MACLEAN
P.:—The
suppliant
is
a
company
engaged
in
the
business
of
dressing
and
dyeing
furs,
for
others
and
not
for
its
own
account.
By
virtue
of
the
Special
War
Revenue
Act
1915,
and
amendments
thereto,
and
within
the
periods
hereinafter
to
be
mentioned,
the
suppliant
paid
to
the
Crown,
as
sales
tax,
certain
sums
of
money,
by
mistake
of
law
and
of
fact
it
is
claimed,
and
the
suppliant
by
its
petition
herein
seeks
repayment
of
such
moneys
from
the
Crown.
The
matters
in
issue
relate
to
two
different
periods,
that
between
May
19,
1920,
and
December
31,
1923,
and
that
between
December
31,
1923,
and
May
31,
1931,
and
for
that
and
other
reasons,
it
perhaps
would
be
most
convenient
at
this
stage
to
set
out
the
provisions
of
the
statute
applicable
to
those
periods.
The
Special
War
Revenue
Act
1915,
and
amendments
thereto,
in
force
in
the
period
between
May
19,
1920,
and
December
31,
1923,
provided,
by
c.
47,
sec.
13,
Statutes
of
Canada
1922,
that:
"‘19BBB(1)
In
addition
to
any
duty
or
tax
that
may
be
payable
under
this
Part,
or
any
other
statute
or
law,
there
shall
be
imposed,
levied
and
collected
an
excise
tax
.
.
.
on
sales
and
deliveries
by
Canadian
manufacturers
or
producers,
’’
The
suppliant
claims
that
during
this
period,
it
was
not
a
manufacturer
or
producer
within
the
meaning
of
the
Act,
that
it
made
no
sales
or
deliveries
of
goods
then
taxable
under
the
Act,
and
that
no
tax
was
then
exigible
from
the
suppliant.
It
claims,
however,
that
by
mistake
of
law
and
of
fact,
during
that
period,
it
accounted
to
the
Collector
of
Customs
and
Excise
at
the
Port
of
Montreal,
at
the
rate
of
tax
then
in
force,
upon
the
amount
of
all
invoices
issued
to
the
suppliant’s
customers
for
dressing
and/or
dyeing
of
furs
for
such
customers,
although
in
fact
and
in
law
such
transactions
of
the
suppliant
with
its
customers
were
not
sales
and
deliveries
of
a
Canadian
manufacturer
or.
producer,
and
that
in
respect
of
such
accounting
the
Crown
was
paid
by
the
suppliant,
through
error
of
law
and
of
fact,
$8,014.66.
The
above
mentioned
section
of
the
Act
was
repealed
by
ec.
70,
sec.
6
of
the
Statutes
of
Canada
1923,
and
for
the
period
between
January
1,
1924,
and
May
31,
1931,
the
following
section
was
in
force:
"‘19BBB(1)
In
addition
to
any
duty
or
tax
that
may
be
payable
under
this
Part,
or
any
other
statute
or
law,
there
shall
be
imposed,
levied
and
collected
a
consumption
or
sales
tax
.
.
.
on
the
sale
price
of
all
goods
produced
or
manufactured
in
Canada,
.
.
.
which
tax
shall
be
payable
by
the
producer
or
manufacturer
at
the
time
of
the
sale
thereof
by
him
By
virtue
of
this
section,
which
came
into
force
on
January
1,
1924,
sales
tax
became
payable
‘‘at
the
time
of
the
sale
thereof’’
and
not
"‘on
sales
or
deliveries’’
as
provided
by
the
repealed
section.
The
suppliant
puts
forward
the
same
claim
under
this
last
mentioned
section,
for
the
period
just
mentioned,
and
upon
the
same
grounds:
as
in
the
first
mentioned
period,
under
the
repealed
section,
and
it
alleges
that
in
this
period
it
paid
sales
tax
in
the
amount
of
$201,530.37.
By
c.
70,
sec.
6,
subsec.
13,
Statutes
of
Canada
1923,
there
was
enacted
for
the
first
time,
the
following
section,
now
sec.
87
of
the
Act
as
found
in
the
Revised
Statutes
of
Canada
1927,
c.
179,
but
in
precisely
the
same
language,
and
it
will
be
convenient
hereafter
to
refer
to
sec.
19BBB(13)
as
enacted
in
1923,
as
sec.
87.
The
relevant
portion
of
this
new
section
reads:
(‘87.
Whenever
goods
are
manufactured
or
produced
in
Canada
under
such
circumstances
or
conditions
as
render
it
difficult
to
determine
the
value
thereof
for
the
consumption
or
sales
tax
because
"(a)
....
"(b)
....
