
Court
does
not
need
to
consider
whether
or
not
any
principles
of
fundamental
justice
have
been
denied.
Section
1:
The
Canadian
Charter
of
Rights
and
Freedoms
guarantees
the
rights
and
freedoms
set
out
in
it
subject
only
to
such
reasonable
limits
prescribed
by
law
as
can
be
demonstrably
justified
in
a
free
and
democratic
society.
The
Court
does
not
need
to
consider
section
1,
because
none
of
the
invoked
rights
is
engaged
by
the
plaintiff’s
circumstances.
No
limits
are
imposed
on
any
guaranteed
rights
because
none
of
the
guaranteed
rights
is
operative
in
this
case.
Preamble:
Whereas
Canada
is
founded
upon
principles
that
recognize
the
supremacy
of
God
and
the
rule
of
law;
This
statement
is
of
wider
import
than
the
Charter
which
follows
it.
This
statement
is
a
constitutionally
entrenched
description
of
Canada.
Every
aspect
of
public
law
in
Canada
engages,
and
is
engaged
by,
the
preamble
to
the
Charter.
It
is
broad
in
scope
and
is
not
stated
to
be
limited
to,
or
for,
purposes
of
the
Charter
only.
The
supremacy
of
God
and
the
rule
of
law
are
set
upon
equal
pedestals
and
equally
revered.
That
circumstance
renders
Canada,
by
constitutional
description,
less
secular
than
it
was
before
April
17,
1982,
but
no
less
permeated
with
the
rule
of
law.
One
of
the
other
original
preambles
states
that
the
founding
provinces
desired
“to
be
federally
united
into
One
Dominion
under
the
Crown
of
the
United
Kingdom
of
Great
Britain
and
Ireland,
with
a
Constitution
similar
in
Principle
to
that
of
the
United
Kingdom",
and
that
means
that
the
rule
of
law,
described
so
lucidly
by
the
late
Professor
A.
V.
Dicey,
K.C.,
is
an
original,
rightful
resident
in
our
Constitution.
Dicey’s
description
will
be
reviewed
later
in
these
reasons.
Section
26
of
the
Charter,
already
noted,
is
also
by
its
nature
descriptive
of
Canada
and
of
broader
import
than
the
enunciated
rights
and
freedoms
among
which
it
is
placed.
Section
26,
then,
confirms
all
rights
and
freedoms
which
have
long
been
imparted
by
the
rule
of
law;
and
therefore
section
26
largely
confirms
the
Charter's
above
recited
preamble.
The
importance
of
any
of
the
extra-
and
pre-Charter
rights
and
freedoms
will
be,
in
turn,
considered
in
these
reasons.
Does
Sec.
34
Offend
the
First
and/or
Second
Sections
of
the
Canadian
Bill
of
Rights?
The
preamble
of
the
Canadian
Bill
of
Rights
is
also
descriptive
of
Canada.
It
also
accords
respect
to
the
supremacy
of
God
and
to
the
rule
of
law.
Here,
however,
Vanguard
relies
on
sections
1
and
2
of
the
text.
Recognizing
that
section
34
of
the
Excise
Tax
Act
is
enacted
for
a
valid
federal
purpose
by
a
Parliament
legislating
entirely
within
its
sphere
of
constitutional
competence,
one
must
consider
which,
if
any,
provisions
of
sections
1
and
2
are
engaged
by
the
plaintiff’s
circumstances.
Section
1:
It
is
hereby
recognized
and
declared
that
in
Canada
there
have
existed
and
shall
continue
to
exist
without
discrimination
by
reason
of
race,
national
origin,
colour,
religion
or
sex,
the
following
human
rights
and
fundamental
freedoms,
namely,
(a)
the
right
of
the
individual
to
life,
liberty,
security
of
the
person
and
enjoyment
of
property,
and
the
right
not
to
be
deprived
thereof
except
by
due
process
of
law;
(b)
the
right
of
the
individual
to
equality
before
the
law
and
the
protection
of
the
law;
(c)
freedom
of
religion;
(d)
freedom
of
speech;
(e)
freedom
of
assembly
and
association;
and
(f)
freedom
of
the
press.
Obviously
items
(c)
to
(f)
inclusive
are
not
applicable
to
these
circumstances.
Item
(a)
guarantees
the
right
to
enjoyment
of
property
but,
of
course,
the
right
is
guaranteed
to
“the
individual”;
and
therefore,
it
is
clear,
Parliament
did
not
intend
to
recognize
that
right
for
any
corporation.
Section
1
of
the
Bill
of
Rights
cannot
be
invoked
by
Vanguard,
here:
Section
2:
Every
law
of
Canada
shall,
unless
it
is
expressly
declared
by
an
Act
of
the
Parliament
of
Canada
that
it
shall
operate
notwithstanding
the
Canadian
Bill
of
Rights,
be
so
construed
and
applied
as
not
to
abrogate,
abridge
or
infringe
or
to
authorize
the
abrogation,
abridgment
or
infringement
of
any
of
the
rights
or
freedoms
herein
recognized
and
declared,
and
in
particular,
no
law
of
Canada
shall
be
construed
or
applied
so
as
to
(a)
authorize
or
effect
the
arbitrary
detention,
imprisonment
or
exile
of
any
person;
(b)
impose
or
authorize
the
imposition
of
cruel
and
unusual
treatment
or
punishment;
(c)
deprive
a
person
who
has
been
arrested
or
detained
(i)
of
the
right
to
be
informed
promptly
of
the
reason
for
his
arrest
or
detention,
(ii)
of
the
right
to
retain
and
instruct
counsel
without
delay,
or
(iii)
of
the
remedy
by
way
of
habeas
corpus
for
the
determination
of
the
validity
of
his
detention
and
for
his
release
if
the
detention
is
not
lawful;
(d)
authorize
a
court,
tribunal,
commission,
board
or
other
authority
to
compel
a
person
to
give
evidence
if
he
is
denied
counsel,
protection
against
self
crimination
or
other
constitutional
safeguards;
(e)
deprive
a
person
of
the
right
to
a
fair
hearing
in
accordance
with
the
principles
of
fundamental
justice
for
the
determination
of
his
rights
and
obligations;
(f)
deprive
a
person
charged
with
a
criminal
offence
of
the
right
to
be
presumed
innocent
until
proved
guilty
according
to
law
in
a
fair
and
public
hearing
by
an
independent
and
impartial
tribunal,
or
of
the
right
to
reasonable
bail
without
just
cause;
or
(g)
deprive
a
person
of
the
right
to
the
assistance
of
an
interpreter
in
any
proceedings
in
which
he
is
involved
or
in
which
he
is
a
party
or
a
witness,
before
a
court,
commission,
board
or
other
tribunal,
if
he
does
not
understand
or
speak
the
language
in
which
such
proceedings
are
conducted.
