Macdonald
C.J.B.C.
(dissenting)
:—First
some
preliminary
observations.
In
the
formal
judgment
under
review
it
is
declared
that
orders
numbered
11,
12,
13,
14
and
15
of
the
appellant
Lower
Mainland
Dairy
Products
Board
are
ultra
vires,
that
two
members
of
the
Board,
its
servants
or
agents,
be
restrained
from
compelling
the
respondents
to
comply
with
their,
provisions
and
that
appellant
Milk
Clearing
House
Ltd.
be
restrained
from
acting
as
the
designated
agency
pursuant
to
the
orders.
No
claim
was
made
in
the
prayer
for
relief
in
respect
to
Order
11
and
it
was
conceded
at
the
hearing,
as
I
recall
it,
that
it
was
included
in
the
judgment
by
error.
Order
No.
12
designates
appellant
Milk
Clearing
House
Ltd.
as
the
agency
to
market
the
regulated
products.
This
is
authorized
by
s.
5(a)
of
the
Act
and
by
10(a)
of
the
Scheme
later
referred
to:
No.
12
[13?],
a
penalty
order
is
authorized
by
s.
5(e)
of
the
Act
and
by
s.
10
(k)
of
the
Scheme.
No
objection
was
taken,
as
I
understood
counsel,
to
the
validity
of
these
two
orders
:
the
right
to
designate
an
agency
and
to
impose
penalties
is
clear;
it
was
contended,
however,
that
the
agency
designated,
viz.,
appellant
Milk
Clearing
House
Ltd.,
was
a
colourable
device
or
a
mere
sham.
As
to
Order
14,
known
as
the
"‘Base
and
Quota
Order,
‘‘
in
so
far
as
"
Base”
is
concerned,
having
reference
to
the
amount
of
milk
a
farmer
produces
on
an
average
for
a
certain
six
months”
period
respondents’
counsel
said
at
the
trial
""that
is
a
legitimate
regulation
that
every
one
agrees
with.’’
We
are
therefore
only
concerned
with
Orders
14
(in
part),
all
of
Order
15,
and
the
type
of
agency
referred
to
in
the
Act
and
in
Order
12.
The
controversy
herein
relates
therefore
to
the
validity
or
otherwise
of
two
orders
promulgated
by
appellant
Lower
Mainland
Dairy
Products
Board
constituted
by
His
Honour
the
Lieutenant-Governor
in
Council
to
administer
a
scheme
regulating
the
marketing
of
dairy
products
(also
established
by
the
Lieutenant-Governor
in
Council)
in
the
lower
Mainland
of
British
Columbia
pursuant
to
the
Natural
Products
Marketing
(B.C.)
Act,
R.S.B.C.
1936,
c.
165.
This
Act
with
detailed
provisions
outlining
the
powers
of
the
Lieutenant-Governor
in
Council
(s.
4)
and
of
the
appellant
Board
created
by
it
(s.
3)
was
declared
valid
by
the
Judicial
Committee
in
Shannon
v.
Lower
Mainland
Dairy
Products
Bd.,
[1938]
4
D.L.R.
81,
A.C.
708.
It
was
this
Board,
so
constituted
and
endowed
with
powers
under
an
intra
vires
Act,
that
passed
the
orders
held
to
be
ultra
vires.
Obviously
if
the
Board
kept
within
the
four
corners
of
the
"additional
powers”
conferred
by
s.
5
and
if
the
powers
contained
in
the
Scheme
devised
by
His
Honour
the
Lieutenant-
Governor
in
Council
and
vested
in
the
Board
by
s.
4
are
within
provincial
authority
no
debatable
question
should
arise
unless
considerations,
later
referred
to,
raise,
not
fanciful,
but
substantial
questions
of
law
and
of
fact.
It
was
held,
as
I
interpret
the
reasons
for
judgment
of
the
learned
trial
Judge,
that
although
on
their
fair
grammatical
construction
the
orders
are
"plain
on
their
face’’
the
Court
should
inquire
"‘as
to
the
motives
which
actuated
the
members
of
the
Board
in
passing
the
orders,’’
or
as
put
in
another
place
"‘as
to
what
was
the
purpose
of
the
members
of
the
Board
in
passing
the
orders.’’
That
inquiry
was
made,
inadmissible
evidence
in
my
opinion
was
received
and
colourful
language
employed
by
counsel
for
respondents
in
attacking
the
chairman
of
the
appellant
Board
which,
if
justified
at
all,
should
have
been
applied
to
the
Legislature
and
to
His
Honour
the
Lieutenant-Governor
in
Council,
the
real
authors
of
all
that
occurred,
and
the
conclusion
reached
by
the
trial
Judge
that
one
feature
of
the
Scheme
or
rather
of
the
orders
(the
Scheme
was
held
to
be
valid)
viz.,
the
appointment
of
appellant
Milk
Clearing
House
Ltd.
as
an
agency,
was
"‘an
imposing
facade,’’
"‘a
mere
sham’’
and
that
two
members
of
the
Board
‘‘over-stretched
their
hands’’
doing
violence
to
the
legal
maxim
quando
aliquid
prohibetur
ex
directo,
prohibetur
et
per
obliquum.
It
is
a
sound
legal
principle
that
when
anything
is
prohibited
directly,
it
is
also
prohibited
indirectly
;
if
however
there
are
no
facts
to
which
the
maxim
can
adhere
it
is
of
no
utility
here.
The
appellant
Board
was
not
prohibited
directly
from
doing
any
single
act
outlined
in
the
orders
declared
to
be
ultra
vires;
it
might,
with
deference,
possibly
apply
to
the
trial
Court:
it
cannot
do
indirectly
what
it
cannot
do
directly,
viz.,
prevent
a
Board
legally
constituted
from
passing
orders
legally
authorized.
It
was
also
found
by
the
trial
Judge
that
‘‘the
real
purpose
and
effect
of
the
impugned
orders
(inasmuch
as
some
producers.
of
milk
supply
one
market
and
others
another
market)
was
to
take
from
the
producer
supplying
the
fluid
market
a
portion
of
his
real
returns
and
to
contribute
the
same
to
other
producers.
for
the
purpose
of
equalization
and
that
being
so
I
am
satisfied.
the
orders
cannot
stand.”
It
will
be
found
upon
later
examination
that
this,
with
respect,
is
not
so;
however
the
suggestion
appears
to
be,
that
because
of
this
‘‘real
purpose’’
an
indirect
tax
beyond
provincial
authority
was
imposed.
Neither
the
trial
Judge
nor
counsel
for
respondent
stated
explicitly
that
a
public
body
with
delegated
powers
to
do
so
for
a
public
purpose
imposed
a
tax
:
a
direct
statement
is.
avoided.
My
brother
O’Halloran
for
example
in
his
reasons
states
"‘in
substance
they
create
an
indirect
tax;”
my
brother
Sloan
‘‘in
their
real
purpose
and
effect’’
they
‘‘impose
an
indirect
tax’’
while
respondents’
counsel
in
his
factum
states
“in
pith
and
substance”
it
is
taxation.
Certainty
is
a
feature
of
taxation
legislation:
the
language
employed
must
be
clear
and
unambiguous.
Here
it
is
said
to
have
been
imposed
in
an
impossible
way,
viz.,
by
indirection
or
by
implication;
no
one
points
to
any
language
anywhere
in
the
Act,
in
the
Scheme,
or
in
the
orders,
unambiguous
or
otherwise,
imposing
a
tax
:
hence
the
submission
must
be
that
unambiguous
words,
or
in
fact
any
words
at
all
directly
revealing
or
indicating
a
tax
are
unnecessary;
it
is
enough
if
in
substance
a
tax
is
imposed
by,
I
assume,
the
orders,
because
by
no
ingenuity
can
it
be
found
in
the
Act.
I
can
understand
one
saying
that
in
substance
certain
words
mean
thus
and
so
:
where
however
no
words
can
be
found
remotely
indicating
that
the
subject-matter
referred
to
is
taxation
it
is
impossible
to
say
that
in
substance
it
is
taxation.
These
orders,
in
my
opinion,
either
reveal
a
tax
or
they
do
not:
there
is
no
middle
ground.
if
they
do,
I
venture
to
think
that
never
before
has
a
taxing
statute
been
so
curiously
and
loosely
worded.
This
conclusion,
viz.
that
the
Board
was
either
given
powers
of
taxation
and
exercised
it,
or
exercised
powers
of
taxation
ex
mero
motu,
an
obvious
impossibility,
is
based
upon
the
decision
of
the
Judicial
Committee
in
Lower
Mainland
Dairy
Products
Sales
Adjustment
Committee
v.
Crystal
Dairy
Ltd.
[1933]
1
D.L.R.
82,
A.C.
168.
There
a
dairy
products
sales
adjustment
Act
enacted
in
1929
by
c.
20
was
considered;
it
was
held
ultra
vires
inasmuch
as
a
public
body,
a
"
Committee
of
Adjustment”
was
created
and
made
certain
levies
in
the
matter
set
out
in,
and
as
authorized
by
the
Act
itself.
These
levies
were
held
to
be
taxes.
I
shall
later
show
why
it
was
called
a
tax
and
point
out
the
wholly
different
situation
with
which
we
are
concerned.
Were
it
not
for
that
decision
the
present
action,
in
my
judgment,
would
not
have
been
brought;
the
trial
Judge
referred
to
it:
the
judgment
is
based
upon
it.
The
case
put
forward
is
that
by
the
impugned
orders
(it
cannot
be
said
by
the
Act,
as
it
is
intra
vires)
an
attempt
was
made
to
circumvent
that
decision,
as
if
that
mattered,
so
long
as
powers
conferred
on
the-
Legislature,
not
by
the
Courts
but
by
the
B.N.A.
Act,
an
Imperial
Statute,
were
utilized.
It
is
enough
to
say
that
none
of
the
powers
thus
conferred,
made
use
of
in
enacting
the
orders,
were
destroyed
or
declared
beyond
provincial
competency
by
the
Crystal
Dairy
case:
they
relate
to
property
and
civil
rights.
It
is
a
contradiction
in
terms
to
say
that
if
on
their
fair
construction
the
orders
are
found
to
be
clearly
authorized
by
the
Act
and,
as
the
trial
Judge
correctly
found,
by
a
valid
Scheme,
they
can
be
read
as
doing
something
other
than
the
plain
intendment
of
the
words
suggest.
The
words
of
the
present
Chief
Justice
of
Canada
in
Re
Reciprocal
Insurance
Legislation,
Craigon
v.
The
King,
Otte
v.
The
King,
[1924]
1
D.L.R.
789
at
p.
795,
A.C.
328,
41
Can.
C.C.
336
at
p.
343,
where
he
stated
that
granted
there
is
an
absolute
jurisdiction
the
words
of
a
statute
“must
take
effect
according
to
the
proper
construction
of
the
language
in
which
they
are
expressed’’
are
applicable
to
these
Orders.
By
the
orders
it
is
submitted
apparently—and
if
I
appear
to
be
indefinite
it
is
because,
apart
from
the
maxim
referred
to,
no
concrete
propositions
of
law
were
put
forward—that
the
appellant
Board
in
substance
did
what
the
‘‘Committee
of
Adjustment”
did
under
the
1929
B.C.
Statutes,
c.
20,
viz.,
impose
an
indirect
tax.
Of
course
if
this
Act
or
the
orders
are
similar
in
form
or
even
in
substance
to
what
will
be
referred
to
hereafter
as
the
1929
Act
declared
to
be
ultra
vires
the
inquiry
is
at
an
end.
It
is
not
boldly
stated
that
an
examination
of
that
decision
by
the
methods
lawyers
properly
follow,
viz.,
by
reading
it,
coupled
with
an
examination
of
the
present
Act,
the
Scheme
and
the
orders,
will
disclose
an
indirect
tax.
That
process
of
ratiocination
is
not
followed;
questions
of
alleged
colourability
were
introduced
at
the
trial;
evidence
was
taken,
not
to
clear
up
ambiguities
or
to
show
in
substance
what
the
orders
meant,
but
to
show,
strangely
enough,
that
something
entirely
proper
occurred,
viz.,
an
attempt
(I
think
a
successful
attempt)
in
drafting
the
Act,
the
Scheme,
and
the
orders
to
avoid
conflict
with
the
Crystal
Dairy
decision
and
to
avoid
the
imposition
of
a
tax.
I
do
not
understand
how
this
proper
use
of
legislative
authority
can
be
made
the
basis
of
an
action.
We
know
conflict
with
the
Crystal
Dairy
decision
was
avoided
by
the
Act:
it
is.
intra
vires:
I
doubt
if
it
was
suggested
to
the
Courts
that
it
was.
so
drawn
that
an
indirect
tax
might
in
some
way
find
shelter
under
it.
That
being
so—the
Act
authorizing
the
orders
being
intra
vires,
it
is
seriously
submitted
that
if
the
orders
are
literally,
grammatically,
in
fact
and
in
substance,
within
the
four
corners
of
the
Act
and
an
authorized
Scheme
established
by
the
Lieutenant-Governor
in
Council
and
relate
to
provincial
matters,
there
is
still
a
further
question
to
discuss.
It
is
not
said
in
the
reasons
for
judgment
that
these
orders
placed
beside
that
decision
must
be
regarded
as
bad
:
yet
that
is
the
result.
In
Edwards
v.
Hall
(1856),
25
L.J.Ch.
82
at
p.
84,
Cranworth
L.C.
said:
‘‘T
never
understood
what
is
meant
by
an
evasion
of
an
act
of
parliament;
either
you
are
within
the
act
of
parliament
or
not
.
.
.
.
If
you
are
not
within
it,
you
have
a
right
to
avoid
it,
to
keep
out
of
the
prohibition;
if
you
are
within
it,
say
so,
and
then
the
course
is
clear.
”
This
language
is
equally
applicable
to
the
orders
and
to
a
decision
by
the
Courts:
one
is
either
within
or
outside
their
purview.
These
orders
in
their
practical
results,
it
is
said,
accomplish
what
was
condemned
by
the
Judicial
Committee
in
the
Crystal
Dairy
case;
that,
with
respect,
is
not
so.
It
was
not
there
decided
that
orders
such
as
we
are
concerned
with
must
necessarily
be
ultra
vires,
nor
was
any
marketing
policy
condemned;
it
was
confined
to
an
inquiry
whether
or
not
the
1929
Act
with
its
set-up,
not
this
Act
and
orders
with
a
different
set-up,
imposed
an
indirect
tax.
The
orders
are
not
objectionable
in
form—that
appears
to
be
conceded—nor
I
would
add
in
substance;
they
are
authorized
and
relate
to
subjects
within
provincial
powers
:
on
their
face
as
the
trial
Judge
intimates
they
are
plain.