"(c)
such
goods
are
manufactured
by
contract
for
labour
only
and
not
including
the
value
of
the
goods
that
enter
into
the
same,
or
under
any
other
unusual
or
peculiar
manner
or
condition
;
or
“(d)
....
the
Minister
may
determine
the
value
for
the
tax
under
this
Act
and
all
such
transactions
shall
for
the
purposes
of
this
Act
be
regarded
as
sales.”
This
section,
as
sec.
19BBB(13),
came
into
force
on
January
1,
1924.
It
is
because
of
the
coming
into
force
of
this
section,
on
January
1,
1924,
and
the
changes
effected
in
the
Act
thereby,
that
the
time
material
here
is
divided
into
two
periods.
Effective
on
September
1,
1924,
the
Minister
of
Customs
and
Excise,
purporting
to
act
under
authority
conferred
by
the
Act,
issued
certain
regulations
among
which
was
the
following
:
“Furriers
are
not
to
be
granted
a
consumption
or
sales
tax
licence
on
and
after
the
1st
September,
1924.
Licences
issued
to
furriers
prior
to
that
date
are
to
be
cancelled.
‘‘Dressers
and
dyers
of
furs,
however,
are
required
to
take
out
a
sales
tax
licence
and
account
to
the
Collector
of
Customs
and
Excise
for
consumption
or
sales
tax
on
furs
dressed
or
dyed
by
them.
°
Such
tax
is
to
be
computed
on
the
current
market
value
of
the
dressed
furs
whether
the
dresser
is
the
owner
of
the
furs
or
not.’’
The
suppliant
contests
the
validity
of
this
regulation
and
says
it
was
wholly
or
partially,
ultra
vires
of
any
power
or
authority
conferred
upon
the
Minister
of
Customs
and
Excise
by
the
Act,
and
that
such
regulations
therefore
imposed
no
liability
for
the
payment
of
the
sales
tax
upon
the
suppliant,
except
possibly
in
part
and
this
will
be
mentioned
later,
and
that
the
cancellation
of
licences
to
furriers
was
void.
From
September
1,
1924,
until
May
31,
1931,
through
error
of
law
and
of
fact,
it
is
alleged,
the
suppliant
accounted
in
the
usual
way
for
the
sales
tax,
in
respect
of
furs
dressed
or
dyed
by
it
for
its
customers,
the
tax
being
computed
upon
the
current
market
value
of
the
dressed
and
dyed
furs,
and
that
during
this
period
it
paid
to
the
Crown
the
sum
of
$564,444.38,
of
which
sum
$501,791.07
represents
sales
tax
paid
in
respect
of
furs
dressed
or
dyed,
or
both,
for
customers
of
the
suppliant
whose
licences
had
been
cancelled,
illegally
it
is
claimed,
by
virtue
of
the
regulation.
The
suppliant
claims,
in
its
petition,
that
it
is
entitled
to
recover
altogether
from
the
Crown
the
sum
of
$574,539.96,
subject
to
a
slight
deduction
in
respect
of
the
first
mentioned
period,
but
which
I
need
not
delay
to
explain.
The
suppliant
also
claims
that
the
sums
mentioned
were
paid
to
the
Crown,
at
Montreal,
in
the
province
of
Quebec,
and
that
the
provisions
and
dispositions
of
the
Civil
Code
of
the
Province
of
Quebec
apply
thereto.
In
the
case
of
Vandeweghe
v.
The
King
[1928-34]
C.T.C.
252,
the
suppliant,
Vandeweghe
Ltd.,
dressed
and
dyed
its
own
furs
and
later
sold
them,
the
reverse
of
this
case.
On
appeal
to
the
Supreme
Court
of
Canada,
it
was
there
held
that
the
furs
dressed
and
dyed
by
the
suppliant
fell
within
the
description
of
goods
"
i
manufactured
or
produced
in
Canada’’
within
the
meaning
of
sec.
86
of
the
Act,
and
were
taxable
under
that
section
of
the
Act.
Duff,
C.J.,
who
delivered
the
judgment
of
the
court,
said:
‘‘Although
it
does
not
strictly
enter
into
the
argument,
it
may
not
be
out
of
place
to
observe
that
the
dyer
and
dresser
who
neither
owns
the
fur
nor
sells
the
fur,
within
the
proper
meaning
of
the
word,
is
clearly
not
within
s.
86.
He
may
come
within
s.
87,
and,
if
so,
the
transaction
between
him
and
the
owner
of
the
fur,
which
is
not
truly
a
sale
at
all,
is
deemed
to
be
a
sale
for
the
purposes
of
the
Act.
The
respondents,
aS
we
have
already
observed,
are
not
within
s.
87
but,
if
they
are
a
‘producer’
or
"
manufacturer
‘
they
are
within
s.
86.”
The
Supreme
Court
of
Canada
thus
definitely
held,
that
in
the
facts
of
this
case,
the
suppliant
would
not
be
taxable
under
what
is
now
sec.