Of
the
provisions
of
section
2
of
the
Bill
of
Rights
only
items
(b)
and
(e)
could
have
any
application
in
these
circumstances.
The
text
of
the
Charter,
which
is
so
highly
similar
to
provision
(b),
has
already
been
considered
and
it
has
been
found
that
the
imposition
of
taxation,
no
matter
how
detested,
is
not
to
be
equated
with
the
imposition
of
“unusual
treatment",
and
even
less
with
“cruel
punishment",
of
a
corporation.
On
the
strength
of
that
finding,
this
provision
is
held
to
be
inapplicable,
too.
The
“person"
mentioned
in
(e)
would
seem
to
be,
in
consonance
with
the
section's
other
provisions,
an
individual
human
person,
but
that
word
can
apply
to
corporations
which
are
frequently
called
“artificial
persons".
However,
in
light
of
paragraphs
10
to
15
of
the
statement
of
agreed
facts,
and
epecially
paragraph
14,
and
in
light
of
Vanguard’s
counsel's
averral
that
the
plaintiff
makes
no
complaint
of
unfair
treatment,
and
his
acknowledgment
of
the
Minister’s
giving
ample
opportunity
for
the
making
of
representations
in
this
matter
(transcript:
p.
52),
it
can
be
confidently
held
that
paragraph
2(e)
of
the
Canadian
Bill
of
Rights,
has
not
been
violated
in
this
case.
Nor
has
any
other
provision
thereof.
Does
Sec.
34
Offend
Certain
Constitutional
Restraints
on
Parliament's
Power
to
Impose
Tax?
In
that
part
of
the
Constitution
Act,
1867,
which
provides
for
money
votes
and
Royal
assent,
there
are
these
two
sections:
Appropriation
and
Tax
Bills.
53.
Bills
for
appropriating
any
Part
of
the
Public
Revenue,
or
for
imposing
any
Tax
or
Impost,
shall
originate
in
the
House
of
Commons.
Recommendation
of
Money
Votes.
54.
It
shall
not
be
lawful
for
the
House
of
Commons
to
adopt
or
pass
any
Vote,
Resolution,
Address,
or
Bill
for
the
Appropriation
of
any
Part
of
the
Public
Revenue,
or
of
any
Tax
or
Impost,
to
any
Purpose
that
has
not
been
first
recommended
to
that
House
by
Message
of
the
Governor
General
in
the
Session
in
which
such
Vote,
Resolution,
Address,
or
Bill
is
proposed.
As
it
was
noted
earlier,
section
34
does
not
operate
so
as
to
authorize
the
Minister
directly
to
impose
any
tax
or
impost
and
in
the
circumstances
of
this
case,
he
has
not
done
so.
His
action
of
determining
a
“fair
price”
more
extensive
than
the
real
contract
price
mentioned
in
paragraph
8
of
the
agreed
facts
did,
however,
purportedly
render
the
plaintiff
liable
to
pay
more
excise
tax.
No
doubt
section
34
is
expressed
in
just
the
manner
it
is
in
order
to
avoid
running
afoul
of
sections
53
and
54
of
the
Constitution
Act,
1867.
Section
34
does
not
run
afoul
of
the
Constitution,
even
although
it
has
resided
in
the
Excise
Tax
Act,
unchanged,
during
many
sessions
of
Parliament,
because
it
is
not
a
bill
or
other
measure
for
the
appropriation
of
any
part
of
the
public
revenue
or
of
any
tax
or
impost.
Section
34,
technically,
goes
no
further
than
permitting
the
Minister
to
increase
the
plaintiff’s
tax
base
—
not
unlike
the
essence
of
assessment
of
income
tax.
The
Rule
of
Law
As
has
been
noted,
the
preamble
to
Part
I
of
the
Constitution
Act,
1982,
proclaims
that
“Canada
is
founded
upon
principles
that
recognize
the
supremacy
of
God
and
the
rule
of
law”.
This
descriptive
proclamation
of
the
basic
nature
of
Canada
was
not
emplaced
inadvertently
in
our
Constitution.
An
examination
of
the
Hansards
and
the
Journals
of
Parliament
will
recall
one
to
the
fact
that,
in
its
first
formulation,
the
preamble
would
have
proclaimed
only
the
supremacy
of
the
rule
of
law.
After
vigorous
debate
led
by
Her
Majesty’s
Loyal
Opposition,
the
Government
of
the
day
accepted
the
present
formulation.
The
notion
of
the
supremacy
of
the
rule
of
law,
at
least,
was
accepted
by
all
from
the
first
appearance
of
the
preamble.
The
same
declaration
about
the
supremacy
of
God
and
the
rule
of
law
is
expressed
also
in
the
first
preamble
of
the
Canadian
Bill
of
Rights.
The
rule
of
law
inheres
in
the
Constitution
of
the
United
Kingdom,
to
which
ours
is
similar
in
principle
according
to
the
first
preamble
of
the
Constitution
Act,
1867.
If
one
would
wish
to
know
the
principles
and
content
of
the
rule
of
law,
one
should
consult
a
recognized
source
or
knowledgeable
author.
Such
a
one
was,
as
noticed,
A.
V.
Dicey,
K.C.,
Hon.
D.C.L.,
of
the
Inner
Temple,
formerly
Vinerian
Professor
of
English
Law,
Fellow
of
All
Souls
College,
Oxford.
Professor
Dicey
wrote
an
enduring
tome
Introduction
to
The
Study
of
the
Law
of
The
Constitution,
first
published
in
1895,
tenth
edition,
1959,
with
numerous
reprintings
until
at
least
1975,
published
by
MacMillan,
London.
This
oft-cited
opus
in
its
Part
Il:
The
Rule
of
Law,
contains
Dicey's
discourse
in
Chapter
IV
on
the
nature
and
applications
of
the
rule
of
law.
The
following
instructive
passages
occur
between
pages
187
and
199:
When
we
say
that
the
supremacy
or
the
rule
of
law
is
a
characteristic
of
the
English
constitution,
we
generally
include
under
one
expression
at
least
three
distinct
though
kindred
conceptions.
We
mean,
in
the
first
place,
that
no
man
is
punishable
or
can
be
lawfully
made
to
suffer
in
body
or
goods
except
for
a
distinct
breach
of
law
established
in
the
ordinary
legal
manner
before
the
ordinary
courts
of
the
land.
In
this
sense
the
rule
of
law
is
contrasted
with
every
system
of
government
based
on
the
exercise
by
persons
in
authority
of
wide,
arbitrary,
or
discretionary
powers
of
constraint.
Yet,
even
if
we
confine
our
observation
to
the
existing
condition
of
Europe,
we
shall
soon
be
convinced
that
the
“rule
of
law”
even
in
this
narrow
sense
is
peculiar
to
England,
or
to
those
countries
which,
like
the
United
States
of
America,
have
inherited
English
traditions.