But
the
"‘face,
‘‘
we
are
told,
is
really
a
mask:
remove
the
mask
and
an
indirect
tax
is
revealed
but
not
to
the
naked
eye;
it
is
said
to
be
revealed,
with
respect
for
other
views,
by,
I
fear,
a
process
of
fallacious
reasoning.
We
cannot
find
anywhere
in
the
orders
or
elsewhere
indicia
of
taxation.
I
referred
to
the
need
of
unambiguous
words.
It
is
impossible
to
find
a
tax
unless
the
Legislature
by
an
Act
imposes
it,
or
delegates
that
right
to
a
public
body.
It
was
not
contended
that
the
appellant
Board
is
a
public
body
or
if
it
is
that
the
Legislature,
as
in
the
1929
Act,
delegated
to
it
authority
to
impose
levies;
yet
some
public
body,
with
delegated
powers,
whether
the
Clearing
House
Ltd.
or
the
Board,
must
exist
before
taxation
can
be
found.
We
have
the
benefit
of
many
constitutional
cases
determining
whether
or
not
a
tax
exists
and
if
so
whether
direct
or
indirect
but
none
I
am
aware
of
decides
that
a
tax
may
be
found
without
the
use
of
any
language
whatever
relating
to
that
subject.
Clearly
unless
a
Board
has
independent
powers
of
its
own
volition
to
impose
a
tax—and
it
has
not—it
is
necessary
to
find
words
in
the
Act
giving
it
powers
to
tax.
If
the
Board
attempted
to
impose
a
tax
it
would
be
acting
beyond
its
authority
but
that
case
is
not
put
forward.
Ever
since
Joseph
went
up
from
Galilee
to
Judea
to
be
taxed
(Luke,
Chap.
2,
verses
1-5)
in
fact
long
before
(2
Kings,
Chap.
23,
verse
35)
a
tax
has
always
been
imposed
by
sovereign
authority,
in
that
instance
Caesar
Augustus.
Only
a
sovereign
power
possessing
that
right
can
delegate
it
to
subordinate
bodies
like
municipalities
or
boards.
If
it
is
not
delegated
these
sovereign
powers
cannot
be
exercised
by
subordinates.
The
Legislature
as
a
sovereign
body
has
the
right
to
tax
by
appropriate
measures
;
it
did
not
take
that
right
by
this
Act
much
less
confer
it
on
the
appellant
Board.
We
need
not
consider
the
question
of
direct
or
indirect
taxes
:
the
point
is
have
we
a
tax
at
all
?
In
the
1929
Act
itself
the
Legislature
did
delegate
or
confer
the
power
to
tax
on
an
"Adjustment
Committee”
and
as
it
was
found
that
it
levied
an
indirect
tax
the
Act
was
held
invalid.
Section
2
of
that
Act
constituted
the
Adjustment
Committee.
Section
9
conferred
power
to
make
certain
levies:
it
was
not,
to
compare
it
to
the
case
at
bar,
an
attempted
exercise
by
the
Committee
of
independent
powers
of
its
own.
Its
wide
powers
were
outlined
in
ss.
5
to
9.
Sales
were
permitted
by
producers
in
the
ordinary
course
and
the
full
amount
received
belonged
to
the
producers.
From
that
sum
received
by
sales
on
the
fluid
milk
market
an
amount
was
compulsorily
deducted
by
the
Adjustment
Committee
and
transferred
to
producers
who
received
a
smaller
return
from
sales
in
the
manufacturers’
market.
A
sold
in
the
fluid
milk
market
and
was
entitled
to
a
definite
sum:
B
sold
in
another
market
and
received
a
smaller
amount:
a
levy
or
tax
was
imposed
on
A
and
given
as
a
bonus
to
B
and
in
the
result
both
received
equal
amounts.
On
that
state
of
facts
it
was
held
a
tax
was
imposed
by
a
publie
body
for
public
purposes.
I
venture
to
think
the
Courts
will
not
go
further
in
determining
where
a
tax
may
be
found.
The
Judicial
Committee
did
not
decide
that
if
the
Legislature,
as
here,
provided
for
price-fixing
(and
the
Shannon
decision
shows
it
may
do
so:
it
is
in
the
Act)
and
provided,
not
for
free
sales
on
the
two
markets
at
market
prices
with
deductions
from
the
proceeds
received
by
one
and
a
bonus
to
the
other
but
rather
for
sales
at
a
fixed
price
for
the
amount
of
the
producers’
quota
sold,
not
in
the
open
market
(that
is
prohibited)
but
to
an
agency,
that
an
indirect
tax
would
be
imposed:
there
are
no
deductions
whatever
under
the
present
Act
and
orders,
no
bonuses:
all
are
treated
alike.
If
by
price-fixing
without
taking
anything
from
one
producer
and
giving
it
to
another
an
indirect
tax
is
disclosed
the
Act
should
have
been
declared
ultra
vires:
it
is
in
the
Act
the
power
to
fix
prices
is
found.
If
we
were
dealing
with
the
sale
of
two
grades
of
wheat
or
of
any
other
product
A
and
B,
one
commanding
a
better
market
than
the
other,
the
grower
of
the
better
grade
receiving
for
years
past
the
larger
returns
and
to
discourage
or
to
lessen
the
growth
of
Grade
A
wheat
and
to
increase
the
growth
of
the
other
the
appropriate
Legislature
decided
to
fix
a
common
price
for
both
grades
midway
between
the
two
they
could
do
so
without
creating
an
indirect
tax;
no
case
decides
otherwise.
That
too
would
be
equalization
of
returns:
it
is
not
so
therefore,
as
suggested,
that
where
this
occurs
there
must
be
a
tax.
It
would
be
useless
for
the
grower
of
Grade
A
wheat
to
say
that
in
the
past
he
received
more
for
his
product
and
that
his
real
returns
are
still
the
same.
That
is
what
is
said
here.
The
answer
is
"‘that
is
all
changed;’’
he
now
receives
a
fixed
price
regardless
of
grade.
Price-fixing
is
the
basic
feature
of
this
Act:
it
was
not
included
in
the
1929
Act;
in
fact
it
was
excluded
in
one
important
aspect,
viz.,
in
respect
to
consumers.
When
under
the
present
Act
the
power
to
fix
prices
was
held
to
be
valid
as
well
as
all
other
parts
of
the
Act
it
doesn’t
mean
that
prices
must
be
fixed
in
a
manner
satisfactory
to
the
Courts;
only
the
electors
can
complain
in
that
respect
:
the
power
of
price-fixing
is
there
:
it
is
as
wide
as
the
name
itself.
There
is
therefore
no
tax.
Let
us
examine
this
question
in
another
way.
I
said
to
respondents’
counsel
during
the
hearing
of
this
appeal,
at
all
events
in
substance
if
I
may
use
that
phrase
properly,
"
"
if
this
Act
had
been
the
first
Milk
Marketing
Act
enacted
in
this
Province
and
the
orders
in
question
had
been
passed
under
it,
with
the
agency,
later
referred
to,
provided
for,
and
with
the
Scheme
established:
in
other
words
if
there
had
been
no
Act
of
1929
and
no
Crystal
Dairy
case
could
we
set
these
orders
aside
as
ultra
vires
or
as
enacted
without
authority?’’
He
replied,
"‘the
task
would
be
more
difficult
as
no
evidence
would
be
available.
The
true
answer
is
that
sueh
an
action,
under
such
circumstances,
would
utterly
fail.
There
could,
of
course,
be
no
question
of
colourability
in
that
case—there
should
not
be
in
this
case—no
question
of
trying
to
circumvent
a
decision
of
the
Courts,
nor
of
creating
an
"‘imposing
facade.’’
How
could
it
be
otherwise
unless
the
present
orders
in
conjunction
with
the
Act,
on
their
proper
construction,
disclose
a
tax?
This
viewpoint
raises
curious
implications.
Let
us
suppose
that
the
dairymen
of
Nova
Scotia
procured
legislation
precisely
similar
to
this
Act,
in
fact
copied
it;
also
that
the
Board
passed
similar
orders
and
that
the
Scheme
contained
similar
powers.
Draftsmen
ought
to
be
familiar
with
decisions
of
the
Courts
based
on
the
type
of
legislation
they
are
drafting,
not
as
a
trap
for
the
unwary
but
as
a
benign
light
showing
how
far
Legislatures
may
or
may
not
go
in
any
direction:
if
they
find
a
decision
of
the
Judicial
Committee
reported
fifty
or
a
hundred
years
ago—there
is
no
magic
in
a
recent
decision—based
upon
a
comparable
statute
they
ought
to
fashion
their
legislation
around
and
about
it
in
such
a
manner
that
it
does
not
come
into
conflict
with
it
;
all
this
would
appear
to
be
elementary.
That
is
what
the
Legislature
did
in
enacting
this
Act:
they
avoided
conflict
with
the
Crystal
Dairy
decision:
they
did
not
impose
by
the
Act
itself
or
give
to
any
Board
authority
to
impose
an
indirect
tax
and
because
that
care
and
restraint
was
exercised
the
Courts
pronounced
the
Act
valid.
However,
the
Nova
Scotia
draftsmen
would
not
be
obliged
to
read
the
Crystal
Dairy
decision:
let
us
assume
they
did
not
do
so;
it
would
therefore
be
impossible,
as
in
the
case
at
bar,
to
attribute
a
design
to
evade
it:
to
speak
of
colourability,
or
of
the
"over-stretched
hand”
because
they
knew
nothing
of
these
elements
considered
vital
by
respondents
to
a
proper
consideration
of
this
case.
If
the
decision
under
review
is
right
the
Supreme
Court
of
Canada
would,
in
the
event
that
the
supposititious
Nova
Scotia
Act
with
its
orders
and
the
British
Columbia
Act
with
its
orders
came
before
it
for
adjudication,
be
compelled
to
hold
the
former
orders
good
and
the
latter
orders
bad.
Such
a
result
could
only
arise
through
confusion
of
thought
and
by
disregarding
legal
principles.
Let
us
again
test
it
in
another
way.
The
Legislature,
if
not
concerned
with
loading
the
Act
with
cumbrous
details,
could
have
included
in
it
every
single
subject-matter
contained
in
the
impugned
orders.
It
could,
by
the
Act
itself
not
only
provide
for
an
agency
generally
but
also
specifically
for
the
creation
of
a
Joint
Stock
Company
to
act
as
agent:
it
may
be
it
could
say
in
the
Act
that
the
Courts
must
not
call
it
a
sham.
It
could
provide
in
the
Act
that
sales
and
re-sales
could
be
made
to
and
by
the
agent,
and
to
and
by
none
others
at
fixed
prices,
worked
out
in
detail
in
the
manner
outlined
in
the
orders
inserting
every
detail
in
a
schedule
to
the
Act.
It
could
provide
for
one
market
and
for
a
basic
price
with
final
returns
computed
after
delivery
and
re-sale
precisely
as
outlined
in
the
Scheme
and
orders.
It
would
not
be
necessary
to
omit
from
the
schedule
a
single
detail
although
it
might
be
found
advisable
to
amend
the
Act
from
year
to
year:
that
is
not
material
to
my
point.
Had
the
Legislature
done
so
the
Courts
would,
at
least,
find
it
difficult—I,
of
course,
say
impossible—to
embark
on
the
inquiry
that
took
place
in
this
case.
The
Courts
ought
to
be
content
in
such
a
ease
to
look
at
the
Act,
read
it
intelligently,
obtain
evidence
if
necessary
to
remove
obscurities,
or
to
disclose
precisely
what
the
Legislature
was
doing;
it
should
read,
too,
the
decision
in
the
Crystal
Dairy
case
and
on
a
question
of
construction
of
statutes
decide
whether
or
not
this
Act
was
a
valid
exercise
of
provincial
powers.
If
that
course
had
been
followed
no
one
could
question
the
motives
and
bona
fides
of
members
of
the
Legislature
or
characterize
the
agency
itself
as
hocus
pocus,
to
borrow
a
phrase
from
the
armoury
of
respondents’
counsel.
It
would
be
equally
impossible
to
say
it
was
an
attempt
to
circumvent
the
Crystal
Dairy
case
unless
Legislatures
must
not
exercise
powers,
never
declared
beyond
their
competency
by
the
Courts,
and
clearly
within
it.
Would
such
an
Act
be
declared
ultra
vires?
Wherein
would
it
be
beyond
provincial
authority?
Why
should
different
principles
be
applied,
where
instead
of
placing
everything
in
the
Act
and
a
Schedule,
these
powers
are
delegated
to
a
Board
that
keeps
strictly
within
the
authority
given.
If
subordinate
bodies
exceed
their
jurisdiction
or
usurp
powers
approprite
proceedings
may
be
taken:
we
need
not
consider
that
until
excess
of
jurisdiction
or
usurpation
of
powers
is
suggested
:
no
one
has
pointed
to
a
line,
a
phrase
or
a
sentence
in
these
orders
and
said
in
respect
thereto
"
that
is
not
covered
by
authority.’’
I
shall
refer
to
the
covering
authority
later
to
remove
all
doubts.
The
truth
is,
with
deference
to
other
views,
a
Court
of
law
is
asked
to
give
effect
to
the
views
of
a
vocal
minority
of
producers
and
of
dealers;
it
is
asked
to
prevent
the
Legislature
from
implementing
legislation
declared
to
be
valid
:
because
nothing
but
implementation
occurred
or
was
about
to
occur
when
this
action
was
launched.
If
so-called
iniquitous
features
of
the
Act
and
orders
are
pointed
out
the
Court
should
also
hear
the
views
of
the
less
clamorous
majority:
I
know
all
this
is
immaterial
but
if
one
discusses
the
aspects
of
the
case
upon
which
respondents
rely
one
must
drift
into
irrelevancies.
It
at
least
has
this
relevancy—I
can
conceive
of
no
ground
for
speaking
of
"sham’
agencies,
and
of
‘‘ever
increasing
bureaucracy,’’
except
on
the
ground
that
this
is
unjust
legislation,
not
a
bona
fide
marketing
Act
and
that
the
Courts
should
not
permit
its
enforcement.
The
complaint
is
that
it
is
unjust,
or
as
it
is
said
illegal,
to
interfere
with
the
emoluments
of
those
who
hitherto
largely
controlled
the
fluid
milk
market.
Briefly
there
are
two
markets
for
milk,
the
fluid
market
referred
to,
and
the
market
for
manufactured
products,
the
former
more
lucrative.
All
producers
strive
to
sell
their
milk
in
the
best
market
;
the
result
is
apparent
;
prices
for
the
producers
in
a
buyers
‘
market
thus
created
are
depressed.