86
of
the
Act,
which
for
all
purposes
here
may
be
regarded
as
of
the
same
effect
as
the
earlier
and
corresponding
sections
of
the
Act
which
I
have
already
referred
to;
that
means
that
the
suppliant
here
would
not
be
liable
to
the
sales
tax
upon
the
furs
dressed
and
dyed
by
it
for
its
customers,
under
sec.
86
of
the
Act,
because
it
was
neither
the
owner
nor
seller
of
the
furs,
but
that
it
might
be
liable
under
sec.
87
of
the
Act.
It
occurs
to
me
that
I
should
supplement
my
reference
to
the
regulation
in
question,
in
order
that
there
be
no
misunderstanding
as
to
the
authority
under.
which
it
purports
to
have
been
enacted.
The
introductory
clause
of
the
regulation
I
omitted
to
mention,
and
it
is
as
follows:
"
1
Under
authority
of
section
19BBB,
subsection
3,
and
section
19C
of
The
Special
War
Revenue
Act,
1915,
the
regulations
contained
in
Memorandum
No.
39,
Supplement
D,
as
affecting
furriers
are
hereby
cancelled.”
Then
follows
the
balance
of
the
regulation
as
already
quoted.
Subsee.
3
of
sec.
19BBB,
one
of
the
sections
under
which
the
regulation
purports
to
have
been
enacted,
is
as
follows:
“Notwithstanding
anything
contained
in
this
section,
if
at
any
time
it
appears
to
the
Minister
of
Customs
and
Excise
that
payment
of
the
consumption
or
sales
tax
is
being
evaded
by
a
licensed
manufacturer
or
producer
or
licensed
wholesaler
or
Jobber
the
Minister
may
require
that
the
consumption
or
sales
tax
shall
be
imposed,
levied
and
collected
on
any
material
specified
by
the
Minister
sold
to
any
licensed
manufacturer
or
producer
or
licensed
wholesaler
or
jobber
.
.
.
specified
by
the
Minister,
at
the
time
of
sale
of
such
material
when
produced
or
manufactured
in
Canada.
.
.
.
”
Subsee.
19(c)
of
sec.
19BBB
reads:
‘“The
Minister
may
make
such
regulations
as
he
deems
necessary
or
advisable
for
carrying
out
the
provisions
of
this
Part.”
It
is
clear,
I
think,
that
the
regulation
(requirement)
in
question
was
enacted
under
subsec.
3
of
19BBB.
It
could
hardly
have
been
enacted
under
sec.
19(c)
above
mentioned,
or
under
any
other
provision
of
the
Act.
I
quite
agree
with
Mr.
Mann,
that
it
is
for
the
Minister
to
decide,
under
subsec.
3
of
19BBB,
if
the
sales
tax
were
‘‘being
evaded’’,
and
if
that
is
so
decided
it
is
not
open
to
question
by
the
taxpayer.
In
a
circular
letter
addressed
to
the
Collector
of
Customs
at
Montreal,
by
the
Deputy
Minister
of
Customs
and
Excise,
dated
September
2,
1924,
it
is
stated
that
under
the
provisions
of
this
regulation,
the
“consumption
or
sales
tax
is
to
be
computed
on
the
value
of
the
furs,
including
the
dressers’
and
dyers’
charges
for
dressing
and
dyeing’’.
The
letter
then
states
that
each
dresser
and
dyer
is
to
furnish
the
local
Collector
of
Customs
with
a
daily
statement
of
all
furs
received
by
him,
such
statement
to
show
the
names
of
the
owners
of
the
furs
and
the
number
and
kinds
of
skins
received
;
and
these
statements
are
to
be
retained
by
the
Collector.
Then
it
is
directed
by
the
letter
that
a
competent
officer
of
the
staff
of
the
Collector
of
Customs
and
Excise
is
to
determine
the
value
of
such
furs
for
sales
tax
purposes,
such
valuation
to
be
determined
as
soon
as
possible
after
the
receipt
of
the
daily
statement
from
the
dresser
and
dyer,
and
such
officer
is
required
to
furnish
the
dresser
and
dyer
with
a
separate
memorandum,
showing,
in
respect
of
each
owner
of
furs,
the
amount
of
sales
tax
payable.
The
letter
then
proceeds
to
state
that
each
dresser
and
dyer
is
required
to
make
a
monthly
return
to
the
Collector
of
Customs
and
Excise
covering
the
amount
of
the
tax
on
the
furs
dyed
or
dressed
during
any
month,
and
to
attach
thereto
the
separate
memorandum
prepared
by
the
revenue
officer
just
above
referred
to.
All
these
directions
will
appear
to
have
been
followed
when
I
describe,
as
I
am
about
to
do,
the
procedure
followed
in
actual
practice
in
this
case,
by
the
revenue
officers,
the
suppliant,
and
the
customer
or
owner
of
the
furs.