In
almost
every
continental
community
the
executive
exercises
far
wider
discretionary
authority
in
the
matter
of
arrest,
of
temporary
imprisonment,
of
expulsion
from
its
territory,
and
the
like,
than
is
either
legally
claimed
or
in
fact
exerted
by
the
government
in
England;
and
a
study
of
European
politics
now
and
again
reminds
English
readers
that
wherever
there
is
discretion
there
is
room
for
arbitrariness,
and
that
in
a
republic
no
less
than
under
a
monarchy
discretionary
authority
on
the
part
of
the
government
must
mean
insecurity
for
legal
freedom
on
the
part
of
its
subjects.
If,
however,
we
confined
our
observation
to
the
Europe
of
to-day
(1908),
we
might
well
say
that
in
most
European
countries
the
rule
of
law
is
now
nearly
as
well
established
as
in
England,
and
that
private
individuals
at
any
rate
who
do
not
meddle
in
politics
have
little
to
fear,
as
long
as
they
keep
the
law,
either
from
the
Government
or
from
any
one
else;
and
we
might
therefore
feel
some
difficulty
in
understanding
how
it
ever
happened
that
to
foreigners
the
absence
of
arbitrary
power
on
the
part
of
the
Crown,
of
the
executive,
and
of
every
other
authority
in
England,
has
always
seemed
a
striking
feature,
we
might
almost
say
the
essential
characteristic,
of
the
English
constitution.!
1
La
liberté
est
le
droit
de
faire
tout
ce
que
les
lois
permettent;
et
si
un
citoyen
pouvoit
faire
ce
qu’elles
défendent,
il
n’auroit
plus
de
liberté,
parce
que
les
autres
auroient
tout
de
même
ce
pouvoir.
—
Montesquieu,
De
l'esprit
des
lois
(1845),
bk.
xi,
ch.
iii.
Il
y
a
aussi
une
nation
dans
le
monde
qui
a
pour
objet
direct
de
sa
constitution
la
liberté
politique.
—
Ibid.
ch.
v.
The
English
are
this
nation.
The
singularity
of
England
was
not
so
much
the
goodness
or
the
leniency
as
the
legality
of
the
English
system
of
government.
When
Voltaire
came
to
England
—
and
Voltaire
represented
the
feeling
of
his
age
—
his
predominant
sentiment
clearly
was
that
he
had
passed
out
of
the
realm
of
despotism
to
a
land
where
the
laws
might
be
harsh,
but
where
men
were
ruled
by
law
and
not
by
caprice.,
1
Les
circonstances
qui
contraignaient
Voltaire
à
chercher
un
refuge
chez
nos
voisins
devaient
lui
inspirer
une
grande
sympathie
pour
des
institutions
où
il
n’y
avait
nulle
place
à
l’arbitraire.
‘La
raison
est
libre
ici
et
n’y
connaît
point
de
contrainte.’
On
y
respire
un
air
plus
généreux,
l’on
se
sent
au
milieu
de
citoyens
qui
n’ont
pas
tort
de
porter
le
front
haut,
de
marcher
fièrement,
sûrs
qu’on
n’eût
pu
toucher
à
un
seul
cheveu
de
leur
tête,
et
n’ayant
à
redoubter
ni
lettres
de
cachet,
ni
captivité
immotivée.
—
Desnoiresterres,
Voltaire
et
la
Société
au
XVIIlième
Siècle
(2nd
ed.,
vol.
i,
1871),
p.
365.
We
mean
in
the
second
place,
when
we
speak
of
the
“rule
of
law”
as
a
characteristic
of
our
country,
not
only
that
with
us
no
man
is
above
the
law,
but
(what
is
a
different
thing)
that
here
every
man,
whatever
be
his
rank
or
condition,
is
subject
to
the
ordinary
law
of
the
realm
and
amenable
to
the
jurisdiction
of
the
ordinary
tribunals.
In
England
the
idea
of
legal
equality,
or
of
the
universal
subjection
of
all
classes
to
one
law
administered
by
the
ordinary
courts,
has
been
pushed
to
its
utmost
limit.
With
us
every
official,
from
the
Prime
Minister
down
to
a
constable
or
a
collector
of
taxes,
is
under
the
same
responsibility
for
every
act
done
without
legal
justification
as
any
other
citizen.
The
Reports
abound
with
cases
in
which
officials
have
been
brought
before
the
courts,
and
made,
in
their
personal
capacity,
liable
to
punishment,
or
to
the
payment
of
damages,
for
acts
done
in
their
official
character
but
in
excess
of
their
lawful
authority.
Officials,
such
for
example
as
soldiers
or
clergyman
of
the
Established
Church,
are,
it
is
true,
in
England
as
elsewhere,
subject
to
laws
which
do
not
affect
the
rest
of
the
nation,
and
are
in
some
instances
amenable
to
tribunals
which
have
no
jurisdiction
over
their
fellow-countrymen;
officials,
that
is
to
say,
are
to
a
certain
extent
governed
under
what
may
be
termed
official
law.
But
this
fact
is
in
no
way
inconsistent
with
the
principle
that
all
men
are
in
England
subject
to
the
law
of
the
realm;
for
though
a
soldier
or
a
clergyman
incurs
from
his
position
legal
liabilities
from
which
other
men
are
exempt,
he
does
not
(speaking
generally)
escape
thereby
from
the
duties
of
an
ordinary
citizen.
There
remains
yet
a
third
and
a
different
sense
in
which
the
“rule
of
law”
or
the
predominance
of
the
legal
spirit
may
be
described
as
a
special
attribute
of
English
institutions.
We
may
say
that
the
constitution
is
pervaded
by
the
rule
of
law
on
the
ground
that
the
general
principles
of
the
constitution
(as
for
example
the
right
to
personal
liberty,
or
the
right
of
public
meeting)
are
with
us
the
result
of
judicial
decisions
determining
the
rights
of
private
persons
in
particular
cases
brought
before
the
courts;
3
Cf.
Calvin’s
Case
(1608)
7
Co.
Rep.
1a;
Campbell
v.
Hall
(1774)
Lofft.
655;
K.
&
L.
487;
Wilkes
v.Wood
(1763)
19
St.
Tr.
1153;
Mostyn
v.
Fabrigas
(1774)
1
Cowp.
161.
Parliamentary
declarations
of
the
law
such
as
the
Petition
of
Right
and
the
Bill
of
Rights
have
a
certain
affinity
to
judicial
decisions.
[When
the
author
refers
to
the
general
principles
of
the
constitution
in
this
context,
it
is
clear
from
his
examples
that
he
is
dealing
with
the
means
of
protecting
private
rights.
The
origin
of
the
sovereignty
of
Parliament
cannot
be
traced
to
a
judicial
decision
and
the
independence
of
the
judges
has
rested
on
statute
since
the
Act
of
Settlement,
1701.