The
principle
of
the
Act
is
that
demoralization
of
prices
for
all
producers,
for
the
present
‘‘haves’’
as
well
as
for
the
"‘have-
nots,’’
will
eventually
ensue
if
all
are
permitted,
without
regulation,
to
compete
in
the
fluid
milk
market:
the
consumer
possibly
might
benefit
unless
disorderly
marketing
would
lead
to
abuses
detrimental
even
to
his
interests;
it
is
however
said
to
be
disastrous
to
the
producers.
Unless
all
the
producers
are
protected
in
securing
a
fair
return
every
one
suffers:
that
is
the
view
of
the
Legislature.
We
are
not
concerned
with
whether
or
not
that
view
is
sound:
it
is
not
our
concern:
I
only
refer
to
it
because
respondents’
counsel
vigorously
condemned
it,
and
made
free
use
of
epithets
not
without
advantage,
because
I
fear
they
assisted,
in
shaping
in
the
minds
of
the
able
Judges
the
idea
of
colourability.
He,
in
fact,
caused
an
emotional
disturbance
in
my
brother
Sloan
which
even
I
was
powerless
to
allay,
for
did
he
not
refer
in
his
reasons
to
‘‘the
specious
camouflage
erected
by
inferior
tribunals.’’
I
will
show
presently
that
if
there
is
camouflage
anywhere—and
with
deference
there
is
not—
it
is
practiced
by
the
Legislature
and
by
His
Honour
the
Lieutenant-Governor
in
Council,
not
by
any
so-called
inferior
tribunal.
This
view
of
congestion
in
the
fluid
milk
market
is
shown
to
be
that
of
the
Legislature
by
the
preamble
to
the
1929
Act
and
by
the
enactment
of
the
present
Act.
The
Legislature,
concerned
with
the
general
welfare,
believe
that
without
regulation
and
control
even
the
present
advantages
of
the
‘‘haves’’
in
the
fluid
milk
market
may
prove
to
be
illusory
and
short-lived;
in
other
words
they
will
lose
much,
if
not
all,
of
what
they
now
possess
through
disorderly
marketing
and
general
demoralization
of
prices.
These
views
I
repeat,
although
they
appear
to
be
rational,
may
or
may
not
be
sound;
again
we
are
not
concerned
with
policy:
the
Court
must
keep
on
its
own
side
of
the
fence.
If
they
are
not
sound
redress
should
be
sought
by
repeal
or
by
amendment
in
the
proper
forum,
not
in
the
Courts.
In
all
I
have
said
hitherto
I
have
assumed
that
on
the
fair
construction
of
the
language
employed
in
the
orders
they
are
strictly
within
powers
validly
conferred.
I
do
so
all
the
more
readily
because,
seemingly
in
support
of
my
own
view,
no
one,
as
I
understand
it,
suggests
anything
else:
certainly
the
trial
Judge
does
not
say
that
tested
in
this
way
they
are
bad.
Unless
one
looks
at
them
through
the
Crystal
Dairy
case,
using
it,
so
to
speak
as
a
mirror,
the
orders
are
‘‘plain
on
their
face:”
they
only
appear
to
be
distorted
into
another
meaning
when,
as
often
occurs,
the
mirror
is
not
properly
held.
Nor
did
respondents’
counsel,
as
I
understood
him,
submit
that
reading
the
orders
literally
and
grammatically
they
contain
provisions
beyond
powers
conferred.
He
did
not
say
that
the
orders
disclose
the
existence
of
a
public
body
authorized
to
tax
and
by
the
language
used
in
fact
imposed
a
tax
for
public
purposes.
That
conclusion
is
reached,
not
in
the
proper
way,
viz.,
by
reading
the
orders
in
precisely
the
same
manner
as
the
Judicial
Committee
read
the
sections
of
the
1929
Act;
it
is
reached
after
reading
and
interpreting
certain
evidence,
much
of
it
inadmissible
and
useless
for
our
purpose.
I
refer
now
to
the
place
in
the
Act,
the
Scheme
and
the
orders
of
Milk
Clearing
House
Ltd.,
an
incorporated
company
and
an
appellant
herein
restrained
by
injunction
from
performing
its
intended
functions.
If
there
is
any
merit
in
respondents’
case
it
centres
in
this
company:
it
has
been
called
"‘a
mere
sham”
and
an
‘‘imposing
facade
:
”
let
us
therefore
submit
it
to
detailed
examination.
It
was
to
this
company
I
referred
when
stating
that
provision
for
it
and
all
other
details
might
have
been
pro-
vided
for
in
the
Act
itself.
It
was
incorporated
under
the
Companies
Act
to
act
as
the
agency
contemplated
by
s.
5(a)
of
the
Act;
its
capital
was
fixed
for
the
time
being—it
could
be
increased
at
any
time—at
$10,000;
its
shareholders
are
producers.
It
was
never
intended,
it
was
submitted,
to
make
a
profit
like
an
ordinary
commercial
concern,
as
if
that
mattered,
and
generally
was
a
clever
device
invented
by
Mr.
Williams,
the
Chairman
of
the
Board,
to
circumvent
the
decision
in
the
Crystal
Dairy
case.
Indeed
so
much
ingenuity
has
been
expended—successful
so
far—in
attempting
to
show
that
this
agency
is,
as
counsel
put
it,
mere
‘‘hocus
pocus’’
created
for
some
vague
improper
purpose,
presumably
to
avoid
imposing
an
indirect
tax,
that
it
ought
to
follow
if
it
is
not
a
sham
respondent
cannot
succeed.
The
true
view
is
that
it
is
authorized
by
a
valid
Act.
There
is
the
further
point
that
even
if
it
should
be
regarded
as
a
sham
the
question
of
discovering
an
indirect
tax
is
not
advanced
one
iota;
the
only
result
would
be
an
hiatus
in
a
truncated
structure;
not
a
tax.
What
are
the
facts?
Is
it
a
creation
of
Mr.
Williams
the
Chairman
of
the
Board?
True
it
is
not
material
so
long
as
it
is
legal
but
I
am
endeavouring
to
lay
this
spectre
of
a
sham
and
a
device.
The
authority
to
appoint
a
single
agency
is
given
by
s.
5(a)
of
the
Act;
it
is
the
Act
that
authorizes
the
Board
“to
regulate
the
time
and
place
at
which
and
to
designate
the
agency
through
which
any
regulated
product
shall
be
marketed
‘
‘
and
“marketing”
is
defined
to
mean
buying
and
selling.
Here
we
have
authority
given
to
the
Board
by
an
intra
vires
Act
to
name
an
agency
to
buy
and
sell
the
regulated
product.
For
double
assurance
His
Honour
the
Lieutenant-Governor
in
Council,
not
an
‘‘inferior
tribunal,
‘
‘
was
authorized
by
the
Act
to
vest
in
the
Board
power
to
‘‘designate
the
agency
through
which
any
regulated
product
shall
be
marketed.”
(Scheme
10(a))
The
corporate
structure
of
the
agency
was
not
defined:
is
it
suggested
that
the
Board
could
not
designate
a
Joint
Stock
Company
to
act
as
agent?
As
stated
in
argument
the
Board
might
have
appointed
a
large
department
store
in
Vancouver;
if
so
would
it
be
‘‘a
mere
sham’’?
So
far
we
have
the
Board
doing
what
an
intra
vires
Act
authorized
in
language
too
plain
to
be
controversial.
It
was
submitted
that
the
word
‘‘through’’
in
s.
5(a)
of
the
Act
does
not
contemplate
sales
to
‘‘the
agency”
and
“by”
the
agency.
It
is
not
inappropriate
to
speak
of
this
as
marketing
‘‘through’’
the
agency;
if
some
slight
criticism
of
the
use
of
the
word
might
be
made
I
would
say
de
minimis
non
curat
lex.
I
merely
mention
the
point
to
dispose
of
it:
the
definition
of
"marketing''
and
the
wording
of
s.
5
clears
up
any
doubts.
The
trial
Judge
did
not
think
otherwise:
he
held
the
scheme
to
be
valid.
It
is
by
the
Scheme
of
His
Honour
the
Lieutenant-
Governor
in
Council
that
sales
"‘to''
and
"‘by''
the
agency
are
authorized
together
with
prohibition
of
all
sales
elsewhere.
(10
(a)
and
(c)).
“Marketing”
meaning
to
buy
and
sell,
with
a
prohibition
against
‘‘marketing’’
except
through
the
agency,
it
follows
that
it
alone
may
engage
in
buying
and
selling.
It
thus
appears
that
this
so-called
device
of
providing
an
agency
through
which
or
to
which
all
sales
must
be
made,
with
prohibition
of
sales
elsewhere,
is
authorized,
not
by
an
inferior
tribunal
with
indirect
motives
of
its
own,
but
by
the
august
tribunal
referred
to
:
the
device
or
so-called
sham
has
at
least
distinguished
parentage.
Everything
done
is
found
in
the
Scheme
and
in
s.
5
of
the
Act:
the
right
to
prohibit
sales
elsewhere
(el.
10(c)):
the
right
to
establish
one
agency
only
to
buy
and
sell
(el.
10
(a)
)
:
how
can
such
an
agency,
so
authenticated,
be
called
a
sham?
If
there
must
be
criticism
or
charges
of
camouflage
let
it
be
directed
at
the
Legislature
and
at
His
Honour
the
Lieutenant-Governor
in
Council,
including
the
Minister
of
Agriculture
as
one
of
its
members,
charged
with
the
supervision
of
legislation
of
this
nature,
not
at
the
Board,
which
without
the
slightest
departure
from
the
authority
conferred
carries
out
the
provisions
of
a
valid
Act.
The
foregoing
should
be
sufficient:
let
us
however
pursue
it
further:
this
agency
so
created
as
aforesaid
is
called
‘‘a
mere
sham’’
for
another
reason.
The
trial
Judge
said:
“It
is
pretended
that
it
was
so
incorporated
as
an
ordinary
commercial
concern
whose
object
is
to
buy
in
the
cheapest
market
and
sell
in
the
dearest
market
and
in
the
ordinary
course
of
trade
to
make
a
profit
for
its
shareholders.
I
think
the
more
one
examines
the
evidence
the
more
he
must
become
convinced
that
this
is
a
mere
sham.
I
do
not
believe
it
was
ever
intended
that
the
Clearing
House
should
make
any
profit
and
if
there
were
any
doubt
on
this
one
needs
only
to
examine
the
evidence
of
Mr.
Sherwood,
one
of
the
directors
of
the
company.
‘
‘
There
is
no
occasion
to
speak
of
pretence
when
the
purpose
of
its
creation
is
outlined
in
the
Act
and
Scheme.
It
is
not
stated
in
its
memorandum
of
association
that
it
is
formed
to
buy
in
the
cheapest
market
and
to
sell
in
the
dearest.
The
conclusion
that
it
is
“a
mere
sham’’
is,
with
deference,
reached
by
ignoring
the
objects
of
its
creation.
It
is
clear
from
what
I
have
outlined
why
it
was
created.
Oh
but
it
is
said
this
is
a
mere
device
to
avoid
imposing
a
tax.
Even
if
that
were
true
and
the
Board
could
itself
impose
a
tax
it
would
not
be
material.
If
that
word
must
be
used
we
should
at
least
say
"
lawful
device.’’
When
it
is
said
that
it
was
designed
to
interfere
by
price-fixing
with
returns
otherwise
received
by
some
producers
there
are
two
answers
(1)
it
is
legal
to
do
so
under
this
Act
and
(2)
the
attempt
to
regulate
marketing
might
as
well
be
abandoned
unless
the
Legislature
can
interfere
with
uncontrolled
competition
in
the
fluid
milk
market.
When
the
trial
Judge
finds
that
it
was
never
intended
that
the
Clearing
House
should
make
a
profit,
I
would
ask
is
it
any
less
a
company
or
an
agency
on
that
account?
As
a
matter
of
fact
a
spread
of
.040
was
provided
to
cover
expenses:
if
there
should
be
any
surplus
it
would
go
to
the
shareholders
as
profits.
It
is
true
there
was
some
confusion
as
to
whether
or
not
profit-making
was
intended:
views
mistaken
or
otherwise
on
this
point
are
not
material.
An
agency
thus
validly
created
for
specific
purposes
authorized
by
the
Act
cannot
become
non
est,
nor
yet
"‘a
mere
sham’’
either
by
mistaken
opinions
or
correct
opinions
as
to
its
objects.
The
Board’s
membership
may
be
altered
from
year
to
year.
Would
it
be
called
a
good
agency
in
a
year
where
its
members
held
the
proper
view
of
its
functions
as
outlined
in
the
Act
and
the
Scheme,
and
a
bad
agency
"‘a
mere
sham”
in
another
year
if
its
members
thought
that
profit
making
for
producer
shareholders
was
mainly
contemplated?
The
point
has
no
significance;
if
profits,
they
will
go
to
producers:
if
none
it
matters
not
at
all.
It
is
scarcely
necessary
to
add
that
since
the
decision
in
Salomon
v.
Salomon
&
Co.,
[1897]
A.C.
22,
it
is
impossible
to
speak
of
this
company
as
a
sham
organization—that
argument
was
rejected
there
for
less
valid
reasons.
It
is
at
present
a
skeleton
organization—and
that
is
regarded
as
proof
that
it
is
a
sham;
to
say
"
"
it
is
not
much
of
an
agency
’
‘
does
not
advance
respondents’
case
in
any
degree.
The
fact
is
it
never
functioned:
this
action
interfered
with
it
doing
so;
a
beginning
only
was
attempted.
It
has
in
fact
many
duties
to
perform,
but
legality
does
not
depend
upon
the
extent
of
a
company’s
activities?
It
is
said
to
be
a
“mere
facade’’
for
other
reasons,
viz.,
that
the
mode
of
delivery
of
milk
continued
as
in
the
past.
The
agency
does
not
take
physical
delivery
of
the
milk,
for
the
present
at
all
events,
nor
is
it
equipped
to
do
so;
hence
it
is
a
sham,
as
if
A
may
not
contract
to
sell
to
B
with
delivery
direct
to
C.
The
fact
that
by
Order
15
for
the
producer’s
quota
of
fluid
milk
he
is
to
be
paid
560
with
full
returns
ascertained
after
re-sales
by
the
Clearing
House
is
treated
as
further
evidence
of
a
sham
creation
as
if
members
of
a
group
could
not
sell
to
the
agency
at
a
unit
price
and
on
a
fixed
basis
with
final
returns
deferred.
Are
such
contracts
or
compulsory
transfers
beyond
provincial
powers
unauthorized
or
void
for
uncertainty
or
as
against
public
policy?
What
is
the
principle?
Events
may
prove
that
this
agency
is
far
from
being
a
sham
creation.