It
will
be
sufficient
for
the
present
to
point
out,
that
if
the
authority
for
the
regulation
1
is
to
be
found
in
subsec.
3
of
sec.
19BBB,
and
I
think
it
is
only
to
be
found
there,
then
the
tax
became
payable
only
at
the
time
of
sale
of
any
specified
material,
to
a
licensed
manufacturer
or
producer,
or
a
licensed
wholesaler
or
jobber
;
if
it
were
enacted
under
19(c)
of
the
same
section
then
it
should
contain
only
such
directions
or
requirements
as
would
be
necessary
for
carrying
out
the
provisions
of
Part
IV
of
the
Act,
and
should
not
purport
to
effect
any
substantive
change
in
the
provisions
of
that
part
of
the
Act.
In
this
case,
the
following
procedure
was
in
practice
followed,
subsequent
to
the
regulation
coming
into
force,
in
determining
the
value
of
the
dressed
and
dyed
furs,
and
in
ascertaining
the
amount
of
the
tax.
This
procedure
will
disclose
that
the
tax
was
paid
by
the
suppliant
to
the
Collector
of
Customs
at
Montreal,
and
it
was
prepaid
or
repaid
the
tax
by
the
owner
of
the
furs.
The
suppliant
reported
daily
to
the
Department
of
National
Revenue
at
Montreal,
on
form
E1638,
supplied
by
the
revenue
officers,
and
this
would
show
the
number
and
description
of
skins,
the
name
of
the
owner,
the
nature
of
the
work
performed
upon
the
skins
by
the
suppliant,
and
the
customer’s
valuation
of
the
skins.
-
On
the
form
there
is
a
column
headed
‘‘Officer’s
Valuation’’,
to
be
filled
in
by
a
revenue
officer,
and
next
a
column
wherein
is
to
be
filled
out
the
amount
of
the
sales
tax
by
a
revenue
officer.
The
customer’s
valuation
of
the
skins
would,
in
practice
generally,
be
forwarded
to
the
suppliant
with
the
raw
skins
and
when
this
form,
Exhibit
5,
was
completed,
except
the
last
two
columns,
it
would
be
sent
to
the
proper
revenue
officer
by
the
suppliant,
when
the
valuation
of
the
fur,
and
the
amount
of
the
tax
would
be
finally
determined
by
the
former.
Then
form
E162,
Exhibit
4,
prepared
by
a
revenue
officer,
showing
the
name
of
the
skins,
the
quality,
the
value,
the
dressing
and
dyeing
charges,
the
total
value
for
taxation,
and
the
total
amount
of
tax
payable,
would
be
forwarded
to
the
suppliant.
The
amount
of
the
tax
was
determined
by
applying
the
tax,
at
the
rate
then
in
force,
upon
the
value
of
the
raw
skin,
or
the
dressed
and
dyed
fur,—it
is
difficult
to
say
which—
and
upon
the
charges
for
dressing
and
dyeing
the
furs,
the
combined
figures
constituting
the
aggregate
of
the
tax
on
each
dressed
and
dyed
fur.
The
total
tax
was
then
paid,
subject
to
rare
exceptions,
by
the
customer
to
the
suppliant,
and
by
it
paid
over
to
the
Collector
of
Customs
and
Excise
at
Montreal.
It
would
appear
that
the
suppliant
was
instructed
by
revenue
officers
not
to
part
with
the
possession
of
the
furs
until
it
had
been
paid
the
tax
mentioned,
by
the
customer.
The
suppliant
would
of
course
also
be
paid
for
its
charges
for
dressing
and
dyeing
the
fur.
The
revenue
officers
were
of
course
aware
of
this
practice,
and
apparently
it
was
not
intended
that
the
suppliant
should
bear
the
burden
of
the
tax.
It
therefore
appears
that,
at
all
the
times
material
here,
while
the
tax
was
paid
upon
the
dressing
and
dyeing
charges,
and
the
value
of
the
raw
skin
or
fur,
by
the
suppliant
in
the
first
instance;
yet
the
suppliant
was
prepaid
or
repaid,
by
the
customer,
the
tax
so
paid,
and
in
the
result,
the
suppliant
was
out
of
pocket
only
such
amounts
as
certain
customers
failed
to
repay
the
suppliant,
and
to
such
cases
I
shall
have
occasion
to
refer
later.
Some
further
facts
should
also
be
mentioned
before
proceeding
further.
In
the
period
from
May
31,
1921,
down
to
September
1,
1924,
when
the
regulation
came
into
force,
the
tax
was
paid
by
the
suppliant
only
on
its
dressing
and
dyeing
charges,
on
the
ground
I
assume
that
it
was
a
manufacturer
or
producer
of
goods.