—
Ed.]
This
is
one
portion
at
least
of
the
fact
vaguely
hinted
at
in
the
current
but
misguiding
statement
that
“the
constitution
has
not
been
made
but
has
“grown”.
This
dictum,
if
taken
literally,
is
absurd.
“Political
institutions
(however
the
proposition
may
be
at
times
ignored)
are
the
work
of
men,
owe
their
origin
and
their
whole
existence
to
human
will.
Men
did
not
wake
up
on
a
summer
morning
and
find
them
sprung
up.
Neither
do
they
resemble
trees,
which,
once
planted,
are
‘aye
growing'
while
men
‘are
sleeping’.
In
every
stage
of
their
existence
they
are
made
what
they
are
by
human
voluntary
agency.”
1
'
Mill,
Considerations
on
Representative
Government
(3rd
ed.,
1865),
p.
4.
some
polities,
and
among
them
the
English
constitution,
have
not
been
created
at
one
stroke,
and,
far
from
being
the
result
of
legislation,
in
the
ordinary
sense
of
that
term,
are
the
fruit
of
contests
carried
on
in
the
courts
on
behalf
of
the
rights
of
individuals.
Our
constitution,
in
short,
is
a
judge-made
constitution,
and
it
bears
on
its
face
all
the
features,
good
and
bad,
of
judge-made
law.
There
is
in
the
English
constitution
an
absence
of
those
declarations
or
definitions
of
rights
so
dear
to
foreign
constitutionalists.
Such
principles,
moreover,
as
you
can
discover
in
the
English
constitution
are,
like
all
maxims
established
by
judicial
legislation,
mere
generalisations
drawn
either
from
the
decisions
or
dicta
of
judges,
or
from
statutes
which,
being
passed
to
meet
special
grievances,
bear
a
close
resemblance
to
judicial
decisions,
and
are
in
effect
judgments
pronounced
by
the
High
Court
of
Parliament.
In
England
the
right
to
individual
liberty
is
part
of
the
constitution,
because
it
is
secured
by
the
decisions
of
the
courts,
extended
or
confirmed
as
they
are
by
the
Habeas
Corpus
Acts.
If
it
be
allowable
to
apply
the
formulas
of
logic
to
questions
of
law,
the
difference
in
this
matter
between
the
constitution
of
Belgium
and
the
English
constitution
may
be
described
by
the
statement
that
in
Belgium
individual
rights
are
deductions
drawn
from
the
principles
of
the
constitution,
whilst
in
England
the
so-called
principles
of
the
constitution
are
inductions
or
generalisations
based
upon
particular
decisions
pronounced
by
the
courts
as
to
the
rights
of
given
individuals.
This
is
of
course
a
merely
formal
difference.
Liberty
is
as
well
secured
in
Belgium
as
in
England,
and
as
long
as
this
is
so
it
matters
nothing
whether
we
say
that
individuals
are
free
from
all
risk
of
arbitrary
arrest,
because
liberty
of
person
is
guaranteed
by
the
constitution,
or
that
the
right
to
personal
freedom,
or
in
other
words
to
protection
from
arbitrary
arrest,
forms
part
of
the
constitution
because
it
is
secured
by
the
ordinary
law
of
the
land.
.
.
.
Now,
most
foreign
constitutionmakers
have
begun
with
declarations
of
rights.
For
this
they
have
often
been
in
nowise
to
blame.
Their
course
of
action
has
more
often
than
not
been
forced
upon
them
by
the
stress
of
circumstances,
and
by
the
consideration
that
to
lay
down
general
principles
of
law
is
the
proper
and
natural
function
of
legislators.
But
any
knowledge
of
history
suffices
to
show
that
foreign
constitutionalists
have,
while
occupied
in
defining
rights,
given
insufficient
attention
to
the
absolute
necessity
for
the
provision
of
adequate
remedies
by
which
the
rights
they
proclaimed
might
be
enforced.
.
.
.
On
the
other
hand,
there
runs
through
the
English
constitution
that
inseparable
connection
between
the
means
of
enforcing
a
right
and
the
right
to
be
enforced
which
is
the
strength
of
judicial
legislation.
The
saw,
ubi
jus
ibi
remedium,
becomes
from
this
point
of
view
something
much
more
important
than
a
mere
tautologous
proposition.
In
its
bearing
upon
constitutional
law,
it
means
that
the
Englishmen
whose
labours
gradually
framed
the
complicated
set
of
laws
and
institutions
which
we
can
call
the
Constitution,
fixed
their
minds
far
more
intently
on
providing
remedies
for
the
enforcement
of
particular
rights
or
(what
is
merely
the
same
thing
looked
at
from
the
other
side)
for
averting
definite
wrongs,
than
upon
any
declaration
of
the
Rights
of
Man
or
of
Englishmen.
Thus
it
may
be
seen
that
section
34
of
the
Excise
Tax
Act
is
no
paradigm
of
the
rule
of
law.
It
is,
indeed,
so
contrary
to
the
rule
of
law
that
it
can
surely
be
declared
to
be
unconstitutional.
It
accords
arbitrary
administrative
discretion,
without
any
guidelines
or
directives,
to
the
Minister
whose
determination
is
not
subject
to
any
objective
second
opinion
as
is
inherent
in
an
appeal
provision.
Even
if,
in
fact
and
theory,
section
34
does
not
transgress
the
specific
rights
and
freedoms
proclaimed
in
the
Charter,
that
constitutional
document
itself,
in
section
26,
claims
no
monopoly
in
the
promulgation
of
Canadians’
other
existing
rights
and
freedoms.
The
rule
of
law
is
a
central
principle
of
our
Constitution
and
it
is
transgressed
by
section
34.
The
rule
of
law
existed
in
our
Constitution
long
before
the
entrenchment
of
the
Charter.
Therefore,
ill
conceived
laws
could
well
have
run
afoul
of
the
rule
of
law,
or
evinced
a
vagueness
to
be
exploited
by
the
Crown's
servants,
and
can
still
exhibit
those
characteristics,
without
engaging
the
Charter
or
the
Bill
of
Rights.
By
levying
his
determination
of
“fair
price”
against
Vanguard,
the
Minister
at
a
stroke
of
the
pen
imposes
a
heavy
burden
of
tax
debt.
Since
the
Minister
did
not
agree
with
Vanguard's
submissions,
it
and
its
shareholders
and
directors
are
left
with
the
burdensome
decree
of
the
one-and-only,
far-from-disinterested
and
uncontradictable
authority
whom
section
34
recognizes
in
conjuring
the
“fair
price
on
which
the
tax
should
be
imposed".
The
“tax
should
be
imposed"
in
the
sole
judgment
of
the
Minister
whose
duty
is
to
collect
tax?