The
Board
might
have
provided—it
has
the
right—
as
appellants’
counsel
stated
in
argument
to
make
it
not
only
the
sole
purchaser
of
all
milk
produced
within
the
huge
area
affected
at
prices
fixed
by
the
Board
but
also
provide
for
direct
sale
and
delivery
with
its
own
equipment
to
consumers
without
the
intervention
of
the
respondents
in
this
action;
the
elimination
of
over
a
score
of
distributors
would
doubtless
result
in
reduced
costs
of
delivery.
The
Board
recognized,
for
the
present
at
all
events,
that
dealers
and
distributors,
whether
too
numerous
or
not,
had
their
own
investments:
hence,
whatever
may
occur
later,
at
the
inception
of
this
scheme
they
were
not
eliminated:
no
one
I
trust
will
take
this
as
a
suggestion
on
my
part;
I
am
merely
discussing
the
implications
of
treating
this
agency
as
a
sham.
It
is
not
without
significance,
although
it
is
true
that
a
minority
of
producers
oppose
this
legislation,
it
is
the
dealers,
not
producers,
who
are
the
plaintiffs
in
the
action.
Would
the
Courts
prevent
the
formation
of
one
great
agency
authorized
by
a
valid
act
to
buy
and
sell
direct
to
the
consumers
without
the
intervention
of
middlemen?
Such
a
company
controlling
the
whole
output
under
the
supervision
of
a
Board
fixing
prices
as
outlined
in
the
orders
would
be
strong
enough
to
procure
the
best
price
for
the
producer
and
through
eliminating
duplicating
distribution
costs
deliver
at
the
lowest
price
to
the
consumer.
If
the
present
organization,
so
limited
in
its
activities
at
present
is
a
Sham
what
word
should
be
applied
to
the
larger
creation?
Yet
if
this
judgment
is
right
that
could
not
take
place
:
it
suggests
the
need
of
exercising
the
greatest
care
in
confining
the
Court’s
activities
to
deciding
legal
problems.
Again
it
is
said
that
orderly
marketing
could
be
accomplished
without
this
agency.
This
is
a
statement
without
legal
significance.
Parliament
in
its
wisdom
provided
for
an
agency
:
had
it
authority
to
do
so?
no
other
question
is
open
for
discussion.
If
one
or
more
methods
are
available
why
may
not
any
one
of
them
be
employed?
One
may
take
a
longer
road
home
to
avoid
a
pitfall
so
long
as
one
does
not
commit
a
trespass
in
doing
so.
These
conjectures
are
beside
the
point.
One
could
point
to
many
valid
reasons
for
its
creation:
its
possibilities
have
been
referred
to.
Respondents
are
not
satisfied
unless
machinery
is
erected
to
disclose
a
tax.
A
basic
fallacy
in
respondents’
submission
is
that
having
once
dealt
unsuccessfully
by
the
1929
Act
with
a
specific
subject-
matter,
viz.,
relieving
the
evils
that
ensue
through
all
producers
attempting
to
share
in
the
limited
fluid
milk
market
it
is
not
possible
to
deal
with
the
same
subject-matter
by
other
legislation
or
orders;
such
a
view
is,
with
respect,
wholly
fallacious.
The
present
Act
being
intra
vires
they
must
contend
that
it
does
not
deal
with
that
subject-matter;
in
other
words
does
not
interfere
with
the
right
of
all
producers
to
sell
where
they
will
and
to
obtain
without
interference
returns
formerly
received.
But
that
is
not
so.
It
is
the
intra
vires
Act
that
sets
up
entirely
new
methods
of
marketing
and
provides
for
the
agency
giving
it
the
right
to
buy
and
to
sell
at
fixed
prices.
I
have
not
discussed
the
orders
in
detail
for
the
reason,
among
others,
that
no
one
ventures
to
say
that
in
any
single
particular
they
are
not
authorized
by
the
Act
and
Scheme
and
do
not
relate
to
intra
vires
subject-matters.
It
is,
of
course,
clear
that
the
Scheme
is
in
the
same
position
as
the
Act
so
long
as
it
does
not
depart
from
the
provincial
domain.
So
far
as
looking
at
the
orders
to
see
if
they
are
authorized
is
concerned,
they
are
in
reality
disregarded
by
respondents’
counsel
and
having
laid
them
aside
the
contention
is
advanced
that
there
is
in
reality
no
sale
to
the
agency
at
all
and
no
re-sale
by
it
to
the
dealers
(dairies)
;
the
agency
is
"‘a
mere
dummy’’
designed,
I
assume,
by
the
Legislature
in
the
first
instance
and
by
His
Honour
the
Lieutenant-Governor
in
Council
in
the
second,
to
conceal
the
real
transactions
in
which
it
does
not
act
qua
purchaser.
To
one
imbued
with
this
view
it
appears
to
be
useless
to
say
that
the
Act,
the
Scheme
and
the
orders
provide
for
a
sale
to
and
a
re-sale
by
the
agency
:
that
is
the
only
real
sale
that
takes
place
because
no
other
kind
of
transaction
is
dealt
with
anywhere.
Yet
in
respondents’
factum
and
in
oral
submissions
we
are
asked
to
accept
the
view
that
there
is
really
a
sale
direct
by
the
producers
to
the
dealers
just
as
under
the
1929
Act.
The
Board,
we
are
told,
merely
intervenes,
as
the
Adjustment
Committee
before
it,
to
take
part
of
the
proceeds
from
one
producer
and
give
it
to
another:
I
do
not
accept
that
view
because,
with
great
respect
for
other
views,
it
has
neither
facts
nor
logic
to
support
it.
Counsel
does
not
say
that
literally
there
is
a
sale
to
the
dealers:
he
says
that
in
reality
it
takes
place;
we
must,
we
are
told,
dispose
of
the
case,
as
if
it
did
occur.
All
this
suggests
failure
to
recognize
that
the
Act
under
review
is
not
only
a
new
Act
but
an
intra
vires
Act
with
pricefixing
as
one
of,
at
least
its
basic
features.
If
under
it
marketing
may
be
conducted
as
under
the
1929
Act
with
deductions
made
as
formerly
some
one
blundered
in
permitting
it
to
be
held
intra
vires.
If
what
is
called
the
real
transaction
leads
to
an
indirect
tax
and
the
method
in
which
that
so-called
real
transaction
is
carried
out
is
succinctly
set
out
in
the
present
Act
and
the
Scheme
either
the
Act
or
respondents’
submissions
must
be
ulta
vires:
we
know
the
Act
cannot
be
questioned.
Marketing,
or
in
other
words
buying
and
selling,
is
I
repeat
authorized
by
the
Act
itself,
also
the
agency:
how
then
can
it
be
called
a
sham
or
a
puppet
designed
to
circumvent
something
or
other
without
inveighing
against
the
Act?
Is
the
complaint
that
the
agency
is
a
joint
stock
company?
there
would
be
no
merit
in
that
suggestion.
It
must
be
a
sham,
if
at
all,
because
to
put
it
as
broadly
as
possible
it
is
doing
things
illegal
or
things
unauthorized.
No
individual
or
entity,
acting
with
legal
authority?
pursuing
lawful
occasions,
can
be
regarded
as
a
sham,
nor
be
subject
to
interference
by
the
Courts.
It
must
be
said,
to
be
consistent,
that
the
Act
authorized
sham
sales.
If
an
intra
vires
Act
provides
for
an
agency
and
authorizes
sales
to
it
and
by
it
surely
when
it
does
that
very
thing
it
cannot
be
said
to
be
really
doing
something
else.
True
no
sales
occurred
thus
far:
the
Orders
were
not
implemented.
But
when
they
become
operative
it
will
be
difficult
to
say
that
a
transaction
where
a
producer
transfers
title
to
milk
to
a
company
on
terms
that
he
will
be
paid
for
it
at
a
price
to
be
determined
by
the
Board
is
not
a
sale.
I
have
already
dealt
with
the
suggestion
that
these
are
sham
sales
because
delivery
is
not
made
direct
to
the
purchaser;
also
the
claim
that
the
latter’s
activities
(I
would
add
for
the
present)
are
limited.
I
might
add
a
reference
to
the
sale
of
certified
raw
milk
in
bottles
governed
by
Order
15
R8
(h)
and
Order
XIV
R13;
this
it
is
said
is
a
glaring
example
showing
that
no
sale
occurs.
Under
Order
15,
Rule
14(d)
delivery
is
taken
on
the
vehicle
of
the
producer
and
after
certain
checking
re-delivery
is
made
there.
Of
course
if
there
is
any
virtue
in
physical
delivery
to
the
agency
and
the
Courts
insist
that
without
it,
there
cannot
be
a
sale,
that
can
easily
be
provided
for,
however
inconvenient.
It
is
clear,
however,
one
can
provide
for
delivery
anywhere,
on
the
vendor’s
or
purchaser’s
premises,
midway
between
the
two
or
even
by
the
use
of
a
symbol.
I
turn
to
the
Act
for
an
answer
to
all
allegations.
The
right
to
appoint
a
single
agency,
to
classify
milk,
to
determine
the
manner
of
its
sale,
the
price
at
which
it
is
to
be
bought
and
sold
and
to
regulate
the
dairy
business
in
the
greatest
detail
is
found
in
ss.
4
and
5
;
every
detailed
power
granted
is
intra
vires
and
no
departure
occurs
in
the
Orders
in
a
single
instance.
It
is
provided
by
one
of
these
Orders
(15)
that
for
the
producer’s
quota
of
fluid
milk
he
is
to
receive
560
and
because
all
are
treated
alike
(for
it
applies
to
all)
it
is
called
equalization
in
the
unwarranted
belief
that
where
that
word
can
be
used
it
cannot
be
price-fixing,
but
taxation.
The
Act
provides
for
pricefixing
in
the
broadest
fashion,
the
price
at
which
the
product
may
be
bought
and
the
price
at
which
it
may
be
sold
(Scheme
s.
10(g)).
Order
15,
s.
8,
after
providing
that
the
price
shall
be
according
to
classification
fixes
the
price
for
the
producers
quota
sold
at
the
agency
at
560
per
pound
butter
fat.
For
the
amount
of
fluid
milk
in
excess
of
the
quota
the
producer
gets
the
price
for
manufacturing
milk,
viz.,
25¢
a
pound
butter
fat.
If
in
computing
final
returns
it
results
in
equalization
and
equalization
means
an
indirect
tax
regardless
of
the
terms
of
the
Act
it
is
ultra
vires.
But
who
would
suggest,
in
any
event,
that
the
Legislature
by
price-fixing
cannot
provide
that
the
owners
of
products
of
different
values
should
sell
them
at
the
same
price
for
some
good
reason
or
for
no
good
reason
at
all?
The
right
to
make
classifications
(s.
5(a)
of
the
Act)
is
clear,
so
also
manner
of
distribution
methods
and
grading.
Sub-clause
(h)
of
s.
10
of
the
Scheme—and
this
is
important:
it
covers
basis
and
method
of
computation—gives
authority
to
determine
the
basis
on
which
the
producers
will
be
compensated
for
the
whole
or
any
portion
of
any
classification
of
the
regulated
product.
Is
this
authority
ultra
vires
?
It
is
not
so
stated:
what
merit
in
saying
that
when
it
is
carried
out
by
the
orders
it
results
in
an
indirect
tax?
If
the
power
itself
is
legal
using
it
cannot
have
illegal
consequences.
Power
is
given
too
under
10(a)
of
the
Scheme
"‘to
determine’
not
only
"‘the
manner
of
distribution’’
but
"‘the
quantity
and
quality,
grade,
or
class
of
the
regulated
product
that
should
be
marketed
7.e.,
bought
and
sold)
:
authority
in
meticulous
detail
is
provided
for
each
step
taken
;
it
is
to
disclose
that
fact
I
refer
to
the
orders.
It
appears
to
be
suggested
that
to
avoid
"‘equalization’’
the
Board
should
pay
one
price
to
one
producer
and
a
different
price
to
another
producer
for
the
same
classification
of
milk.
The
scheme
in
fact
prevents
discrimination
(s.
10(f)
)
:
if
respondents
had
advanced
the
case
that
there
was
a
breach
of
this
regulation
in
respect
to
the
former
emoluments
of
the
‘‘haves’’
in
the
fluid
milk
market
it
would
be
more
convincing
than
the
suggestion
that
somewhere
we
find
an
indirect
tax.
The
Board
acted
as
the
Act
contemplated
by
ss.
4
and
5—fixed
a
uniform
price
to
stabilize
the
market
and
to
regulate
the
industry
keeping
in
mind
that
a
sine
qua
non
to
regulation
and
to
orderly
marketing
is
the
prevention
of
a
disorderly
invasion
by
all
producers
without
control,
of
the
limited
fluid
milk
market
where
oonnly
exceeds
demand.
Even
if
true,
for
the
time
being
at
all
events,
that
some
producers
by
proximity
to
markets,
their
own
assiduity,
or
for
other
reasons
could
maintain
their
favored
places,
it
doesn’t
follow
that
they
are
beyond
interference
by
the
provincial
Legislature.
My
brother
O’Halloran
refers
to
the
compulsory
nature
of
the
sale,
advancing
for
the
first
time
the
view
that
lacking
a
voluntary
premise
it
cannot
be
a
sale.
It
is
said
that
because
the
Board
designated
an
agency
to
which
alone
milk
may
be
sold
and
from
which
alone
milk
may
be
bought
by
dealers
and
manufacturers
it
is
a
compulsory
sale
and
‘‘the
element
of
compulsion
dominates
all
others.’’
If,
with
deference,
the
suggestion
has
merit
the
attack
should
be
directed
elsewhere
as
these
sales
are
provided
for
in
the
Act.
No
producer
is
compelled
to
sell
to
anyone:
he
is
prohibited
from
selling
except
to
the
Agency
;
that
is
what
the
Act
authorizes.
A
word
on
the
submission
that
we
are
precluded
by
findings
of
fact
from
interfering
with
this
judgment.
Clearly
the
transactions
contemplated
by
Order
15,
viz.,
sale
or
no
sale
is
a
question
of
law:
the
Act
and
Orders
simply
must
be
construed.
We
are
in
the
same
position
as
the
trial
Judge
to
reach
a
conclusion:
also
equally
in
a
position
to
say
whether
or
not
the
members
of
the
Board
‘‘over-stretched’’
their
hand,
meaning
I
assume,
acted
without
authority.
The
same
observations
apply
to
the
so-called
findings
of
fact
that
the
agency
is
a
sham.
If
I
am
right
in
the
method
of
approach
the
trial
Judge,
with
respect,
misconceived
the
true
situation.
Even
if
there
are
any
material
findings
of
fact
they
were
with
deference
based
upon
inadmissible
evidence.
