HOPE
J.:—In
this
action
the
plaintiff
sues
on
behalf
of
the
Crown
in
the
right
of
the
Dominion,
to
recover
from
the
defendants
the
sum
of
$51,487.43
alleged
to
have
been
collected
for
and
on
behalf
of
the
Crown
from
June
1st,
1934
to
May
30th,
1940,
under
the
provisions
of
The
Special
War
Revenue
Act,
R.S.C.
1927,
cap.
179
and
amendments
thereto,
and
regulations
passed
thereunder
as
a
stamp
duty
imposed
on
the
transfer
or
sale
of
unlisted
securities
effected
by
the
defendants,
either
as
vendors
or
as
brokers
for
other
vendors.
The
defendants
are
a
partnership
of
stockbrokers
with
head
office
in
the
City
of
Toronto,
and
having
a
seat
upon
the
Toronto
Stock
Exchange.
The
provisions
of
The
Special
War
Revenue
Act
as
amended
and
pertinent
to
the
matters
in
issue
herein,
are
found
in
sections
58(2),
60,
62,
99,
100,
101,
102
and
108(1).
Under
and
by
virtue
of
the
statutory
authority
contained
in
section
60
aforesaid,
regulations
have
from
time
to
time
been
established
by
the
Governor-in-Council.
Those
regulations
which
are
applicable
are
as
follows:
Firstly:
those
passed
with
effect
from
the
26th
of
May,
1932,
and
reading
as
follows:
"2.
Sales
of
Securities
by
Stockbrokers—Not
Executed
on
Stock
Exchanges.
That
where
any
stockbroker,
acting
either
as
principal
or
agent,
effects
the
sale
of
a
taxable
security
by
means
of
a
transaction
which
is
not
executed
on
a
stock
exchange
in
Canada,
the
tax
exigible
on
the
transaction
is
to
be
paid
to
the
Crown
by
the
vendor
stockbroker
affixing
excise
tax
stamps
of
the
requisite
value
to
the
duplicate
of
the
memorandum
of
sale
retained
on
file
in
his
office.
‘
‘
(12.
Sales
Records
Required
to
be
kept
by
Stockbrokers,
Banks,
Trust
Companies
and
Bond
Dealers.
That
where
any
stockbroker,
bank,
trust
company,
or
bond
dealer,
acting
either
as
principal,
or
agent,
effects
the
sale
of
a
taxable
security,
such
stockbroker,
bank,
trust
company,
or
bond
dealer
be
required
in
all
instances
where
the
transaction
is
not
executed
on
a
stock
exchange
in
Canada
:—
(a)
to
prepare
a
memorandum
in
duplicate
of
the
sale;
(b)
to
deliver
the
original
of
such
memorandum
of
sale
to
the
purchaser
;
(c)
to
retain
the
duplicate
of
such
memorandum
of
sale
on
file
in
their
office
until
such
time
as
official
permission
is
given
for
its
destruction.”
15.
Affixing
and
Cancellation
of
Excise
Tax
Stamps
by
Stockbrokers,
Banks,
Trust
Companies
and
Bond
Dealers.
That
all
stockbrokers,
banks,
trust
companies,
and
bond
dealers
upon
whom
is
imposed
the
duty
of
affixing
excise
tax
stamps
in
accordance
with
the
provisions
of
The
Special
War
Revenue
Act
and
the
regulations
thereunder
established
shall
be
and
are
hereby
required
:
(a)
to
affix
the
said
stamps
securely
to
the
proper
documents,
memoranda,
books,
ete.:
(b)
to
cancel
the
said
stamps
by
means
of
a
perforator
which
shall
perforate
six
holes
of
at
least
one-eighth
of
an
inch
in
diameter
through
each
stamp
and
the
document
to
which
same
is
affixed,
or,
in
the
alternative
the
perforator
may
form
the
word
“cancelled’
or
the
initials
of
the
company,
regardless
of
the
dimensions
of
the
perforations:
(c)
to
provide
an
instrument
for
making
such
perforations.”
These
regulations
were
subsequently
rescinded
with
effect
from
1st
June,
1937,
by
the
order
of
the
Governor-in-Couneil
and
the
following
regulations
substituted
therefor
:—
"
"
2.