Section
34
certainly
makes
a
despot
of
the
Minister.
If
this
formulation
be
so
decent
and
reasonable
as
the
Minister's
counsel
say
it
is,
why
Parliament
could
provide
that
all
Canadians
should
subject
their
lives
and
livelihoods
to
some
chosen
official
who
finds
himself
in
as
paramount
a
conflict
of
official
interest
as
does
the
Minister
of
National
Revenue
when
determining
that
taxpayers
should
really
contribute
more
revenue
to
the
Crown,
pursuant
to
section
34
of
the
Excise
Tax
Act.
It
is
said
that
the
Minister
merely
determines
“the
fair
price
on
which
the
tax
should
be
imposed",
and
that
is
innocuous
enough.
The
Minister
does
not
really
levy
the
tax.
That
is
technically
true,
but
what
solace
to
anyone
is
that?
In
Morguard
Properties
Ltd.
v.
City
of
Winnipeg,
[1983]
2
S.C.R.
493;
3
D.L.R.
(4th)
1,
Mr.
Justice
Estey,
for
the
unanimous
Supreme
Court
of
Canada
is
reported
(S.C.R.
511;
D.L.R.
15)
as
noting:
In
this
case
it
is
not
the
assessment
which
directly
imposes
the
tax
burden
.
.
.;
but
the
distinction
is
without
practical
significance
as
it
is
the
assessment
which
starts
the
process
and
which
inevitably
increases
the
burden
on
the
taxpayer
if
the
assessment
is
improperly
enlarged.
More
will
be
written
herein
about
the
Minister's
method
of
arriving
at
“the
fair
price",
but
at
this
stage
it
may
be
noted
that
the
Minister
never
determines
that
“fair
price
on
which
the
tax
should
be
imposed"
to
be
less
than
the
taxpayer
charges.
The
Minister
never
invokes
section
34
in
order
to
reduce
anyone's
tax
burden.
As
in
this
case,
it
is
always
enlarged.
Whether
it
is
improperly
enlarged
or
not,
will
be
further
considered
herein.
Now,
it
is
further
said
that
the
absence
of
any
provision
for
an
appeal
against
the
Minister's
absolute
determination
of
“the
fair
price”
does
naught
to
render
section
34
constitutionally
infirm.
The
provision
for
an
appeal
seemed
important
enough
to
the
House
of
Lords
when
there
was
none,
and
latterly,
to
the
Appeal
Division
of
this
Court
when
there
was
such
a
provision.
In
Vestey
v.
Inland
Revenue
Commissioners,
[1980]
A.C.
1148;
[1979]
3
All
E.R.
976
Lord
Wilberforce,
with
whom
the
majority
concurred,
is
reported
thus:
(at
1171;
All
E.R.
984)
The
contention
of
the
revenue
is
that
in
such
cases
they
have
a
discretion
which
enables
them
to
assess
one
or
more
or
all
of
the
individuals
in
such
sums
as
they
think
fit:
the
only
limitation
upon
this
discretion
is
they
say,
that
the
total
income
(of
the
foreign
trustees)
may
not
be
assessed
more
than
once.
This
is
a
remarkable
contention.
Let
us
consider
first
some
of
the
practical
consequences,
if
it
is
correct.
(1)
It
is
open
to
the
revenue
to
select
one
or
more
of
the
beneficiaries
to
tax
and
to
pass
over
the
others.
(2)
It
is
open
to
the
revenue
to
apportion
the
tax
between
several
beneficiaries
according
to
any
method
they
think
fit
—
and
this
without
any
possibility
of
appeal,
none
being
provided
for.
(3)
The
liability
of
individual
beneficiaries
may
depend
upon
when
the
revenue
chooses
to
make
its
assessment
(at
1172;
ALL
E.R.
984)
(4)
The
revenue
is
entitled
to
continue
the
process
of
discretionary
assessment
so
long
as
the
settlement
endures.
It
may
adhere
to
its
present
system,
or
change
it:
it
may
take
into
account
changes
in
facts
(for
example,
the
appearance
of
new
entrants
into
the
class,
or
new
recipients)
or
it
may
not.
No
beneficiary
has
any
means
of
challenging
their
decisions.
These
are
some
of
the
consequences,
in
this
case,
and
applied
to
these
beneficiaries,
of
the
revenue’s
contention:
they
are
frightening
enough.
But
there
are
more
fundamental
objections,
in
principle,
to
the
whole
proposition.
Taxes
are
imposed
upon
subjects
by
Parliament.
A
citizen
cannot
be
taxed
unless
he
is
designated
in
clear
terms
by
a
taxing
Act
as
a
taxpayer
and
the
amount
of
his
liability
is
clearly
defined.
A
proposition
that
whether
a
subject
is
to
be
taxed
or
not,
or,
if
he
is,
the
amount
of
his
liability,
is
to
be
decided
(even
though
within
a
limit)
by
an
administrative
body
represents
a
radical
departure
from
constitutional
principle.
It
may
be
that
the
revenue
could
persuade
Parliament
to
enact
such
a
proposition
in
such
terms
that
the
courts
would
have
to
give
effect
to
it:
but,
unless
it
has
done
so,
the
courts,
acting
on
constitutional
principles,
not
only
should
not,
but
cannot,
validate
it.
[Emphasis
added.]
In
Krag-Hansen
v.
The
Queen,
[1986]
2
C.T.C.
69;
86
D.T.C.
6122,
Mr.
Justice
Pratte,
speaking
for
the
unanimous
Appeal
Division
of
this
Court
said:
(p.
70;
D.T.C.
6123)
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.
[Emphasis
added.]
So
it
is
that
the
provision
of
an
appeal
is
seen
to
be
constitutionally
important,
as
it
necessarily
is
according
to
the
rule
of
law,
in
order
to
limit
an
exercise
of
sole
and
autocratic
discretion
such
as
the
Minister
wields
under
section
34
of
the
Act.
The
Minister’s
counsel
do
not
allege
that
section
34
is
based
on
any
rationale
akin
to
national
emergency
or
the
necessarily
swift
disposition
of
issues
of
military
or
prison
discipline
or
state
security.
Even
those
considerations
do
not
inevitably
override
that
nucleus
of
our
Constitution
which
is
the
rule
of
law.
Section
34
of
the
Excise
Tax
Act
is
so
repugnant
to
the
rule
of
law
that
it
is
easily
declared
to
be
unconstitutional.
Were
it
not
for
the
supremacy
of
Parliament
legislating
in
its
proper
sphere
of
competence,
it
would
be
equally
easy
to
declare
section
34
void
and
of
no
force
and
effect.
How
much
effect
the
Court
will
give
to
it
will
be
imminently
discussed,
but
this
is
the
point
to
state
that
this
Court,
acting
on
constitutional
principles,
does
not
and
cannot,
validate
section
34.