No
evidence
should
have
been
admitted
on
the
basis
of
an
erroneous
conception
of
the
applicability
of
a
maxim
referred
to
at
the
beginning
of
these
reasons.
As
to
one
item
of
evidence
there
should
be
no
question:
a
factum
prepared
by
the
chairman
of
the
Board
containing
submissions
to
this
Court,
when
acting
as
counsel
in
another
case,
where
a
different
question
was
under
review
was
received
in
evidence.
Counsel
may,
properly
enough,
take
one
position
today
and
another
tomorrow.
Evidence
too
was
admitted
under
cover
of
pleadings
containing,
in
my
opinion,
astonishing
allegations.
In
this
case
Turner’s
Dairy
Ltd.
v.
Williams,
[1940]
3
D.L.R.
214,
55
B.C.R.
81,
on
a
practice
appeal
this
Court
held,
(to
refer
to
one
reason
only)
inasmuch
as
the
statement
of
claim
as
it
then
read,
contained
no
allegations
against
certain
defendants,
viz.,
members
of
the
Board,
they
could
not
be
examined
for
discovery.
Following
this
decision
and
I
think
prompted
by
it
the
statement
of
claim
was
amended
by
alleging
a
conspiracy
by
Williams
and
Barrow
two
members
of
the
Board,
presumably
to
enact
these
Orders.
This
allegation
did
not
stem
from
a
desire
by
indignant
plaintifs
to
proceed
civilly
against
conspirators:
damages
were
not
sought:
not
even
asked
for.
It
should
be
called
conspiracy
de
convenance.
Two
members
of
the
Board
were
really
charged
with
conspiring
to
carry
out
the
Act.
Respondents’
counsel
told
us—and
I
have
no
doubt
it
is
true—that
Mr.
Barrow,
a
former
Minister
of
Agriculture
and
a
gentleman
of
the
highest
repute,
would
not
be
a
party
to
wrong-doing;
it
would
follow
that
if
it
exists
Williams
entered
into
a
conspiracy
with
himself.
A
lawyer
presumably
may
more
readily
be
attacked:
Mr.
Barrow,
however,
was
equally
a
party
to
the
enactment
of
these
Orders.
I
would
add
that,
in
my
opinion,
Mr.
Williams’
conduct,
is
not
open
to
criticism
:
he
did
not
over-stretch
his
hand.
As
to
the
law
we
were
referred
to
many
cases;
with
respect,
as
I
view
it
they
are
of
no
assistance.
It
is
not
necessary
to
cite
law
to
support
the
simple
proposition
we
are
concerned
with
and
eases
on
problems
entirely
different
are
of
no
assistance.
I
refer
to
some
of
the
principal
cases
relied
upon
by
respondents’
counsel
to
show,
not
only
their
inapplicability
but
also
that
any
deductions
of
value
support
appellants’
case.
If
it
is
clear,
as
I
think
it
is,
that
the
Legislature
directly
or
through
subordinate
bodies
may
make
use
of
every
scintilla
of
power
conferred
upon
it
by
the
B.N.A.
Act
and
on
the
fair
construction
of
the
powers
exercised
in
this
case
they
do
not
go
beyond
the
authority
given
the
case
is
simple.
It
is
true
that
in
considering
these
orders
or
any
document,
contract
or
Act
of
Parliament
one
must
regard
the
substance,
not
the
form:
but
where
is
the
difficulty
about
the
substance
or
in
other
words
the
subject-matter
of
the
orders
under
review?
Confusion
of
thought
ensues
by
attempting
to
show
that
these
orders
"
4
plain
on
their
face
’
’
cannot
be
construed
as
the
language
used
therein
suggests,
because
a
successful
attempt
was
made
by
the
Act
and
by
the
Orders
to
avoid
imposing
an
indirect
tax;
also
to
avoid
conflict
with
a
former
decision
of
the
Courts.
Respondents’
case
is
based
upon
the
erroneous
view
that
this
is
not
possible,
it
is
not
only
legal
but
also
perfectly
proper.
It
is
the
duty
of
the
Legislature
(1)
not
to
contravene
a
decision
of
the
Courts
and
(2)
not
to
impose
an
indirect
tax
yet,
doing
its
duty
in
these
respects,
is
treated
as
wrongdoing.
Let
me
illustrate
the
inapplicability
of
respondents’
case
by
a
reference
to
Westminster
Corp.
v.
London
&
North-Western
Ry.
reported
in
the
House
of
Lords
at
(1905),
74
L.J.
Ch.
629;
the
report
of
the
trial
and
the
decision
of
the
Court
of
Appeal
will
be
found
in
Volumes
71
and
73
respectively
at
pp.
34
and
386.
The
point
for
decision
was
whether
or
not
a
Board
with
authority
to
do
one
thing
in
fact
did
another,
viz.,
having
authority
to
construct
underground
lavatories
in
addition
constructed
a
subway.
It
had
authority
to
construct
conveniences
but
not
a
subway
from
one
side
of
the
street
to
the
other.
This
case
is
used
as
if
appellants
under
the
guise
of
carrying
out
an
Order
did
something
else
not
covered
by
any
order.
That
sort
of
case
may
come
up
in
the
future:
we
are
not
concerned
with
it
now.
This
case
too
was
advanced
to
justify
the
use
of
certain
objectionable
evidence.
If,
of
course,
this
Board,
under
the
guise
of
using
its
authority
to
construct
lavatories
in
addition
constructed
a
subway,
without
authority,
it
could
be
shown
by
evidence
that
it
acted
mala
fide
:
Certainly
where
there
is
authority
to
do
one
thing
only
and
under
colour
of
it
the
Board
does
something
else
it
is
acting
in
bad
faith
and
that
may
be
shown
by
evidence.
It
was
material
for
the
defendants
to
show
by
evidence,
if
possible,
that
to
construct
the
conveniences
it
was
unavoidable
that
a
subway
should
also
be
built.
It
was
held
by
the
House
of
Lords
that
although
the
structure
could
be
used
as
a
subway
for
underground
pedestrian
traffic
that
was
merely
an
incident
to
the
proper
use
of
the
authority
undoubtedly
granted:
in
other
words
to
provide
underground
entrances
meant
the
creation
of
a
subway.
In
the
result
it
was
found
that
the
Board
acted
within
its
authority.
That
was
the
whole
inquiry—looking
at
the
language
used
in
the
authority
conferred,
having
regard
to
evidence
confined
to
whether
or
not
the
building
of
the
subway
was
in
substance
merely
the
building
of
the
conveniences
or
something
else
in
addition
the
decision
given
by
the
House
of
Lords
followed.
There
was
no
reference
to
doing
anything
indirectly.
There
is
no
pretence
either
that
in
the
orders
in
the
case
at
bar
while
power
is
given
to
do
certain
things
the
Board
attempted
to
do
other
things;
that
is
why
the
case
is
of
no
assistance.
When
it
is
said
that
the
real
inquiry
is
whether
or
not
the
appellant
Board
in
substance
acted
within
authority
conferred
I
agree
at
once
but
in
ascertaining
what,
in
substance,
is
meant
by
the
orders
one
reads
their
contents;
if
upon
doing
so
it
is
found
they
are
not
objectionable
it
is
unnecessary
to
go
further.
If
it
is
clear
that
A
is
given
authority
to
do
a
certain
thing
easily
defined
and
in
itself
legal
it
is
impossible
to
say
that
this
in
substance
means
he
is
doing
or
trying
to
do
something
else.
I
suggest
therefore
it
is
elementary
to
say
that
it
is
necessary
to
show
these
orders
are
illegal
or
unauthorized
before
we
can
be
asked
to
follow
respondents
in
peregrinations
through
all
sorts
of
by-paths.
When
they
referred
to
seeking
the
substance
of
the
authority
given
in
the
Westminster
case
what
was
meant
was
this—look-
ing
at
the
authority
given,
does
it
in
fact
authorize
the
building
of
a
subway
as
incidental
to
the
conveniences?
So
too,
in
the
case
at
bar
to
find
in
substance
what
the
orders
mean
one
looks
at
them
to
see
if
they
contain
powers
validly
conferred
and
if
evidence
is
necessary
to
clear
up
obscurities
it
may
be
given.
The
Lord
Chancellor
pointed
out
at
p.
630
in
the
House
of
Lords
report
that
‘‘
Assuming
the
thing
done
to
be
within
the
discretion
of
the
local
authority,
no
Court
has
power
to
interfere
with
the
mode
in
which
it
has
exercised
it
.
.
.
.”
And
again
“When
the
Legislature
has
confided
the
power
to
a
particular
body,
with
a
discretion
how
it
is
to
be
used,
it
is
beyond
the
power
of
any
Court
to
contest
that
discretion.
’’
All
this
is
on
the
assumption
that
‘‘the
thing
done
is
the
thing
which
the
Legislature
has
authorized.’’
I
suggest
it
is
wholly
impossible
to
point
out
any
"‘thing
done’’
by
the
orders
not
authorized
by
the
Legislature;
again
‘
"
if
the
power
to
make
one
kind
of
building
was
fraudulently
used
for
the
purpose
of
making
another
kind
of
building,
the
power
given
by
the
Legislature
for
one
purpose
could
not
be
used
for
the
other.’’
Not
only
have
we
no
fraud
in
the
case
at
bar,
there
was
no
attempt
to
do
anything
not
authorized.
Nor
can
the
statement
of
Lord
Maenaghten
at
p.
631,
be
disputed,
viz.:
‘‘that
a
public
body
invested
with
statutory
powers
such
as
those
conferred
upon
the
corporation
must
take
care
not
to
exceed
or
abuse
itS
powers.
It
must
keep
within
the
limits
of
the
authority
committed
to
it.
It
must
act
in
good
faith.’’
A
Board
authorized
to
build
underground
conveniences
could
not
use
that
authority
to
build
a
subway;
it
must
act
in
good
faith
and
it
would
have
been
restrained
were
it
not
for
the
reasons
stated
:
certainly
it
would
be
mala
fide
to
use
powers
given
for
other
purposes
on
the
pretence
that
it
included
unauthorized
undertakings.
The
statement
of
Lord
Atkin
in
Ladore
v.
Bennett,
[1939]
3
D.L.R.
1
at
p.
7,
A.C.
468,
‘‘that
the
Courts
will
be
careful
to
detect
and
invalidate
any
actual
violation
of
constitutional
restrictions
under
pretence
of
keeping
within
the
statutory
field.
A
eolourable
device
will
not
avail,”
was
referred
to.
If
there
is
an
‘‘actual
violation’’
of
‘‘constitutional
restrictions’’
in
the
ease
at
bar
the
Board,
of
course,
should
be
restrained;
no
one
has
pointed
out
where
the
‘‘actual
violation’’
occurred.
It
can
be
said
too
as
stated
by
Lord
Atkin
at
p.
7
‘‘nothing
has
emerged
even
to
suggest
that
the
Legislature
.
.
.
had
any
purpose
in
view
other
than
to
legislate
.
.
.
in
relation
to
the
class
of
subject
which
was
its
special
care.
‘
‘
Nothing
has
emerged
to
suggest
that
the
Legislature
had
any
purpose
other
than
its
professed
purpose
of
assisting
the
dairy
industry
in
providing
for
an
agency
and
in
conferring
power
on
His
Honour
the
Lieutenant-Governor
in
Council
to
provide
for
sales
to
it
and
by
it
and
prohibition
of
sales
elsewhere.
There
is
not
the
slightest
ground
for
suggesting
that
the
Legislature
was
designedly
unjust
and
if
so
it
would
not
be
for
the
Courts
to
correct
it:
still
less
are
there
grounds
for
the
suggestion
that
one
member
of
the
Board
with
alleged
evil
intent
conspired
with
another
member
with
no
evil
intent
to
act
beyond
authority
conferred.
Reliance
was
placed
by
respondents’
counsel
on
Municipal
Council
of
Sydney
v.
Campbell,
[1925]
A.C.
338.
There
the
council
had
power
(1)
to
acquire
land
to
make
or
extend
streets,
and
(2)
in
addition
to
acquire
lands
to
carry
out
improvements
or
remodelling
in
any
part
of
the
city.
There
were
two
distinct
powers.
They
in
fact
acquired
land
to
obtain
its
increase
in
value
under
the
guise
of
securing
it
to
carry
out
a
remodelling
scheme.
It
was
a
case,
not
only
of
abusing
authority
conferred
but
going
beyond
that
authority.
The
limited
purpose
specified
for
which
the
Board
might
acquire
land
was
clear;
when
they
acquired
it
for
a
different
purpose,
viz.,
for
gain,
rather
than
to
beautify
or
remodel
they
did
so
without
authority.
Again
evidence
was
properly
adduced
to
show
that
they
never
had
any
intention
of
using
the
land
acquired
for
the
only
purpose
covered.
by
authority.
Again
too
the
Court
looked
at
the
language
used
in
conferring
the
authority
and
confined
evidence
to
ascertaining
whether
or
not
they
acted
beyond
the
powers
conferred.
In
that
ease
the
Board
travelled
beyond
the
authority
given;
in
our
ease
there
is
no
pretence
that
appellants,
on
the
proper
construction
of
the
orders,
literally
or
in
substance
did
so.
There
is
a
cross-appeal:
a
declaration
that
the
Scheme
particularly
s.
10(d)
should
be
declared
invalid
was
sought.
The
trial
Judge
held
it
valid.
I
have
said
enough,
without
further
discussion,
to
indicate
that
the
cross-appeal
should
be
dismissed.
I
would
allow
the
appeal.
0
’Halloran
J.A.:—This
appeal
lies
from
a
judgment
declaring
that
some
five
orders
of
the
appellant
Board,
while
in
form
appearing
to
be
intra
vires
regulation
of
the
marketing
of
milk
are
nevertheless
invalid,
because
in
substance
they
create
an
indirect
tax.
By
agreement
between
counsel
the
operation
of
the
orders
was
postponed
pending
the
result
of
this
litigation.
It
involves
a
decision
as
to
the
reality
of
the
transaction
embodied
in
the
plan
set
up
in
the
impugned
orders.
This
cannot
be
done
by
studying
the
orders
in
vacuo.
The
Court
should
learn
at
least
enough
about
conditions
in
the
milk
industry
to
understand
why
the
plan
came
into
being.
For
without
this
knowledge,
the
Court
cannot
appreciate
the
impact
of
the
plan
upon
those
conditions
and
thus
envisage
it
in
practice
as
it
was
intended.
I.
Milk
is
sold
in
the
fluid
and
manufactured
products
markets.
Much
more
of
the
milk
produced
is
eligible
for
the
fluid
market
than
that
market
can
absorb.