Sales
by
Stock
Brokers.
Every
stock
broker
who
effects
the
sale
of
any
bond
or
share
shall
compute
the
tax
payable
and
account
therefor
as
follows:
(a)
if
the
sale
is
effected
upon
a
stock
exchange
pay
the
tax
to
the
exchange
and
the
exchange
shall
pay
the
Receiver
General,
as
hereinafter
provided,
or
(b)
if
the
sale
is
effected
otherwise
than
on
a
stock
exchange,
pay
the
tax
forthwith
by
affixing
excise
stamps
of
the
requisite
value
to
a
memorandum
of
the
sale
to
be
kept
in
his
office.
’
’
"9.
Sales
Records
to
be
Kept
by
Banks,
Bond
Dealers,
Stock
Brokers
and
Trust
Companies
Every
bank,
bond
dealer,
stock
broker
or
trust
company
which
sells
a
bond
or
share,
either
as
principal
or
agent,
shall
:—
(a)
prepare
a
memorandum
in
duplicate
of
the
sale;
(b)
deliver
one
copy
of
such
memorandum
to
the
purchaser
;
(c)
retain
one
copy
on
file
until
such
time
as
official
permission
is
given
for
its
destruction.
’
‘
(12.
Affixing
and
Cancellation
of
Stamps
by
Banks,
Bond
Dealers,
Stock
Brokers
and
Trust
Companies
Banks,
bond
dealers,
stock
dealers,
stock
brokers
and
trust
companies
charged
with
the
duty
of
affixing
excise
tax
stamps
in
accordance
with
these
regulations
shall,
(a)
affix
the
said
stamps
securely
to
the
proper
documents,
memoranda,
books,
etc.
;
(b)
cancel
the
said
stamps
by
means
of
a
perforator
which
shall
perforate
six
holes
of
at
least
one-eighth
of
an
inch
in
diameter
through
each
stamp
and
the
document
to
which
the
same
is
affixed,
or
in
the
alternative,
the
perforator
may
form
the
word
‘cancelled’
or
the
initials
of
the
company’s
name,
regardless
of
the
dimensions
of
the
perforations;
(ce)
provide
an
instrument
for
making
such
perforations.”
The
general
scheme
of
this
legislation
is
to
impose,
levy
and
collect
an
excise
tax
upon
every
change
of
ownership
consequent
upon
the
sale,
transfer
or
assignment
of
any
bond
or
of
any
share.
The
tax
is
payable
by
the
vendor,
transferor
or
assignor
of
the
bond
or
share.
The
computation
of
the
amount
of
such
tax
in
accordance
with
the
table
of
taxation
is
to
be
made
by
the
stock
broker.
The
tax
is
to
be
collected
for
and
on
behalf
of
the
Crown
by
the
stock
broker.
The
tax
is
to
be
payable
in
excise
stamps,
which
are
purchasable
from
stamp
vendors
duly
authorized
to
sell
excise
stamps
on
behalf
of
the
Crown.
The
stamps
when
so
purchased
by
the
vendor,
transferor
or
assignor
of
the
security
are
to
be
delivered
to
the
stock
broker
who
had
computed
the
amount
of
tax
exigible
and
who
by
statute
is
charged
with
the
collection
of
the
tax
for
and
on
behalf
of
the
Crown.
The
regulations
then
require
that
the
stamps
be
affixed
by
the
broker
to
a
duplicate
memorandum
of
the
sale
which
is
required
to
be
prepared
and
kept
by
the
broker,
after
he
has
delivered
one
copy
of
such
memorandum
to
the
purchaser.
The
copy
with
the
stamp
or
stamps
affixed,
is
to
be
retained
by
the
broker
until
such
time
as
official
permission
is
given
by
the
proper
Crown
officer
for
its
destruction.
Such
records
are
to
be
open
for
inspection
by
the
Crown
officers
for
audit.
Thus
it
will
be
seen
that
a
complete
system
is
set
up
for
payment,
computation,
collection,
and
accounting
to
the
Crown
of
the
tax
collected
by
preparation
of
records,
affixing
and
cancellation
of
excise
stamps
and
retention
of
such
records
for
subsequent
audit
by
the
Crown
auditors.