After
September
1,
1924,
the
tax
was
paid
by
the
suppliant
on
the
amount
of
its
dressing
charges
and
the
value
of
the
skin
or
fur,
as
just
explained,
except
that
during
the
eight-month
period
between
January
1,
1924,
when
sec.
87
came
into
effect,
and
September
1,1924,
when
the
regulation
came
into
effect,
it
would
appear
that
the
sales
tax
was
paid
by
the
suppliant
only
on
its
dressing
and
dyeing
charges,
and
I
assume.
that
the
amount
so
paid
in
that
period
was
prepaid
or
repaid
the
suppliant
by
its
customers.
The
question
for
decision
is
reduced
to
somewhat
narrow
limits.
In
respect
of
the
period
ending
December
31,
1923,
the
suppliant
was
apparently
taxed
on
account
of
the
dressing
and
dyeing
of
furs
for
customers,
under
sec.
19BBB.
But
the
suppliant
was
not
taxable
under
that
section,
upon
the
ground
laid
down
in
the
Vandeweghe
case
by
the
Supreme
Court
of
Canada
in
regard
to
the
effect
of
sec.
86,
in
the
case
where
the
dresser
and
dyer
did
not
own
or
sell
the
furs.
Sec.
87
was
not
in
force
during
the
period,
and
neither
was
the
regulation
in
question.
I
think
it
is
beyond
controversy
that
the
suppliant
was
not
taxable
in
this
period.
Now
in
regard
to
the
second
period.
If
the
tax
were
imposed
upon
the
suppliant,
in
exercise
of
the
power
conferred
upon
the
Minister
by
subsec.
3
of
sec.
19BBB,
and
if
the
regulation
in
question
expresses
the
decision
of
the
Minister
to
exercise
such
power
and
the
manner
of
so
doing,
then
the
tax
was
not,
I
think,
payable
by
the
suppliant,
because
the
material
or
goods
on
which
the
tax
was
in
fact
imposed,
levied
and
collected,
was
not
sold
to
a
licensed
manufacturer
or
producer,
or
to
a
licensed
wholesaler
or
jobber.
The
suppliant
did
not
own
or
sell
any
dressed
or
dyed
furs
that
are
in
question
here.
Subsec.
3
of
sec.
19BBB
contemplates
an
actual
sale;
this
provision
would
seem
to
be
applicable
to
the
case
where
the
dresser
and
dyer
owned
the
furs
so
processed,
and
sold
them
to
a
person
licensed
under
the
Act.
I
understand
it
to
be
suggested
at
the
trial,
by
counsel
for
the
Crown,
that
the
regulation
was
enacted
because
there
was
an
attempt
on
the
part
of
some
licensed
persons,
in
some
way,
to
evade
the
tax
in
connection
with
dressed
or
dyed
furs.
Further,
I
seriously
doubt
if
the
Minister
had
any
authority
under
the
Act
to
cancel
the
licences
hitherto
issued
to
furriers,
so
called.
If
any
sales
tax
were
payable
by
the
suppliant
it
therefore
must
have
been
authorized
by
sec.
87(c),
and
such
contention
is
made
on
behalf
of
the
Crown;
and
I
understood
it
to
be
also
contended
that
the
regulation
in
question
was
enacted
by
virtue
of
the
general
powers
to
enact
regulations,
granted
by
subsec.
19(c)
of
sec.
19BBB,
and
as
being
necessary
4
‘for
carrying
out
the
provisions
of
this
Part’’,
and
therefore
a
necessary
regulation
in
the
carrying
out
of
sec.
87(c).
It
remains
therefore
to
consider
the
interpretations
to
be
placed
upon
sec.
87(c),
and
whether
the
regulation
is
applicable
to
sec.
87(c).
Under
sec.
87(c),
either
the
suppliant
or
the
owners
of
the
furs
which
it
dressed
and
dyed
were
liable
for
the
sales
tax,
or
sec.
87(c)
has
no
application
whatever
to
the
state
of
facts
here.
The
first
part
of
sec.
87
refers
to
goods
‘‘manufactured
or
produced’’,
and
‘‘the
consumption
or
sales
tax’’,
Just
as
in
sec.
86.
It
is
the
primary
purpose
of
sec.
87
to
confer
upon
the
Minister
the
power
to
determine
the
‘‘value’’
of
goods
manufactured
or
produced,
for
the
purposes
of
the
sales
tax
because,
in
the
cases
mentioned,
there
may
be
some
difficulty
in
determining
such
‘‘value’’.
I
am
unable
myself
to
see
how
there
could
be
any
difficulty
in
determining
the
value
of
dressed
and
dyed
furs,
once
it
was
determined
to
tax
them.