Hence
a
great
deal
of
it
must
be
sold
in
the
manufactured
products
market,
principally
for
the
production
of
butter,
cheese
and
condensed
milk,
but
at
a
much
lower
price
because
of
outside
competition
in
these
products.
Some
dairy
farmers
sell
all
or
nearly
all
their
milk
in
the
fluid
market,
while
others
have
to
be
content
with
the
manufactured
products
market.
It
is
said
for
the
former
that
better
herds,
locations,
business
methods,
good
fortune
and
other
factors
have
brought
this
about.
For
the
latter
it
is
said,
the
fluid
market
thereby
tends
to
concentrate
in
the
hands
of
the
few
and
larger
farmers,
and
the
great
bulk
of
the
smaller
farmers
cannot
gain
entry
into
the
more
profitable
fluid
market.
The
surplus
fluid
market
milk
available
tends
to
create
a
"‘buyer's
market’’
and
it
is
said
the
dealers
(dairies)
are
enabled
to
dictate
the
price
to
the
farmer.
These
conditions
generally
stated
have
been
the
cause
of
continuing
dissatisfaction
and
demands
for
legislative
control.
The
Provincial
legislation
declared
ultra
vires
in
Lower
Mainland
Dairy
Products
Sales
Adjustment
Committee
v.
Crystal
Dairy
Ltd.,
[1933]
1
D.L.R.
82,
aimed
to
remedy
this
situation
by
equalization
of
financial
returns
to
all
dairy
farmers,
no
matter
in
which
market
their
milk
might
be
sold.
By
that
legislation
passed
in
1929
the
dairy
farmer,
who
had
sold
his
milk
in
the
fluid
market,
was
subjected
to
what
was
called
an
adjustment
levy
for
the
benefit
of
the
farmer
who
had
to
sell
his
fluid
market
milk
in
the
manufactured
products
market.
But
the
Judicial
Committee
upheld
the
decision
of
this
Court,
vide
[1932]
2
D.L.R.
277,
45
B.C.R.
191,
which
in
turn
had
affirmed
the
judgment
of
the
learned
trial
Judge
Mr.
Justice
Murphy
(1931),
44
B.C.R.
508,
that
the
plan
imposed
a
tax
on
one
farmer
to
bonus
another
and
constituted
an
indirect
tax
beyond
the
power
of
the
provincial
Legislature.
The
present
statute
the
Natural
Products
Marketing
(B.C.)
Act,
R.S.B.C.
1936,
ce.
165
was
held
intra
vires
in
Shannon
v.
Lower
Mainland
Dairy
Products
Bd.,
[1938]
4
D.L.R.
81.
It
contains
no
provision
for
equalization
of
returns.
In
the
present
proceedings
the
respondents
attacked
the
orders
of
the
appellant
Board
on
the
grounds
they
are
a
colourable
device
to
bring
about
equalization
of
returns.
It
is
said
that
the
effect
of
this
eolourable
plan
in
practice
is
to
impose
an
indirect
tax.
It
is
necessary
therefore
to
understand
the
practical
working
out
of
the
plan
contained
in
the
impugned
orders.
All
dairy
farmers
in
the
area
are
prohibited
from
selling
their
milk
to
anyone
but
a
single
agency,
the
appellant
Milk
Clearing
House
Ltd.,
which
is
also
given
sole
power
to
sell
to
dairies
and
manufacturers.
II.
The
appellant
Board
has
fixed
the
price
per
pound
butterfat
the
Clearing
House
shall
pay
the
farmer
for
his
fluid
market
milk
and
has
also
fixed
the
price
at
which
the
Clearing
House
shall
sell
fluid
market
milk
to
the
dairies.
No
price
has
been
fixed
for
milk
sold
in
the
manufactured
products
market.
The
difficulty
here
arises
not
in
the
fixed
price
of
the
fluid
market
milk
payable
to
the
farmer
but
in
the
amount
of
money
payable
to
him.
For
the
farmer
is
not
paid
the
fixed
price
for
the
volume
of
fluid
market
milk
which
the
Clearing
House
purports
to
buy
from
him,
nor
for
the
volume
thereof
actually
sold
in
the
fluid
market
by
the
Clearing
House.
The
amount
of
money
he
is
paid
depends
upon
what
is
called
his
"‘quota,’’
which
it
will
be
seen
is
simply
a
formula
used
to
compute
his
equalized
amount
based
on
a
plan
of
equalization
of
returns.
The
Clearing
House
purports
to
buy
from
each
farmer
a
monthly
volume
equal
to
his
"
base,
‘
‘
a
term
used
to
describe
his
average
monthly
production
of
fluid
market
milk
over
a
six
month
period
com-
posed
of
the
last
three
months
and
the
first
three
months
of
the
year
before
the
orders
were
passed.
If
the
Clearing
House
has
sold
in
the
fluid
market
during
the
month,
only
60%
of
the
total
volume
of
the
"‘bases’’
it
purported
to
buy
from
all
farmers,
then
each
farmer’s
‘‘quota,’’
(a
term
used
to
describe
the
percentage
of
his
‘‘base’’
for
which
he
will
be
paid
the
fluid
price)
would
be
60%
of
his
‘‘base.’’
To
illustrate,
if
the
total
of
all
‘‘bases’’
was
100,000
pounds,
of
which
1,000
came
from
A,
1,000
from
B,
and
1,000
from‘C,
and
the
total
actually
sold
in
the
fluid
market
during
the
month
was
60,000
pounds,
then
A,
B
and
C
at
the
end
of
the
month
would
each
be
paid
the
fluid
price
for
600
pounds.
Then
let
us
carry
the
illustration
further;
suppose
all
of
A’s
milk,
half
of
B’s
milk
and
30%
of
C’s
milk
was
sold
in
the
fluid
market:
each
would
still
receive
the
fluid
price
for
600
pounds
and
the
manufacturer’s
price
for
the
balance.
It
will
thus
be
seen
that
farmer
A
would
receive
the
fixed
price
for
only
60%
of
the
volume
of
his
milk
sold
in
the
fluid
market,
although
all
his
milk
continues
to
be
delivered
direct
from
him
to
the
same
dairy,
and
all
of
it
is
sold
in
the
same
fluid
market
as
before
the
orders
were
passed.
That
occurs
under
the
plan
first,
because
only
60%
of
the
total
received
(viz.,
60,000
pounds
out
of
100,000)
was
sold
by
the
Clearing
House
in
the
fluid
market
at
the
fixed
price;
and
secondly
because
only
50%
of
B’s
milk
and
30%
of
C’s
milk
was
sold
in
the
fluid
market.
Then
what
happens
to
the
proceeds
of
the
other
40%
of
A’s
milk
under
the
plan?
The
answer
is
that
sufficient
is
deducted
therefrom
and
added
to
the
payments
to
B
and
C
to
make
them
equal
to
A’s.
That
is
the
way
the
plan
works
out
in
practice.
It
is
plainly
equalization
of
returns.
The
foregoing
analysis
makes
it
clear
that
not
only
is
equalization
of
returns
the
purpose
and
object
of
the
plan
contained
in
the
orders,
but
that
it
is
accomplished
just
as
effectively
as
in
the
Crystal
Dairy
case,
supra.
Here
it
is
true,
the
money
is
taken
from
farmer
A
before
his
monthly
settlement
while
in
the
Crystal
Dairy
case
it
was
taken
afterward.
But
the
principle
and
purpose
of
the
plan
is
the
same.
It
may
differ
in
form
but
not
in
substance.
Another
method
of
bookkeeping
is
employed,
and
a
different
routine
of
collection
is
pursued.
There
is,
of
course,
no
particular
virtue
in
the
words
“equalization
of
returns.”
These
very
words
were
not
used
by
Lord
Thankerton
in
his
speech
in
the
Crystal
Dairy
decision
but
the
meaning
they
express
here
was
adequately
conveyed
there
in
other
language.
The
term
has
been
used
in
the
evidence
and
in
the
argument
before
us
and
is
now
used
to
describe
in
apt
words
that
what
takes
place
under
the
impugned
orders
has
the
same
effect
in
"‘a
practical
business
sense’’
(to
use
the
term
employed
by
Sir
Lyman
Duff
and
adopted
by
Lord
Maugham
in
Re
Alberta
Legislation
post)
as
what
occurred
in
the
Crystal
Dairy
decision,
[1933]
1
D.L.R.
81
at
p.
84,
that
is
to
say
in
Lord
Thankerton
‘s
language:
"‘To
transfer
compulsorily
a
portion
of
the
returns
obtained
by
the
traders
in
the
fluid
milk
market
to
the
traders
in
the
manufactured
products
market.
‘
‘
III.
For
the
appellant
it
is
contended
the
plan
under
review
concerns
milk
sold
by
A,
B
and
C
and
all
the
other
farmers
to
the
Clearing
House
and
as
there
was
no
such
sale
in
the
Crystal
Dairy
case
that
decision
can
have
no
application
here.
Counsel
for
the
appellants
admits
the
farmers
have
to
sell
their
milk
to
the
Clearing
House
if
they
wish
to
remain
in
the
milk
business;
but
he
says
it
is
a
sale
nevertheless,
and
as
the
property
in
the
milk
then
passes
to
the
Clearing
House,
whatever
occurs
thereafter
is
of
no
interest
to
the
farmers.
There
are
two
answers
to
this
contention;
first
that
it
appears
on
the
face
of
the
impugned
orders
that
the
plan—of
which
the
compulsory
sale
is
an
integral
part—is
necessarily
premised
on
the
payment
of
equalized
amounts;
and
secondly
that
the
compulsory
sale
is
a
sham
sale
set
up
to
circumvent
the
effect
of
the
Crystal
Dairy
decision.
As
to
the
first
answer
that
the
plan
is
premised
on
the
payment
of
equalized
amounts;
the
price
payable
by
the
Clearing
House
to
the
farmer
is
fixed
at
so
much
per
pound
butterfat
and
the
volume
of
fluid
milk
received
by
the
Clearing
House
from
each
farmer
is
known
at
the
time
of
receipt.
One
naturally
asks
why
the
delay
until
the
end
of
a
monthly
settlement
period
to
enable
the
Clearing
House
to
calculate
the
amount
payable
to
the
farmer
for
his
fluid
market
milk.
Not
because
of
price
or
volume,
for
one
is
fixed
and
the
other
ascertained
immediately.
It
is
not
a
delay
in
payment
of
a
known
amount
of
money.
Nor
is
it
to
ascertain
what
percentage
of
the
farmer’s
volume
may
be
actually
sold
in
the
fluid
market,
for
that
does
not
enter
into
it.
I
see
no
escape
from
the
conclusion
which
the
previous
analysis
of
the
plan
compels,
that
it
is
to
calculate
an
equalized
payment
to
all
farmers
for
fluid
market
milk
during
the
settlement
period,
once
the
total
volume
of
sales
in
the
fluid
market
has
been
ascertained
for
that
period.
The
orders
reduced
to
what
they
really
mean
in
practice,
require
all
farmers
to
sell
their
fluid
market
milk
to
the
Clearing
House
for
an
amount
of
money
calculated
upon
what
is
an
equalized
return—that
is
to
say,
payment
of
an
equalized
amount.
The
payment
of
an
equalized
amount
to
the
farmers
is
thus
seen
as
the
determining
reason
for
the
compulsory
sale
provision.
Without
it
the
intricate
provisions
relating
to
‘‘quotas’’
would
be
purposeless.
That
is
why
it
is
said
the
compulsory
sale
is
necessarily
premised
on
the
payment
of
equalized
amounts.
Instead
of
being
merely
incidental
to
a
plan
of
orderly
marketing,
equalization
of
returns
emerges
as
the
pith
and
substance
of
the
plan
outlined
in
the
impugned
orders.
This
conclusion
should
dispose
of
the
question,
subject
of
course
as
to
whether
it
results
in
an
indirect
tax.
But
the
second
answer,
that
the
compulsory
sale
is
a
sham
sale
is
also
referred
to
in
view
of
the
importance
counsel
attached
to
it.
It
may
be
considered
under
two
branches;
;
first
that
it
is
not
a
contract
of
sale
wherein
the
property
in
the
milk
is
passed
to
the
Clearing
House;
and
secondly
that
the
purpose
and
object
of
the
orders
was
equalization
of
returns,
to
be
accomplished
by
a
compulsory
sham
sale
to
a
Clearing
House
set
up
as
a
figurehead
to
go
through
the
motions
of
a
pretended
purchase
hoping
thereby
to
circumvent
the
effect
of
the
Crystal
Dairy
decision.
As
to
the
first
branch;
the
arbitrary
and
one-sided
transaction
which
the
orders
require
to
take
place
between
the
Clearing
House
and
the
farmer
cannot
be
described
as
a
"‘sale’’
in
the
sense
that
term
is
used
in
our
law.
The
element
of
compulsion
dominates
all
others.
A
contract
of
sale
cannot
take
place
when
one
of
the
so-called
contracting
parties
is
virtually
deprived
of
the
right
to
give
or
withhold
his
assent
freely.
Calling
a
transaction
a
sale
does
not
make
it
a
sale
even
in
a
Statute,
if
in
substance
it
is
not
a
sale.
The
Milk
Clearing
House
Limited
is
in
reality
a
puppet
set
up
by
the
appellant
Board
to
carry
out
the
orders
of
the
Board
as
an
integral
part
of
the
plan
to
secure
equalization
of
returns.
Although
the
Clearing
House
is
incorporated
and
a
separate
legal
entity
from
the
Board,
yet
if
it
becomes
material
"‘to
consider
what
is
this
thing
which
is
described
as
a
corporation”
then
as
said
by
Lord
Buckmaster
in
Rainham
Chemical
Wks.
Ltd.
v.
Belvedere
Fish
Guano
Co.
(1921),
90
L.J.K.B.
1252
at
p.
1257:
"
4
It
may
be
established
by
evidence
that
in
its
operation
it
does
not
act
on
its
own
behalf
as
an
independent
trading
entity,
but
simply
for
and
on
behalf
of
the
people
by
whom
it
has
been
called
into
existence.”
And
vide
also
Palmolive
Mfg.
Co.
(Ontario)
Ltd.
v.
The
King,
The
King
v.
Colgate-Palmolive-Peet
Co.,
[1933]
2
D.L.R.
81
at
p.
89,
S.C.R.
131,
as
an
example
of
two
separate
legal
entities,
yet
held
in
fact
and
for
all
practical
purposes
to
be
merged,
as
one
was
merely
the
agent
of
the
other
subject
in
all
things
to
its
proper
direction
and
control.
This
so-called
sale
is
in
truth
not
a
sale
at
all
but
a
compulsory
transfer
to
the
Clearing
House
of
the
milk
of
A,
B,
and
C
and
other
farmers.