It
is
admitted
in
the
proceedings
that
the
defendants
are
stock
brokers
within
the
requirements
of
the
Act
and
that
the
defendants
did,
over
the
period
in
question,
transact
many
sales
of
securities
either
directly
as
vendors
or
as
the
agents
for
vefdor
customers
of
the
defendants.
For
the
purposes
of
this
action,
it
makes
little
or
no
difference
by
whom
the
tax
was
payable—as
the
action
is
based
on
the
duty
of
the
defendants
to
collect
for
and
account
to
the
Crown.
It
is
also
clear
on
the
evidence,
that
transactions
on
which
there
was
excise
tax
for
the
net
amount
claimed
in
the
pleadings,
after
crediting
an
acknowledged
payment
of
$1986.91,
have
been
effected
through
the
defendants’
brokerage
office.
In
some
of
these
transactions
the
defendants
were
the
actual
vendors,
but
in
the
majority
of
instances
they
were
acting
on
behalf
of
customers.
The
defendants
maintained
duplicate
memoranda
of
sales.
It
is
claimed
by
the
defendants,
and
I
so
accept
on
the
evidence,
that
the
defendants
duly
purchased
stamps
in
the
aggregate
value
of
the
amount
now
claimed
but
it
is
clearly
apparent
on
the
evidence
that
the
defendants
did
not
comply
with
the
regulations
which
required
that
the
stamps
be
affixed
to
each
particular
duplicate
memorandum
of
the
individual
sale
and
cancelled
in
manner
prescribed
and
in
the
time
provided
by
the
regulations.
In
fact,
I
can
find
no
suggestion
that
stamps
were
affixed
by
the
defendants
to
any
document
which
approaches
in
description
a
duplicate
of
the
memorandum
of
the
sale
as
furnished
to
the
purchaser,
or
even
a
cumulative
duplicate
of
the
memoranda
of
successive
sales
to
various
purchasers.
Instead
of
so
doing,
it
is
given
in
evidence
tendered
on
behalf
of
the
defendants
that
the
stamps
in
question
were,
from
time
to
time
and
at
varying
intervals,
oftentimes
of
considerable
duration,
purchased
by
the
defendants
with
funds
charged
to
the
vendor
of
the
security,
that
such
stamps
were
then
affixed
to
an
ordinary
sheet
of
letter
paper
bearing
the
letter
head
of
the
defendant
partnership,
with
a
notation
that
the
stamps
so
affixed
to
the
said
sheet
were
for
sales
of
unlisted
securities
during
the
certain
period
thereon
named,
and
further
that
such
stamps
were
then
cancelled
by
a
clerk
drawing
a
pen
through
the
same
or
initialling
the
same.
From
the
evidence
it
appears
that
no
data
identifying
the
stamps
so
alleged
to
have
been
affixed
to
sheets
of
the
defendants’
letter
paper
with
any
particular
sale
or
transfer
of
a
security
was
recorded
on
such
sheets,
other
than
the
date
of
a
day
on
or
period
within
which
the
sale
or
sales
were
alleged
to
have
been
made.
Various
employees
of
the
defendants
testified
that
a
folder
or
file
containing
such
sheets
with
stamps
affixed
had
been
maintained
and
that
it
had
been
seen
by
them
from
time
to
time
in
the
office
of
the
defendants
until
approximately
a
week
before
the
visit
of
the
auditors
for
the
Crown,
in
the
early
part
of
July,
1940.
This
file
could
not
then
be
produced
or
accounted
for
and
later,
by
a
letter,
exhibit
13,
dated
the
29th
of
July,
1940,
the
defendants
advised
the
Commissioner
of
Excise,
as
follows:
‘Within
the
past
several
weeks
the
file,
in
which
we
carry
Dominion
stock
transfer
tax
stamps
purchased,
has
mysteriously
disappeared.
We
have
made
a
complete
search
of
our
premises
and
cannot
locate
the
file.