Vague
Uncertainty
and
Strict
Construction
Unwilling
and
unable
as
this
Court
is
to
accord
any
constitutional
validity
to
section
34
of
the
Act
under
consideration,
yet
there
is
no
power
in
the
Court
to
hold
that
provision
or
any
other
enactment
or
statute
void
for
uncertainty
only,
in
the
absence
of
a
Charter
issue.
The
plaintiff’s
counsel
have
rained
on
the
Court
a
plethora
of
jurisprudence
which
demonstrates
that
municipal
by-laws
and
other
subordinate
legislation
may
indeed
be
held
void
for
uncertainty.
That
jurisprudence
is
simply
to
be
ignored
in
the
present
text.
In
R
v.
Morgentaler
et
al.,
(1985)
17
C.R.R.
223;
52
O.R.
(2d)
353,
the
Ontario
Court
of
Appeal
noted
(at
257-58;
O.R.
388)
that:
“Counsel
was
unable
to
give
the
Court
any
authority
for
holding
a
statute
void
for
uncertainty."
In
this
very
case
at
bar,
also,
counsel
for
the
plaintiff
candidly
acknowledges
that
he
and
his
associates
“have
not
been
able
to
find
any
case
in
English
common
law
where
a
court
has
actually
done
what
the
plaintiff
is
asking
this
Honourable
Court
to
do,
namely
take
the
view
that
because
a
section
is
pretty
vague
it
should
simply
be
held
to
be
void.”
(Transcript:
p.
448)
There
certainly
is
a
vagueness
about
section
34
when
viewed
against
normal
standards
of
taxation.
for
example,
it
does
not
state
over
what
period
of
time
the
Minister
may
judge
that
the
“goods
subject
to
tax
.
.
.
are
sold
at
a
price
that
...
is
less
than
the
fair
price
on
which
the
tax
should
be
imposed".
Is
there
absolutely
no
limit
to
the
time-span
of
the
Minister's
autonomous
grasping
for
additional
tax
revenues?
On
the
other
hand,
because
section
34
provides
that
“where
goods
.
.
.
are
sold
.
.
.",
and
not
“where
goods
.
.
.have
been
sold
.
.
.”,
or
“where
goods
..
.
have
been
and
are
sold
.
.
.”,
perhaps
the
section
operates,
as
the
plaintiff
contends,
only
presently
and
prospectively
and
not
retrospectively.
A
good
case
can
be
made
for
holding
that
section
34
itself
limits
the
Minister's
reach
to
the
present
and
future
from
that
day
only
upon
which
the
Minister
first
formulates
his
judgment
that
the
goods
are
being
sold
at
a
price
which
is
“less
than
the
fair
price
on
which
the
tax
should
be
imposed".
His
judgment
ought
not
to
reach
back
into
the
past
to
the
day
the
taxpayer
first
sold
goods
subject
to
tax
in
order
to
raise
tax
revenues.
Since
this
legislation
cannot
be
held
to
be
void
for
uncertainty,
it
must
nevertheless
be
strictly
interpreted
such
that
the
taxpayer
takes
the
benefit
of
any
real
ambiguity.
Estey,
J.
said
in
the
Morguard
case
(above),
still
at
S.C.R.
511
and
D.L.R.
15:
.
.
.
I
would
invoke
one
of
the
oldest
canons
of
interpretation
employed
by
the
courts
in
the
application
of
the
statutes
of
the
land,
namely,
that
a
statute
imposing
a
tax
burden
must
clearly
do
so,
otherwise
the
complaining
citizen
remains
outside
the
operation
of
the
taxing
program.
If
the
Minister
exceeded
his
jurisdiction,
misapplied
the
law
or
acted
unfairly,
his
determination
of
"the
fair
price
on
which
the
tax
should
be
imposed”
ought
to
be
quashed.
Fair
and
Lawful
Exercise
of
Delegated
Power?
An
insight
into
the
manner
in
which
the
Minister
exercised
the
power
conferred
by
section
34
in
this
very
instance
was
provided
by
the
only
witness
to
testify
at
the
trial.
That
witness
must
be
regarded
as
knowledgeable,
indeed,
being
Philippe
Claude
Hannan,
director
of
the
policy
and
legislation
directorate
within
the
excise
branch
of
the
Department
of
National
Revenue.
Mr.
Hannan
described
the
anatomy
of
the
formulation
of
the
Minister’s
judgment
that
"goods
are
sold
at
a
price
that
.
.
.
is
less
than
the
fair
price
upon
which
the
tax
should
be
imposed”
and
the
formulation
and
exercise
of
the
Minister’s
"power
to
determine
the
fair
price”.
Mr.
Hannan
produced
a
copy
of
the
department's
internal
“Guidelines
for
Fair
Price
Cases
Under
Section
34
of
the
Excise
Tax
Act”
dated
May
1,
1981.
That
document
is
Exhibit
15,
herein.
Exhibit
15
gives
the
impression
that
its
author
or
authors
were
more
interested
in
enforcing
the
Competition
Act,
rather
than
the
Excise
Tax
Act.
For
example,
the
passage
on
"Identification
of
a
Fair
Price
Case”
(p.
4)
begins:
The
question
of
fair
price
is
always
present
regardless
of
whether
or
not
sales
are
made
to
associated
or
independent
customers.
A
manufacturer
may,
for
example,
simply
decide
to
market
his
product
at
a
suppressed
price
for
a
period
of
time
with
the
specific
aim
of
disrupting
the
market
place
to
bring
hardship
to
competitors.
Next,
in
Exhibit
15,
there
are
some
given
examples
of
"certain
conditions
which
make
the
sale
price
suspect
and
these
should
received
[sic]
special
consideration.”
—
the
manufacturer
sells
exclusively
or
almost
exclusively
to
one
customer
—
the
manufacturer
and
customer
are
contractually
obligated
to
each
other
—
the
manufacturer
and
customer
are
interrelated,
affiliated,
or
associated,
or
one
is
a
subsidiary
of
the
other
although
the
relationship
between
the
manufacturer
and
customer
does
not
in
itself
create
a
fair
price
problem
—
the
customer
does
not
perform
a
normal
role
in
the
marketing
chain
—
the
customer
operates
at
a
marketing
level
not
usual
in
the
industry
and
may
serve
only
to
create
a
sale
at
a
lower
level
for
tax
purposes
—
the
price
appears
low
in
relation
to
market
value
or
costs
—
the
price
does
not
include
all
normal
elements
of
costs
and
profit
such
as
when
the
customer
loans
a
plant
or
machinery
to
the
manufacturer
free
of
charge,
or
is
providing
financial
assistance
to
the
manufacturer
without
interest
—
an
unlicensed
foreign
purchaser
may
have
certain
rights
to
the
goods
being
manufactured
and
sold
in
Canada
Now,
according
to
Mr.