That
this
compulsory
transfer
is
designed
for
the
specific
purpose
of
achieving
equalization
of
returns,
which
could
not
be
operative
without
it,
is
fully
demonstrated
by
the
illustrations
given
of
the
plan
in
operation
and
the
foregoing
analyses.
It
is
confirmed
by
the
evidence
of
the
chairman
of
the
appellant
Board.
For
when
he
was
asked
the
reason
for
this
compulsory
measure
and
to
state
why
the
Clearing
House
could
not
operate
effectively
as
sole
agent
or
broker
for
the
sale
of
the
farmers’
milk
he
said:
"‘Under
that
arrangement,
(viz.,
Clearing
House
as
agent
of
the
farmer)
every
producer’s
milk
would
have
to
be
followed
right
through
until
it
was
sold
to
the
dealer.
If
producer
A
sold
100%
of
his
milk
to
dealer
X,
then
he
would
have
to
get
fluid
milk
price
for
100%
of
his
milk.
"'And
if
producer
B
sold
100%
of
his
milk
through
the
(same)
agency,
and
it
all
went
to
the
manufacturer
for
manufacturing
purposes—to
manufacture,
he
would
get
manufacturing
prices
only.’’
This
must
be
taken
to
mean
that
if
the
Board
acted
only
as
agent
or
broker
it
could
not
deduct
anything
from
one
farmer
to
equalize
the
payments
to
other
farmers.
To
my
mind
it
was
another
way
of
saying
the
Board
could
not
enforce
equalization
of
returns
without
a
compulsory
transfer
of
the
milk
and
therefore
the
compulsory
sale
provisions
were
inserted
in
the
orders.
The
evidence
of
the
chairman
of
the
Board
just
cited
leads
to
the
second
branch
mentioned,
viz.,
the
reality
of
the
transfer
of
the
milk
to
the
Clearing
House.
It
is
said
that
this
compulsory
transaction
is
not
a
transfer
in
substance
although
it
may
be
in
form.
The
learned
trial
Judge
found
as
a
fact
upon
the
evidence
before
him
that
it
was
an
colourable
device.
The
ambiguous
profit
situation
of
the
Clearing
House;
its
vague
financial
set-up;
its
inadequate
facilities
in
capital,
plant
and
equipment
to
conduct
operations
on
a
scale
entailed
in
the
bona
fide
purchase
of
milk
from
the
farmer
and
its
distribution
thereafter;
the
lack
of
any
considered
plan
to
raise
or
provide
capital
to
operate
in
a
commercial
way;
the
fact
the
Clearing
House
must
sell
the
milk
in
order
to
obtain
money
to
pay
the
farmers
for
it;
the
continued
delivery
of
the
same
farmer’s
milk
to
the
same
dealer
in
the
same
way;
;
the
fact
that
fixing
of
prices
to
the
farmer
and
to
the
distributors,
the
fixing
of
dealers
‘
“spreads”
and
other
regulatory
measures,
may
with
the
one
exception
of
equalization
of
returns,
all
be
enforced
without
the
compulsory
sale;
these
considerations
when
read
together
with
the
past
and
present
conditions
in
the
milk
industry
and
previous
attempts
to
cope
with
them,
and
the
circuitous
method
adopted
in
the
present
plan
to
ascertain
the
pro
rata
amount
payable
to
each
farmer
for
his
fluid
market
milk,
all
point
convincingly
to
the
conclusion
reached
by
the
learned
trial
Judge.
IV.
ADMISSIBILITY
OF
EVIDENCE.
This
finding
of
fact
involves
the
admissibility
of
evidence
to
show
the
real
scope
and
effect
of
the
orders.
The
admissibility
of
evidence
was
one
of
the
chief
points
in
the
argument
before
us.
Counsel
for
the
appellants
did
not
dispute
that
such
evidence
may
be
introduced
in
respect
to
statutes
and
Municipal
by-laws.
As
I
understand
his
argument
it
is
that
evidence
is
not
admissible
because
the
orders
being
ex
facie
valid,
the
authority
exercised
is
not
beyond
the
power
of
the
scheme
or
the
Legislature
to
delegate
to
the
appellant
Board;
it
is
said
the
same
rule
applies
as
in
the
interpretation
of
contracts,
viz.,
that
evidence
is
not
admissible
unless
ambiguity
arises
as
to
the
meaning
of
the
language
employed
in
the
orders.
He
asserted
that
ambiguity
did
not
exist.
But
it
is
not
the
construction
of
the
orders
that
is
in
question,
it
is
the
reality
of
the
plan
embraced
by
them,
and
it
is
particularly
the
reality
of
the
sale
or
transfer
of
the
milk
to
the
Clearing
House.
For
the
appellants
rely
upon
the
legality
of
that
transaction
to
escape
the
charge
of
imposing
an
indirect
tax.
It
is
said
by
the
respondents
that
the
plan
when
seen
in
its
reality
by
the
light
of
the
evidence
will
disclose
that
these
orders,
ex
facie
valid
in
form
though
they
may
be,
yet
in
substance
are
a
colourable
exercise
of
the
Board’s
power,
for
the
reason
that
the
Board
under
the
guise
of
exercising
its
own
power
is
in
reality
attempting
to
carry
out
an
object
beyond
its
powers.
It
is
said
that
under
the
colourable
cover
of
a
broad
scheme
to
regulate
the
milk
industry
the
appellant
Board
in
fact
embarked
upon
a
plan
of
equalization
of
returns
which
in
its
effect
imposes
an
indirect
tax.
It
must
be
conceded
that
if
the
Board
had
power
to
do
directly
that
which
it
is
charged
with
seeking
to
accomplish
by
indirection,
or
if
it
were
a
question
only
of
the
construction
of
orders
admittedly
within
its
competence,
then
appellant’s
objection
to
the
admission
of
evidence
would
be
on
stronger
ground.
But
if
equalization
of
returns
is
found
to
constitute
an
indirect
tax
as
charged,
then
no
matter
how
unobjectionable
the
orders
may
be
in
form
or
how
free
from
ambiguity
their
text
may
be,
yet
they
are
illegal
as
a
colourable
exercise
of
powers
which
the
Board
does
not
possess,
and
which
cannot
be
conferred
upon
it
by
its
parent
provincial
Legislature.
It
is
obvious
that
if
the
orders
do
in
effect
constitute
an
indirect
tax
then
they
are
invalid.
But
it
cannot
be
said
that
the
orders
may
not
be
colourable,
simply
because
they
are
apparently
valid
in
form
and
free
from
ambiguity
in
their
text.
Such
an
argument
would
be
a
denial
of
the
well
recognized
principle
that
the
substance
and
not
the
form
shall
govern.
Viewed
in
this
light
appellant’s
contention
is
reduced
to
this
proposition,
viz.,
admitted
that
the
orders
may
be
colourable,
yet
because
there
is
no
ambiguity
in
their
text,
evidence
may
not
be
introduced
to
show
they
are
merely
a
colourable
device.
The
statement
of
this
proposition
carries
its
own
rejection.
Use
of
legal
machinery
for
doing
an
illegal
act
will
not
purge
its
illegality,
nor
the
indirectness
of
the
means
rid
the
act
of
its
illegality,
per
the
Karl
of
Halsbury
in
Daimler
Co.
v.
Continental
Tyre
c
Rubber
Co.
(1916),
85
L.J.K.B.
1333
at
page
1338.
Re
Reciprocal
Insurance
Legislation,
[1924]
1
D.L.R.
789
at
p.
795,
41
Can.
C.C.
336
at
p.
343
was
a
case
where
the
impugned
legislation
was
ex
facie
valid.
Duff
J.
(as
he
then
was)
speaking
for
the
Judicial
Committee,
stated
the
principles
which
seem
to
govern
this
discussion.
His
Lordship
said
at
p.
795
D.L.R.,
p.
343
Can.
C.C.:
"‘Of
course,
where
there
is
an
absolute
jurisdiction
vested
in
a
Legislature,
the
laws
promulgated
by
it
must
take
effect
according
to
the
proper
construction
of
the
language
in
which
they
are
expressed.
‘
‘
This
"‘plain
meaning”
rule
advocated
by
counsel
for
the
appellants
might
be
in
point
here
if
the
effect
of
the
orders
to
which
objection
is
taken
were
within
the
competence
of
the
Board.
But
then
his
Lordship
referred
to
the
different
principle
which
applies
to
a
"‘law
making
body
of
a
limited
or
qualified
character,’’
and
said
that
in
such
a
ease:
‘‘obviously
it
may
be
necessary
to
examine
with
some
strictness
the
substance
of
the
legislation
for
the
purpose
of
determining
what
it
is
that
the
Legislature
is
really
doing.’’
Reading
these
two
excerpts
together
and
applying
them
to
this
case
it
should
follow
(1)
If
a
“law
making
body
of
a
limited
or
qualified
character’’
refers
in
a
particular
case
to
the
Dominion
Parliament
or
a
provincial
Legislature,
a
fortiori
it
must
include
an
inferior
law
making
body
such
as
the
appellant
Board,
which
is
the
creature
of
a
provincial
Legislature:
To
hold
otherwise
would
be
to
give
an
immunity
to
a
provincially
created
Board
not
enjoyed
by
its
parent
Legislature
or
the
Dominion
Parliament;
(2)
If
the
appellant
Board
is
of
a
limited
or
qualified
character,
then
examination
of
the
effect
of
its
orders
is
not
limited
to
the
proper
construction
of
the
language
in
which
they
are
expressed;
(3)
That
the
"‘substance’’
of
its
orders
may
be
examined
with
some
strictness
to
determine
what
it
is
that
the
Board
is
really
doing;
(4)
obviously
if
the
search
for
the
intent
of
the
Board
were
limited
to
the
form
of
the
orders,
no
occasion
would
arise
to
examine
their
"‘substance’’
with
"‘some
strictness’’
to
find
what
it
is
the
Board
"‘is
really
doing.”
That
examination
of
the
‘‘substance’’
of
the
orders
must
include
the
consideration
of
external
evidence
where
it
is
necessary
to
do
so
to
understand
the
working
out
of
the
orders
"‘in
a
practical
business
sense,’’
I
think
is
clear
from
what
was
said
both
by
Sir
Lyman
P.
Duff
C.J.C.
(with
whom
Davis
J.
concurred)
in
Re
Alberta
Legislation,
[1938]
2
D.L.R.
81
at
pp.
101-3,
S.C.R.
100,
and
by
the
Lord
Chancellor,
Lord
Maugham
in
the
same
case
in
the
Judicial
Committee
vide
[1938]
4
D.L.R.
433
at
pp.
488-9,
[1939]
A.C.
117.
Speaking
of
the
examination
of
the
effect
of
legislation
Lord
Maugham
said:
"
"
The
Court
must
take
into
account
any
public
general
knowledge
of
which
the
Court
would
take
judicial
notice,
and
may
in
a
proper
case
require
to
be
informed
by
evidence
as
to
what
the
effect
of
the
legislation
will
be.
ff
(The
italics
are
mine).
And
further
at
p.
439
having
said
it
is
not
competent
either
for
the
Dominion
or
a
Province:
"Under
the
guise
of
the
pretence
or
in
the
form
of
an
exercise
of
its
own
powers
to
carry
out
an
object
which
is
beyond
its
powers
.
.
.”’
The
Lord
Chancellor
observed:
‘‘
Here
again
matters
of
which
the
Court
would
take
judicial
notice
must
be
borne
in
mind,
and
other
evidence
in
a
case
which
calls
for
it.”
It
remains
to
be
determined
if
this
is
a
proper
case
for
the
Court
to
be
informed
by
evidence
as
to
what
the
effect
of
the
orders
will
be.
The
learned
trial
Judge
on
whom
the
initial
burden
fell
came
to
the
conclusion
that
it
was.
He
had
a
wide
judicial
discretion
in
that
respect.
In
my
view
he
exercised
it
in
accordance
with
correct
principles
and
no
injustice
has
resulted.
I
would
add
only
that
one
need
but
read
that
evidence
to
realize
that
the
legislative
history
and
surrounding
conditions
have
a
direct
bearing
on
the
effect
of
the
orders.
Such
evidence
is
essential
in
this
case
if
the
Court
is
to
have
knowledge
of
more
than
half
the
problem,
and
intelligibly
decide
if
the
Board,
under
the
guise
of
exercising
its
own
powers,
is
in
reality
attempting
to
carry
out
an
object
beyond
its
powers.
Even
if,
as
argued
by
appellant’s
Counsel,
the
orders
are
viewed
by
the
rule
which
he
contended
applied
to
contract
we
find
authority
against
the
proposition
that
evidence
is
not
admissible
to
determine
the
reality
of
the
plan
in
the
orders.
Le
Watson,
Ex
p.
Official
Receiver
(1890),
59
L.J.
Q.B.
394,
a
contract
which
was
in
form
a
hiring
agreement
was
held
to
be
in
substance
a
bill
of
sale.
The
Court
of
first
instance
and
the
Divisional
Court
both
held
that
the
form
of
the
documents
only
could
be
looked
at.
But
the
Court
of
Appeal
held
that
the
reality
of
the
transaction
was
one
of
fact
and
that
it
was
not
prevented
by
the
form
of
the
document
from
going
outside
it
and
enquiring
into
the
facts
to
see
whether
the
document
represented
the
real
transaction.
At
p.
398
Lord
Esher
M.R.
said
:
‘‘I
do
not
deny
that
people
may
evade
an
Act
of
Parliament,
but
they
never
will
succeed
in
so
doing
by
putting
forward
documents
which
contain
a
false
description
of
the
transaction,
and
the
Courts
will
always
go
through
those
documents
in
order
to
arrive
at
the
truth.
’
‘
The
Master
of
the
Rolls
said
further
at
p.
398
:
‘‘The
question
as
to
the
reality
of
the
transaction
is
one
of
fact,
and
although
the
document
may
be
looked
at,
it
is
only
a
part
of
the
truth.
’
The
above
decision
as
well
as
Maas
v.
Pepper,
[1905]
A.C.
102
were
recently
applied
by
this
Court
in
Monarch
Securities
Ltd.
v.
Gold,
[1940]
3
D.L.R.
124,
55
B.C.R.
70.
True
they
are
eases
of
contract.
But
they
are
now
referred
to
because
it
was
on
the
analogy
to
contract
that
counsel
for
the
appellants
advanced
his
strongest
argument
against
admission
of
evidence
to
show
the
reality
of
the
plan
set
up
by
the
impugned
orders.
The
problem
is
not
one
of
construction
but
the
reality
of
the
transaction.
This
being
so
we
should
over-rule
the
objections
taken
to
the
admission
of
evidence
which
properly
related
to
the
purpose
and
object
of
the
impugned
orders
and
the
reality
of
the
plan
set
up
therein.