"‘We
feel
now,
justifiably,
that
they
have
been
either
maliciously
removed,
or
taken
with
intent
to
resell.”
At
this
point,
it
might
be
noted
that
the
defendants
in
this
letter
referred
not
to
stamps
collected,
affixed
and
cancelled
as
one
might
expect
in
view
of
their
duty
under
the
statute
and
regulations,
but
to
stamps
"‘purchased.''
This
fact
in
conjunction
with
the
defendants’
expressed
fear
that
the
stamps
"‘Have
been
taken
with
intent
to
resell’’
may
be
significant
in
evaluating
the
evidence
of
employees
of
the
defendants
as
to
the
cancellation
of
all
stamps.
The
loss
of
this
file
was
not,
apparently,
observed
or
brought
to
the
attention
of
any
partner
in
the
defendant
firm
or
any
senior
official
thereof,
until
the
Crown
auditors
first
attended
at
the
premises
of
the
defendants
in
early
July,
1940,
to
effect
a
customary
audit.
By
registered
letter,
(ex.
5)
dated
September
9th,
1941,
the
Commissioner
of
Excise
by
virtue
of
the
powers
delegated
to
him
by
the
Minister
of
National
Revenue
under
sec.
99
of
the
Act
(vide
ex.
7)
demanded
that
the
defendants
carry
out
the
statutory
duty
imposed
upon
them
by
accounting
for
the
tax
collected
by
them
for
and
on
behalf
of
His
Majesty
in
the
total
now
sought
to
be
recovered.
The
defendants
called
witnesses
and
produced
records
of
other
brokerage
firms
in
the
City
of
Toronto,
for
the
purpose,
no
doubt,
of
indicating
that
the
Crown
auditors
had
accepted
cancellation
of
excise
stamps
in
a
manner
other
than
that
prescribed
by
the
regulations.
Nevertheless
it
was
inescapably
noticeable
that
in
such
records
of
other
brokerage
firms,
the
stamps
had
invariably
been
attached
to
the
actual
duplicate
memorandum
of
the
sale.
True
it
is
that
such
duplicate
memorandum
in
some
instances
had
been
kept
in
cumulative
form
on
large
binder
sheets,
and
that
the
stamps
had
been
affixed,
not
for
each
individual
transaction,
but
at
the
conclusion
of
all
transactions
for
a
day
or
a
week
as
the
case
might
be,
on
any
particular
binder
sheet.
I
have
no
difficulty
whatsoever
in
finding
that
the
defendants
have
utterly
failed
to
comply
with
the
regulations
prescribing
the
mode
of
affixing
excise
stamps
and
retaining
them
until
given
permission
for
their
destruction
so
that
a
proper
accounting
could
be
given
to
the
Crown
of
the
stamps
thus
collected
by
the
defendants.
The
plaintiff
therefore
asks
under
the
provision
of
section
108
of
the
Act,
for
a
judgment
for
the
amount
of
such
tax
so
collected
by
the
defendant
as
a
debt
due
to
the
Crown.
In
the
alternaive,
the
plaintiff
has
also
asked
for
an
order
directing
the
defendants
to
affix
excise
stamps
to
the
memoranda
of
sales
in
accordance
with
the
statute
and
regulations,
and
to
cancel
them
in
compliance
with
the
regulations.
The
plaintiff
also
asks
for
a
declaration
that
the
plaintiff
is
entitled
to
an
order
in
the
nature
of
a
prerogative
writ
of
mandamus
directing
the
defendants
to
fulfil
the
duty
imposed
upon
them
as
aforesaid,
and
further
for
damages
in
the
amount
claimed
for
breach
of
the
duty
imposed
by
statute
and
regulations
for
failure
to
perform
or
negligence
in
performing
the
duty
imposed
upon
the
defendants.
By
way
of
defence,
the
defendants
set
up
that
the
regulations
hereinbefore
referred
to
as
having
been
enacted
under
and
by
virtue
of
section
60
of
the
statute
are
ultra
vires
the
terms
of
the
said
statute.
May
I
therefore
examine
the
effect
of
section
60.