Hannan
the
Minister
and
all
those
who
brief
him
or
her
in
these
"fair-price”
matters
focus
upon
relationships
and
are
not
concerned
with
the
real
dollars-and-cents
value
of
the
price
which
“in
the
judgment
of
the
Minister
is
less
than
fair
price
on
which
the
tax
should
be
imposed”.
(Transcript:
pp.
110,
111,
118,
120.)
Surveys
of
marketing
practices
are
taken
among
the
taxpayer's
competitors
in
the
industry
—
another
potential
or
real
conflict
of
interest
—
in
which
individual
competitor's
answers
are
kept
secret.
(Transcript:
pp.
173
to
180.)
In
all
of
this,
Mr.
Hannan
swore
that
the
Minister’s
activities
do
not
unjustly
penalize
the
highly
efficient
manufacturer
at
the
behest
of
competitors
(transcript:
pp.
109-11),
but
he
never
clearly
explained
how
or
why
such
conduct
does
not
punish
the
efficient.
Indeed,
Mr.
Hannan,
as
if
in
answer,
simply
stoutly
insisted:
That
is
why
we
don't
look
at
individual
prices
by
different
people.
We
take
a
look
at
the
relationship
between
the
trade
levels.
(Transcript:
p.
110)
and
again:
We
don't
look
at
the
actual
sale
price
we
don't
look
at
the
specific
dollars
and
cents
price.
We
take
a
look
at
the
relationship
between
the
various
levels.
(Transcript:
p.
111)
There
are
too
many
aberrations
in
the
administration
of
section
34
(transcript:
pp.
208-11,
for
example)
all
performed
under
the
Minister’s
responsibility,
to
examine
and
describe
individually.
Most
are
caused
by
the
autocratic
power
and
lack
of
guidance
accorded
to
the
Minister
in
disregard
of
the
rule
of
law.
There
is
yet
another
factor
to
consider.
In
ignoring
the
dollars-and-cents
composition
of
the
plaintiff’s
selling
price
and
in
confining
his
attention
to
the
plaintiff’s
relationship
with
Flecto,
it
might
be
thought
that
the
Minister
implies
that
there
were
no
genuine
sales
transactions
between
Vanguard
and
Flecto.
Of
course,
if
he
were
to
assert
that
position
and
if
it
were
true,
then
the
condition
precedent
for
his
making
a
determination
of
fair
price
would
be
non-existent.
That
condition
precedent
is
expressed:
“Where
goods
subject
to
tax
.
.
.
are
sold
at
a
price
.
.
.”.
If
there
were
no
genuine
sales
from
Vanguard
to
Flecto,
as
such
are
necessarily
predicated
by
section
34,
then
clearly
the
Minister
would
have
no
business
“to
determine
the
fair
price".
This
makes
it
quite
clear
that
the
business
of
section
34
is
the
constituent
dollars-and-cents
costs
in
the
composition
of
sale
prices.
It
is
not
merely
relationships.
All
in
all
it
is
apparent
from
the
exhibits
and
from
the
testimony
of
Mr.
Hannan,
that
the
Minister
impugns
his
own
jurisdiction
through
persistent
error
of
law
in
purporting
to
discharge
his
functions
pursuant
to
section
34.
He
asks
himself
the
wrong
question
and
he
steadfastly
avoids
the
right
question
and
the
right
course
of
administrative
power
exercise.
In
order
to
form
a
judgment
about
“the
fair
price
upon
which
the
tax
should
be
imposed",
and
“to
determine
the
fair
price’
the
Minister
must
know
the
ingredients
of
the
price
and
what
constitutes
its
final
expression
in
and
as
dollars
and
cents.
Accountants
rejoice
in
the
complex
minutiae
of
price
structure,
but
to
simplify,
whoever
is
going
to
discern
a
low
price
and
to
determine
a
fair
price
must
enquire
into
the
manufacturer's
capital
costs,
depreciation,
cost
of
labour
and
materials,
comparative
efficiency
and
profit
margins,
at
the
very
least.
Those
are
the
dollars-and-cents
matters
about
which
the
Minister
is
quite
unconcerned,
according
to
Mr.
Hannan's
testimony,
in
wielding
the
power
under
section
34.
The
section
accords
the
Minister
the
authority
to
make
judgments
about
selling
prices
and
to
determine
fair
prices,
not
to
determine
fair
price
on
the
basis
of
commercial
relationships.
And
rightly
so,
because
entirely
irrespective
of
the
closest
commercial
or
legal
relationships,
the
price
as
between
the
parties
might
well
be
at
a
monetary
level
which
would
operate
between
strangers.
The
Minister
in
fact
rejects
his
true
function
and
power
under
section
34
and,
instead,
makes
—
or
made
here
—
an
unwarranted
conclusion
based
not
on
the
dollars-and-cents
which
go
to
make
up
the
plaintiff’s
price
at
which
its
goods
are
sold,
but
on
relationship.
When
Flecto,
the
plaintiff's
parent
corporation
found
itself
to
be
the
sole
surviving
distributor,
the
Minister
made
an
essentially
autocratic
and
substantively
arbitrary
determination
of
"fair"
price,
based
on
relationship.
The
Minister's
conduct
was
so
far
beyond
the
clear
intendment
of
section
34,
and
therefore
beyond
his
jurisdiction
to
impose
a
heavier
tax
burden
on
Vanguard,
that
his
purported
determination
of
the
allegedly
fair
price
must
be
quashed.
Quashed
it
will
be,
with
the
concomitant
declaration
that
the
plaintiff
has
paid
its
taxes,
but
there
is
another
reason
to
make
that
declaration.
It
is
founded
on
the
further
strict
interpretation
of
taxing
statutes.
Is
Section
34,
With
the
Other
Provisions
of
the
Excise
Tax
Act,
Effectual
to
Impose
Liability
on
the
Plaintiff
to
Pay
the
Tax
Demanded
By
the
Minister?
Section
34
ends
with
the
abjuration:
and
the
taxpayer
shall
pay
the
tax
on
the
price
so
determined."
However,
the
Act
speaks
inconsistently
and
confusingly
about
when,
if
ever,
those
taxes
under
section
34
ought
to
be
paid.
Indeed
there
is
no
fixed
time.
Section
27
makes
this
requirement:
27.1(1)
There
shall
be
imposed,
levied
and
collected
a
consumption
or
sales
tax
.
.