The
evidence
objected
to
and
admitted
was:
(1)
the
ballot
form
ex.
6;
(2)
Marketing
Board
orders
3
through
9,
ex.
4;
(3)
the
evidence
of
E.
G.
Sherwood,
a
director
of
the
appellant
Milk
Clearing
House
Ltd.;
(4)
the
evidence
of
Charles
E.
Thompson
and
(5)
the
evidence
of
M.
8S.
Bryan
verifying
a
radio
speech
made
to
the
public
by
the
appellant
Williams
on
May
13,
1939,
when
he
was
introduced
and
spoke
as
chairman
of
the
appellant
Board;
(6)
the
evidence
given
by
the
appellant
Williams
in
cross-examination
at
the
trial;
(7)
discovery
evidence
of
Williams
and
Barrow.
The
discovery
evidence
of
Williams
was
first
objected
to
on
another
ground.
He
was
examined
for
discovery
as
an
individual
defendant.
However,
at
the
trial
counsel
agreed
to
treat
his
discovery
evidence
as
if
he
had
been
examined
as
chairman
of
the
appellant
Board,
but
subject
to
his
being
examinable
in
that
capacity
as
an
"‘officer
of
a
corporation”
within
the
meaning
of
Marginal
Rule
370C(1)
of
our
Supreme
Court
Rules.
The
learned
trial
Judge
held
him
examinable
under
that
rule
applying
the
decision
of
Martin
J.
(later
Chief
Justice
of
British
Columbia)
in
Centre
Star
Mining
Co.
v.
Rossland
Miners
Union
(1902),
9
B.C.R.
190.
I
agree
with
the
learned
trial
Judge
that
Williams’
discovery
evidence
was
properly
admitted
at
the
trial
as
evidence
of
the
chairman
of
the
appellant
Board.
By
Marginal
Rule
1041
of
our
Supreme
Court
Rules
the
term
"‘Corporation''
as
used
in
the
Supreme
Court
Rules
"‘shall
have
the
meaning
assigned
to
it
under
the
"‘Interpretation
Act,’
and
shall
include
any
association,
union,
or
body
whatever.”
By
s.
24(6)
of
the
Interpretation
Act,
R.S.B.C.
1936,
c.
1,
"
corporation
’
means
‘
"
any
incorporated
company,
association,
society,
municipality
or
body
politic
and
corporate,
howsoever
and
wheresoever
incorporated.
’’
The
appellant
Board
is
not
"‘incorporated;''
it
cannot
therefore
be
a
“corporation”
in
the
sense
that
term
is
defined
in
the
Interpretation
Act.
But
the
additional
words
in
Marginal
Rule
1041
‘‘and
shall
include
any
association,
union
or
body
whatever”
widen
the
term
‘‘corporation’’
as
used
in
the
Supreme
Court
Rules
to
include
legal
entities
which
may
not
be
“incorporated.”
Otherwise
these
additional
words
in
Marginal
Rule
1041
would
be
meaningless.
For
if
it
were
intended
that
the
‘‘association,
union
or
body
whatever’’
should
be
“incorporated”
this
was
already
covered
by
the
definition
of
“corporation”
in
the
Interpretation
Act,
and
no
additional
or
qualifying
language
would
be
required.
In
the
circumstances
the
words
‘‘and
shall
include
any
association,
union
or
body
whatever’’
in
Marginal
Rule
1041
should
be
regarded
as
words
of
amplification
to
include
an
unincorporated
legal
entity
such
as
the
appellant
Board.
Accordingly
for
the
purposes
of
discovery
examination
at
least
the
appellant
Board
should
be
regarded
as
a
‘‘corporation’’
within
the
meaning
of
Marginal
Rule
3700(1).
In
Turner's
Dairy
Ltd.
v.
Williams,
[1940]
3
D.L.R.
214,
55
B.C.R.
81
an
interlocutory
appeal
in
these
same
proceedings
concerning
refusal
to
answer
questions
on
discovery
examination,
this
Court
held,
applying
the
Taff
Vale
Ry.
case,
[1901]
A.C.
426,
that
the
appellant
Board
was
a
legal
entity
suable
as
such.
And
vide
also
Hollywood
Theatres
Ltd.
v.
Tenney,
[1940]
1
D.L.R.
452
at
pp.
473-5,
73
Can.
C.C.
158
at
pp.
183-5,
54
B.C.R.
247.
Then
as
to
the
discovery
evidence
of
the
defendant
Barrow.
I
think
it
was
proper
evidence
for
the
learned
trial
Judge
to
consider
in
relation
to
past
and
present
conditions
in
the
milk
industry
in
so
far
as
it.
assisted
him
to
understand
the
working
out
in
practice
of
the
plan
outlined
here.
It
related
to
a
common
issue
between
all
the
plaintiffs
and
all
the
defendants.
V.
WHAT
IS
DONE
CONSTITUTES
A
TAX.
Thus
far
it
has
been
established
that
the
impugned
orders
are
a
colourable
device
to
effect
equalization
of
returns;
that
is
to
say
in
the
language
of
Lord
Thankerton
in
the
Crystal
Dairy
decision,
[1933]
1
D.L.R.
82
at
p.
84,
they
were
designed:
"‘to
transfer
compulsorily
a
portion
of
the
returns
obtained
by
the
traders
in
the
fluid
milk
market
to
the
traders
in
the
manufactured
products
market;
that
other
.
.
.
provisions
afford
the
machinery
by
which
this
is
enabled
to
be
done.
‘
‘
Does
what
takes
place
under
this
colourable
device
constitute
taxation?
The
principle
of
the
decision
of
the
Judicial
Committee
in
the
Crystal
Dairy
case
require
an
affirmative
answer.
It
is
true
in
that
case
there
was
an
adjustment
levy
upon
A
to
provide
the
money
to
equalize
payments
to
B
and
C.
There
is
no
such
so-called
adjustment
levy
here.
But
once
it
is
found
(as
it
has
been)
that
equalization
takes
place,
it
is
manifest
that
which
is
done
here
is
just
as
much
a
compulsory
taking
from
A
to
pay
B
and
C,
as
if
it
were
in
fact
done
by
a
levy
expressed
to
be
for
that
purpose.
That
it
is
not
called
a
levy
or
that
it
is
not
shown
in
that
form
is
not
material.
For
the
compulsory
transfer
and
other
provisions
(in
Lord
Thankerton’s
language)
“"afford
the
machinery
by
which
this
is
enabled
to
be
done.’’
Again
it
is
the
substance
and
not
the
form
which
governs.
The
impugned
orders,
in
my
view,
fall
within
the
elements
of
taxation
stated
by
Duff
J.
(as
he
then
was)
in
Lawson
f
s
ease,
[1931],
2
D.L.R.
193
at
pp.
197-8,
S.C.R.
357
and
by
Lord
Thankerton
in
the
Crystal
Dairy
decision.
The
appellant
Board
which
passed
the
orders
and
thereby
directs
and
controls
the
Clearing
House
is
undeniably
a
public
and
not
a
private
body.
It
is
equally
clear
its
orders
were
passed
for
a
public
purpose
and
unless
held
invalid
are
enforceable
by
law.
VI.
INDIRECT
TAX.
The
impugned
orders
impose
a
tax
and
the
enquiry
pressed
further
shows
that
the
tax
is
indirect.
Whether
the
plan
im-
poses
an
indirect
tax
depends
upon
the
tendency
of
the
tax
to
‘‘enter
into
and
affect
the
price
of
the
product’’
per
Duff
J.
(as
he
then
was)
in
Lawson’s
case
at
p.
197.
That
tendency
is
not
ascertained
by
the
‘‘results
in
isolated
or
merely
particular
instances’’
per
Viscount
Haldane
in
A.-G.
B.C.
v.
C.P.R.,
[1927]
4
D.L.R.
113
at
p.
115,
A.C.
934.
It
is
"referable
to,
and
ascertainable
by,
the
general
tendencies
of
the
tax
and
the
common
understanding
of
men
as
to
those
tendencies’’
per
Lord
Hobhouse
in
Bk.
of
Toronto
v.
Lambe
(1887),
56
L.J.P.C.
87
at
p.
89.
The
price
payable
to
the
farmer
was
increased
by
the
impugned
orders.
The
price
to
the
consumer
in
Vancouver
was
not
fixed
by
the
Board
although
stated
to
be
one
of
the
lowest
if
not
the
lowest
of
any
major
city
in
Canada.
When
the
appellant
Board
fixed
the
price
the
dealer
had
to
pay
the
Clearing
House
at
600.
per
pound
butterfat,
the
price
the
dealer
was
then
called
on
to
pay
was
increased
in
two
ways.
First
when
the
Board
fixed
the
price
payable
by
the
Clearing
House
to
the
farmer
at
560.
per
pound
butterfat,
it
thereby
increased
the
price
to
the
farmer
by
some
6
to
110.
per
pound
more
than
the
farmer
had
been
receiving
from
the
dealer.
It
is
in
evidence
that
before
the
orders
were
passed
the
dealers
had
been
paying
the
farmer
from
45
to
500.
per
pound
butterfat
for
fluid
market
milk.
Secondly
when
the
appellant
Board
fixed
the
price
payable
by
the
dealers
to
the
Clearing
House
at
600,
per
pound
butterfat
(which
allowed
a
four
cent
""spread”
to
the
Clearing
House)
it
thereby
added
another
40,
to
the
price
payable
by
the
dealer.
Under
the
equalization
plan
in
the
Board’s-orders
the
dealers:
had
to
pay
some
10
to
150.
per
pound
butterfat
more
than
they
did
before.
It
is
surely
consistent
with
the
‘‘general
tendency
and
the
common
understanding
of
men,’’
that
when
dealers
are:
compelled
to
pay
such
a
substantial
increase
in
the
price
of
milk,
that
they
will
pass
that
increase
or
at
least
a
goodly
portion
of'
it
on
to
the
ultimate
consumer.
The
existence
of
that
general
tendency
is
the
more
certain
since
it
is
in
evidence
that
the
Vancouver
consumer
has
been
paying
a
comparatively
low
price
and
that
strong
representations
have
been
made
that
it
is
too
low.
It
is
in
point
to
observe
also
that
although
the
equalization
plan
of
the
appellant
Board
has
brought
about
the
price
increases
which
give
rise
to
that
tendency,
yet
the
Board
has
refrained
from
fixing
the
price
to
the
consumer
or
taking
any
step
to
prevent
the
natural
operation
of
that
general
tendency.
It
may
be
accepted
therefore
as
a
general
tendency
that
the
increased
price
to
the
farmer
not
to
mention
the
additional
four
cent
‘‘spread’’
to
the
Clearing
House,
will
be
passed
on
wholly
or
in
large
part
to
the
ultimate
consumer,
now
benefiting
from
low
comparative
prices;
and
vide
Macdonald
C.J.B.C.
in
the
Crystal
Dairy
case,
[1932]
2
D.L.R.
277
at
pp.
279-80,
45
B.C.R.
191
and
in
the
same
case
Macdonald
J.A.
(as
he
then
was)
at
pp.
298-9.
In
the
circumstances
therefore
the
effect
of
the
impugned
orders
is
to
impose
an
indirect
tax.
Such
a
result
is
not
authorized
by
the
Milk
Scheme,
under
which
the
appellant
Board
operates.
Even
if
it
should
be
held
to
be
within
the
Milk
Scheme,
then
the
Scheme
itself
is
illegal
to
that
extent
for
obviously
it
cannot
exercise
powers
which
cannot
be
given
it
by
the
parent
statute.
VII.
RE
APPELLANTS
WILLIAMS
AND
BARROW.
To
succeed
against
the
appellants
Williams
and
Barrow,
the
respondents
must
show
they
did
not
act
"‘in
good
faith
in
the
performance
or
intended
performance’’
of
their
duties
as
members
of
the
appellant
Board;
vide
s.
13
of
the
Natural
Products
Marketing
(B.C.)
Act,
supra.
The
evidence
discloses
that
under
the
guise
of
regulations
for
the
marketing
of
milk
they
incorporated
into
the
orders
of
the
Board
a
colourable
plan
for
equalization
of
returns
which
in
its
effect
imposed
an
indirect
tax.
They
sought
to
do
something
which
has
been
found
to
be
illegal.
Therefore
they
have
acted
mala
fide,
vide
Westminster
Corp.
v.
London
&
North-Western
Ry.
(1905),
74
L.J.
Ch.
629
Lord
Macnaghten
at
p.
632.
Lord
Lindley
said
at
p.
636
:
"‘Where
a
person
is
authorised
by
statute
or
by
the
common
law
to
do
what
apart
from
such
authority
would
be
unlawful—
for
example,
to
commit
a
trespass—and
the
authority
is
conferred
for
some
distinct
and
definite
purpose,
and
is
abused
by
being
used
for
some
other
and
different
purpose,
the
person
abusing
it
is
treated
as
a
wrongdoer
from
the
first,
and
not
only
as
a
wrongdoer
in
respect
of
what
can
be
proved
to
have
been
an
excess
of
his
authority.
It
is
presumed
against
him
that
the
abuse
of
his
authority
shews
an
intention
from
the
first
to
commit
an
unlawful
act
under
colour
of
a
lawful
authority.’’
It
was
contended
Williams
and
Barrow
were
not
proper
parties
to
the
action
;
it
was
said
there
were
no
allegations
against
them.
Reliance
was
placed
on
observations
made
in
the
course
of
the
judgments
in
the
practice
appeal,
vide
[1940]
3
D.L.R.
214.
But
their
description
in
the
style
of
cause
has
been
changed
since
then.
The
statement
of
claim
has
been
amended
since
by
charging
these
appellants
in
para.
28
thereof,
with
conspiring
together
to
have
the
appellant
Board
pass
the
impugned
orders
to
obtain
equalization
of
returns
illegally
or
improperly,
and
to
disguise
the
true
purpose
of
the
orders.
During
the
course
of
the
trial
the
learned
trial
Judge
ruled
that
these
allegations
against
them
were
sufficient
to
constitute
them
proper
parties
to
the
action.
I
see
no
ground
to
hold
otherwise.
Under
cover
of
a
broad
scheme
to
regulate
the
milk
industry
the
appellant
Board
embarked
upon
a
plan
which
in
its
reality
results
in
an
indirect
tax.
The
impugned
orders
sought
to
conceal
their
true
scope
and
effect
and
were
a
colourable
use
of
the
Board’s
powers.
The
Board
attempted
to
do
an
illegal,
act
under
colour
of
a
lawful
authority.
I
would
therefore
dismiss
the
appeals
of
all
the
appellants.
Appeal
dismissed.