The
value
of
the
dressed
and
dyed
furs
would
be
the
same,
whether
the
owner
or
another
dressed
and
dyed
them.
If
the
Minister
in
fact
decided
there
were
any
difficulty
in
that
connection,
that
decision
I
apprehend
would
be
final
;
there
is
no
suggestion
in
the
evidence
here
that
the
Minister
decided
that
in
this
particular
trade
or
business
there
was
any
difficulty
in
determining
the
value
of
dressed
or
dyed
furs,
for
the
purposes
of
the
tax.
However,
I
cannot
see
that
I
can
say
that
the
Minister
could
not
say
that
this
was
a
case
where
he
could
exercise
that
power,
even
if
the
grounds
for
it
do
not
seem
convincing
to
me.
While
by
no
means
free
from
doubt,
I
am
not
convinced
that
I
should
disregard
sec.
87(c)
in
this
issue.
If
that
provision
were
not
intended
to
confer
upon
the
Minister
the
power
to
“value”
goods
for
the
purpose
of
the
tax,
I
can
see
no
reason
for
constituting
the
transaction
mentioned
as
a
statutory
sale.
It
is
difficult
for
me
to
see
any
reason
for
differentiating
between
the
case
where
the
owner
dresses
and
dyes
his
own
furs,
and
this
case,
yet
I
can
hardly
say
that
such
was
not
the
intention
of
see.
87(c).
The
circumstances
in
which
sec.
87
comes
into
play
are
referred
to
at
the
end
of
the
section
as
‘‘transactions’’,
which
is
as
appropriate
and
convenient
a
term
as
any
other
for
describing
the
several
matters
mentioned
in
the
sub-paragraphs
of
the
section.
In
so
far
as
87(c)
is
concerned,
it
refer
to
goods
manufactured
by
contract
for
labour
for
the
person
who
supplies
and
owns
the
raw
material
or
goods.
This
provision
of
the
section
was
never
intended,
I
think,
to
mean
that
the
“labour”
entering
into
or
applied
to
the
owner’s
goods
was
of
itself
the
whole
‘‘transaction’’,
or
that
the
value
of
the
labour
was
alone
subject
to
the
tax
and
payable
by
him
who
performed
the
labour;
the
“transaction”
relates
to
goods
manufactured
in
the
circumstances
therein
mentioned,
that
is
to
say,
by
the
owner
supplying
the
material
or
goods,
and
some
one
else
the
labour.
Supplying
the
raw
material
or
goods
necessarily
constituted
a
part
of
the
contract
or
transaction.
It
is
the
goods
of
the
owner,
manufactured
under
the
contract
by
the
labour
of
another,
that
are
to
be
taxed
as
a
sale;
‘‘manufacture’’,
I
think,
here
means
a
“manufacture”
for
and
on
account
of
the
owner
who
has
supplied
the
goods,
not
a
manufacture
by
the
person
who
has
performed
the
labour,
and
it
is
‘‘the
value’’
of
the
goods
after
the
“labour”
has
been
applied
to
or
bestowed
upon
the
goods
or
material
that
the
Minister
is
authorized
to
determine.
The
meaning
to
be
attributed
to
sec.
87(c)
is,
I
think,
that
in
the
case
where
goods
or
raw
material
are,
by
contract
for
labour,
manufactured
or
converted
from
one
commodity
class
into
another,
and
the
raw
material
or
goods
so
manufactured
or
converted
are
provided
by
the
owner,
and
their
value
is
not
included
in
the
contract
for
labour,
then,
the
Minister
may
determine
the
value
of
the
goods
so
manufactured
or
produced.
In
this
ease,
as
in
all
others,
the
contract
would
indicate
the
value
or
cost
of
the
labour
for
dressing
and
dyeing
the
furs,
and
it
would
also
indicate
that
the
raw
furs
were
to
be
supplied
to
the
dresser
or
dyer
by
the
owner,
but
the
contract
would
be
silent
as
to
the
value
of
the
raw
furs
or
the
dressed
and
dyed
furs.
‘‘
Value”?
in
sec.
87.(c)
means
that
the
value
of
the
raw
material
or
goods
to
be
supplied
was
not
included
in
the
contract
for
labour,
and
probably
it
was
for
that
reason
that
sec.
87(c)
was
enacted
so
as
to
provide
a
summary
and
final
method
of
determining
the
value
of
the
goods
manufactured
and
produced
under
such
conditions.
There
is
no
suggestion
in
sec.
87
(c),
so
far
as
I
can
observe,
that
the
person
performing
the
labour
was
the
person
to
be
taxed
for
the
goods
manufactured
or
produced,
and
I
do
not
think
that
was
intended.
If
“transactions”
means
that
the
contract
for
the
labour
involved
in
dressing
and
dyeing
the
furs
of
customers
was
taxable
as
a
sale
against
the
dresser
and
dyer
that
would
give
to
"
"
sale
”
a
meaning
utterly
foreign
to
the
whole
spirit
of
the
Act;
including
even
sec.