.
on
the
sale
price
of
all
goods
(a)
produced
or
manufactured
in
Canada
(i)
payable,
in
any
case
other
than
a
case
mentioned
in
subparagraph
(ii)
or
(iii),
by
the
producer
or
manufacturer
at
the
time
when
the
goods
are
delivered
to
the
purchaser
or
at
the
time
when
the
property
in
the
goods
passes,
whichever
is
the
earlier,
(ii)
payable,
in
a
case
where
the
contract
for
the
sale
of
the
goods
(including
a
hire-purchase
contract
and
any
other
contract
under
which
property
in
the
goods
passes
upon
satisfaction
of
a
condition)
provides
that
the
sale
price
or
other
consideration
shall
be
paid
to
the
manufacturer
or
producer
by
instalments
(whether
the
contract
provides
that
the
goods
are
to
be
delivered
or
property
in
the
goods
is
to
pass
before
or
after
payment
of
any
or
all
instalments),
by
the
producer
or
manufacturer
pro
tanto
at
the
time
each
of
the
instalments
becomes
payable
in
accordance
with
the
terms
of
the
contract,
and
(iii)
payable,
in
a
case
where
the
goods
are
for
use
by
the
producer
or
manufacturer
thereof,
by
the
producer
or
manufacturer
at
the
time
the
goods
are
appropriated
for
use;
[Emphasis
added]
Parliament
has
ordained
no
time
in
the
above
provision
for
paying
the
taxes
generated
by
the
Minister’s
activities
under
section
34.
But,
Mr.
Hannan
testified
that
the
Minister
adopts
the
principle
of
payment
before
the
end
of
the
next
following
month
by
adopting
section
50,
whose
most
proximately
pertinent
provisions
are:
50.(1)
Every
person
who
is
required
by
or
pursuant
to
Part
III,
IV
or
V
to
pay
taxes
[section
34
is
in
Part
VI]
shall
make
each
month
a
true
return
of
his
taxable
sales
for
the
last
proceeding
month,
containing
such
information
in
such
form
as
the
regulations
require.
[There
is
no
regulation
pursuant
to
section
34.]
(3)
The
return
required
by
this
section
shall
be
filed
and
the
tax
payable
shall
be
paid
(a)
in
a
case
where
the
return
is
required
to
be
filed
in
accordance
with
subsection
(1)
or
(2),
not
later
than
the
last
day
of
the
first
month
succeeding
that
in
which
the
sales
were
made;
[Emphasis
added]
It
is
apparent
that,
despite
departmental
policy
and
practice,
the
above
recited
(and
other)
provisions
of
section
50
do
not
work
in
regard
to
the
payment
of
tax
contemplated
by
section
34,
and
such
is
the
case
on
various
different
planes
of
unworkability.
Section
34
simply
operates
outside
the
scope
of
making
it
known
when
the
tax
becomes
payable.
A
somewhat
similar
situation
was
identified
in
this
Court
around
the
turn
of
the
decade
and,
in
anticipation
of
principle
expressed
in
the
Morguard
case
and
in
a
long
line
of
similar
jurisprudence,
both
divisions
of
this
Court
applied
that
canon
or
interpretation
which
exacts
of
a
taxing
statute
that,
in
imposing
a
tax
burden,
it
must
do
so
clearly,
otherwise
the
complaining
taxpayer
remains
outside
of
the
operation
of
the
taxing
program.
That
other
case
is
variously
cited
as
British
Columbia
Railway
Company
v.
The
Queen,
[1979]
2
F.C.
122;
[1979]
C.T.C.
56;
79
D.T.C.
5020
(F.C.T.D.
—
Collier,
J.),
and
The
Queen
v.
British
Columbia
Railway
Company,
[1981]
2
F.C.
783;
[1981]
C.T.C.
110;
81
D.T.C.
5089
(C.A.).
In
the
B.C.
Railway
case
there
was
a
provision
whereby
the
Minister
could
determine
the
value
for
the
tax
and
the
taxpayer
was
apparently
obliged
to
pay
it.
Mr.
Justice
Collier
recited
the
pertinent
parts
of
sections
27
and
28,
endeavoured
to
give
effect
to
the
words
both
strictly
interpreted
and
otherwise
and
then
is
reported
on
132;
C.T.C.
63;
D.T.C.
5025
thus:
The
result
of
the
existing
statutory
provisions
is
that
a
manufacturer
or
producer
does
not
know
when
the
tax
becomes
payable.
It
can
be
just
as
plausibly
argued
the
notional
sale
takes
place
when
the
railroad
ties
are,
after
treatment,
put
in
inventory;
that
the
hypothetical
sale
is
not
at
some
date
when
they
are
put
to
use.
The
ties
may
not
be
used
or
consumed
for
months
or
years.
They
may
increase
or
decrease
in
value
over
that
period
of
time.
A
taxpayer
must,
as
I
see
it,
know
the
point
in
time
when
tax
is
payable.
He
can
then
comply
with,
or
fulfill,
his
statutory
duties.
Here
there
is
a
gap
or
omission.
Finally,
and
“with
considerable
reluctance”,
Collier,
J.
made
(at
133-34;
C.T.C.
64;
D.T.C.
5026)
this
formal
determination
of
the
question
of
law:
The
Excise
Tax
Act
failed
to
specify
the
time
at
which
the
consumption
or
sales
tax
was
payable
on
the
plaintiff’s
railroad
ties.
There
is
no
liability
on
the
plaintiff
for
payment
of
the
consumption
or
sales
tax
assessed
by
the
Minister
of
National
Revenue
in
the
assessments
set
out
in
paragraph
3
of
the
statement
of
claim.
In
the
Appeal
Division,
Mr.
Justice
Urie
for
the
majority
of
himself
and
Mr.
Justice
Heald
adopted
and
ratified
the
reasons
of
Mr.
Justice
Collier.
Here,
Vanguard
is
not
liable
to
pay
the
taxes
in
issue,
generated
by
the
Minister's
determination
of
a
“fair
price”
pursuant
to
section
34
of
the
Act.
The
plaintiff
is
entitled
to
its
full
measure
of
taxable
party
and
party
costs.
As
a
result
of
the
promulgation
of
Bill
C-80
last
summer
such
an
unconstitutional
breach
of
the
rule
of
law
as
evinced
by
section
34
ought
not
to
be
again
the
subject
of
adjudication.
That
must
be
a
matter
of
satisfaction
for
all
concerned.
Section
34
is
not
the
type
of
legislation
which
is
to
be
prescribed
for
a
dignified,
free
people
in
any
area
of
legislative
competence,
and
its
demise
would
hardly
be
mourned.
Pursuant
to
Rule
337(2)(b)
the
plaintiff's
solicitors
shall
draw
the
draft
of
an
appropriate
judgment
to
implement
the
Court's
conclusions
herein.
They
shall
actively
seek
the
defendant's
solicitors
endorsed
approval
as
to
the
form
at
least,
if
not
the
content,
of
the
said
judgment
and
thereupon
the
plaintiff
may
move
for
judgment.
If
the
respective
solicitors
cannot
reach
agreement
about
an
efficacious
form
of
judgment,
they
may
speak
to
the
matter.
Order
accordingly.
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