87(a),
(b)
and
(d).
Take,
for
example,
the
case
where
one
contracts
to
manufacture
clothing,
from
goods
and
material
supplied
by
the
owner
;
it
seems
impossible
to
believe
that
the
legislature
intended
that
in
such
a
case
the
contractor
should
be
liable
for
the
sales
tax,
or
that
such
labour
was
intended
to
constitute
a
sale.
One
could
understand
the
legislature
intending
by
sec.
87(c),
that
the
owner
of
the
furs
should
be
taxed,
and
why
goods
manufactured
under
such
conditions.
should
be
deemed
a
sale.
But
I
cannot
believe
that
sec.
87(c)
was
intended
to
mean
that
tne
dresser
and
dyer
of
furs
which
he
did
not
own,
could
not
sell,
could
not
consume,
and
which
I
think
he
was
bound
to
deliver
back
to
the
owner
on
payment
of
the
labour
charges,
should
be
made
liable
for
the
tax,
and
put
to
the
possible
inconvenience,
annoyance
and
expense,
of
paying
the
tax
in
such
circumstances.
If
"‘transaction’’
here
relates
only
to
the
labour
of
dressing
and
dyeing,
then
the
dresser
and
dyer
would,
at
the
most,
I
think,
be
taxable
only
on
the
contract
price
of
the
labour,
but
that
is
not,
I
think,
the
meaning
or
intention
of
the
section.
The
regulation
does
not
seem
to
be
one
framed
for
the
purpose
of
assisting
in
the
determination
of
the
"‘value’’
of
the
goods:
manufactured
or
produced,
under
the
conditions
set
forth
in
sec.
87;
it
seems
to
be
legislation
and
not
regulation.
I
am
therefore
of
the
opinion
that
the
true
construction
of
sec.
87(c)
is,
in
so
far
as
this
case
is
concerned,
that
it
was
the
owner
of
the
dressed
and
dyed
furs—and
that
is
what
was
really
done
here—and
that
the
regulation
is
one
not
authorized
by,
or
pertinent
to,
this
section.
If
that
is
not
the
meaning
of
sec.
87(c)
then
it
is
arguable
that
the
section
is
inoperative
on
account
of
uncertainty.
Were
it
not
for
what
I
am
about
to
say
I
think
the
suppliant
would
be
entitled
to
recover
the
amount
claimed.
If
the
construction
which
I
place
on
87(c)
be
correct,
then
it
was
the
owners
of
the
furs
which
were
taxable,
and
they
could
not,
I
think,
recover
the
moneys
paid
by
them
on
account
of
the
tax,
from
either
the
suppliant
or
the
Crown.
Now,
in
the
state
of
facts
explained,
can
the
suppliant
recover
such
moneys
from
the
Crown?
Mr.
Mann
suggested
that
on
equitable
grounds
the
suppliant
should
not
succeed,
because
the
moneys
it
paid
to
the
Crown
as
taxes
were
paid
to
it
by
the
owners
of
the
furs,
for
the
purpose
to
which
in
fact
they
were
applied
by
the
suppliant.
Mr.
Forsyth
argued
that
the
suppliant
having
paid
the
taxes
mentioned,
which
in
law
were
not
exigible
from
it,
it
was
entitled
to
recover
the
same,
and
the
court
need
not
and
should
not
enquire
if
such
amounts
were
prepaid
or
repaid
by
the
owners
of
the
furs,
to
the
suppliant,
or
what
disposition
the
suppliant
might
make
of
such
moneys
if
recovered.
As
I
have
already
explained,
the
moneys
which
the
suppliant
paid
to
the
Crown,
on
account
of
the
sales
tax,
were
in
fact
generally
prepaid
to
the
suppliant
by
its
customers,
and
any
amounts
that
were
paid
the
suppliant
after
the
latter
paid
the
tax,
was
owing
to
a
courtesy
extended
the
customer
by
the
suppliant,
and
such
postponed
payments
may
be
placed
in
the
same
category
as
those
that
were
prepaid.
It
seems
to
me
that
the
supplant
not
having
really
paid
the
taxes
itself,
but
rather
as
an
intermediary
for
and
on
account
of
the
customers,
it
has
no
right
of
action
against
‘the
Crown
to
recover
the
same.
It
is
true,
I
understand,
that
in
some
few
instances
the
suppliant
paid
the
tax
prior
to
the
receipt
of
the
same
from
some
of
its
customers,
and
were
never
repaid,
but
to
this
exception
I
shall
refer
later.
It
appears
to
me
that,
in
this
state
of
facts,
if
the
suppliant
could
now
recover
such
moneys
it
would
be
against
principle
and
justice;
and
it
would
not
be
a
case
of
giving
relief
to
the
suppliant
because
it
had
been
injured,
or
because
its
position
was
altered
to
its
disadvantage,
or
because
it
ever
expected
that
the
taxes
should
be
repaid
it
by
the
Crown.
It
is
not:
on
the
other
hand
unconscionable,
in
the
circumstances,
for
the
Crown
to
resist
repayment.
Even
if
the
tax
were
properly
payable
under
the
statute
by
the
owners
of
the
furs,
but
invalidly
or
by
mistake,
or
owing
to
some
irregular
procedure,
the
payments
were
made
through
the
suppliant,
the
latter
knowing
the
application
to
be
made
of
such
payments,
it
seems
to
me
it
should
not
now
be
able
to
recover
the
same.
If
the
suppliant
were
wrongfully
required
to
pay
the
tax
in
the
first
instañce,
it
wrongfully
received
the
same
from
its
customers,
and
I
do
not
think
the
suppliant
can
now
be
heard
to
say
it
is
entitled
to
recover
the
moneys
so
paid
just
because
it
was
once
in
possession
of
the
same.
It
is
a
principle
of
law,
I
think,
that
in
order
to
have
a
right
of
action
one
must
have
some
interest
in
the
thine
sought
to
be
recovered
or
the
right
sought
to
be
enforced,
unless
he
sues
in
a
representative
capacity
which
is
not
the
case
here.
The
suppliant
here
either
collected
the
tax
from
the
customer
for
the
use
of
the
Crown,
or,
it
paid
the
tax
for
the
customer
with
moneys
adyanced
by
the
customer.
The
Crown
seems
to
have
made
the
dresser
and
dyer
its
medium
for
the
collection
of
the
tax,
and
the
dresser
and.
dyer
acted
accordingly.
In
a
letter
dated
July
7,
1931,
addressed
to
the
Commissioner
of
Excise,
the
suppliant
refers
to
"
burdening
the
dresser
and
dyer
with
the
collecting
of
the
tax
.
.
.’.’.
In
any
event,
the
suppliant
does
not
appear
to
have
any
interest
or
right
in
the
taxes
received
from
its
customers
and
paid
over
to
the
Crown.
It
seems
to
me
that
it
is
the
owner
of
the
furs
alone,
who
has
a
right
of
action
for
the
recovery
of
the
taxes
paid,
that
is,
if
any
is
maintainable
at
all.
If
the
dresser
and
dyer
were
a
seller
of
the
furs
under
the
statute
it
was
liable
for
the
tax;
if
no
statutory
sales
were
made
by
the
suppliant
then
the
taxes
irregularly
paid
through
it
were
for
the
account
of
its
customers,
and
this
it
received
from
its
customers.
The
principle
which
I
have
stated,
I
apprehend,
expresses
the
rule
of
the
common
law.
If
it
is
the
law
of
Quebee
which
applies
here,
the
suppliant
relies
on
Articles
1047
and
1140
of
the
Civil
Code
of
Quebec,
then
Article
77
of
the
Code
of
Civil
Procedure,
would
seem
applicable.
That
article
is
as
follows:
"7.
No
person
can
bring
an
action
at
law
unless
he
has
an
interest
therein.
“Such
interest,
except
where
it
is
otherwise
provided,
may
be
merely
eventual.’’
The
suppliant,
in
my
opinion,
has
not
an
interest
in
the
moneys
in
question
here,
and
on
this
ground,
I
think,
it
must
fail.
Whether
the
tax
were
paid
over
by
the
suppliant
to
the
Crown,
in
error
of
law
or
fact,
matters
not
in
the
facts
of
this
case.
Therefore
I
think
the
petition
must
be
dismissed
subject
however
to
what
follows.
It
would
appear
from
the
evidence
that
in
some
instances,
the
suppliant
was
never
repaid
by
its
customers,
sales
taxes
which
it
had
paid
to
the
Crown,
owing,
for
example,
to
the
bankruptcy
of
such
customers,
either
before
or
after
the
return
of
the
dressed
and
dyed
furs
to
such
customers.
I
am
not
prepared
to
decide
presently
what
should
be
done
in
respect
of
such
tax
payments.
Upon
the
settlement
of
the
minutes
I
shall
be
pleased
to
hear
counsel
fully
argue
this
point,
and
until
then
it
is
reserved.
If
it
should
be
decided
that
the
suppliant
is
entitled
to
recover
such
amounts,
it
is
probable
that
a
reference
to
the
Registrar
or
Deputy
Registrar
would
be
made.
Until
then
I
also
reserve
the
question
of
the
disposition
of
the
costs
of
this
petition,
including
of
course
the
costs
relative
to
the
point
just
above
mentioned
and
reserved.
Judgment
accordingly.
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