Let
it
first
be
noted
that
by
the
terms
of
section
58(2)
an
excise
tax
is
imposed,
levied
and
collected
upon
every
change
of
ownership
of
certain
securities,
at
a
rate
of
taxation
therein
described.
This
tax
is
definitely
and
clearly
payable
by
the
vendor,
transferor
or
assignor
of
such
security
as
provided
in
section
60,
and
is
payable
in
a
fixed
type
of
currency,
namely,
in
excise
tax
stamps.
As
I
understand
the
principles
established
by
earlier
decisions,
the
validity
of
an
order-in-council
is
dependent
on
whether
or
not
its
provisions
be
repugnant
to
or
beyond
the
reasonable
contemplation
and
purview
of
the
terms
of
the
statute
from
which
it
emanates
(vide
In
re
Price
Bros.
&
Co.
V.
Board
of
Commerce
of
Canada
(1920),
60
S.C.R.
265).
Nor
am
I
unmindful
of
the
principle
that
in
a
case
of
any
ambiguity
in
taking
legislation,
the
Courts
resolve
the
same
in
favour
of
the
subject.
But
the
action
at
bar
does
not
raise
any
question
which
could
possibly
impose
a
hardship
upon
or
be
detrimental
to
the
subject
from
whom
the
tax
is
levied,
viz.,
upon
the
vendor
of
the
security.
Giving
to
the
language
of
this
first
clause
of
section
60
its
normal
meaning,
it
can
only
imply
that
the
vendor
of
the
security
is
presumed
to
physically
deliver
to
the
person
by
whom
the
tax
is
collected
for
and
on
behalf
of
the
Crown,
excise
stamps
of
the
correct
amount.
There
is
no
duty
imposed
by
statute
or
regulation
upon
the
stock
broker
to
"purchase’’
the
stamps
with
reference
to
transactions
.passing
through
his
hands
as
broker.
No
doubt
as
a
service
to
its
customers
the
broker
has
assumed
the
task
of
purchasing
the
stamps
as
a
matter
of
convenience
for
the
broker’s
customers.
In
so
purchasing
the
stamps
from
the
authorized
stamp
vendor,
the
defendants
were
not
performing
any
statutory
duty
placed
upon
them.
They
were
acting
solely
as
the
agent
for
their
customers.
Therefore
the
evidence
of
purchase
of
excise
stamps
by
the
defendants
is
not
necessarily
probative
of
a
fulfilment
of
the
defendants’
duty
to
collect.
The
second
clause
of
section
60,
gives
to
the
Governor-in-
Council
the
power
to
make
regulations,
prescribing
the
manner
in
which
and
the
persons
by
whom
the
amount
of
tax
when
computed
shall
be
collected
for
and
on
behalf
of
His
Majesty.
Can
it
be
said
that
the
regulations
hereinbefore
recited
in
part,
enacted
by
the
Governor-in-Council
by
virtue
of
this
statutory
authority,
exceeded
in
any
manner
or
degree
the
scope
of
the
statutory
authority?
It
must
not
be
overlooked
that
the
authority
given
is
to
name
the
person
by
whom
the
tax
shall
be
collected,
and
that
the
collection
is
for
and
on
behalf
of
the
Crown.
I
fail
to
appreciate
how
it
can
be
argued
successfully
that
the
regulations
exceed
such
statutory
terms
in
their
provisions.
The
regulations
impose
the
duty
of
collection
upon
the
broker
and
clearly
indicate
that
the
stamps
which
are
payable
by
the
vendor
of
the
security
are
to
be
received
by
the
broker
at
the
time
of
the
sale,
and
affixed
by
him
to
the
duplicate
memorandum
of
the
sale,
are
to
be
cancelled
by
the
broker
and
retained
by
the
broker
in
the
manner
and
form
aforesaid
until
inspected
by
the
Crown
auditors
and
until
such
times
as
official
authority
is
given
for
their
destruction.
These
regulations
are,
in
my
opinion,
clearly
as
to
"‘the
manner
in
which
the
tax
shall
be
collected,’’
i.e.
the
mode
of
dealing
with
the
collection.
Hence
the
regulations
are
within
the
scope
of
the
language
of
section
60.
There
is
no
suggestion
that
any
official
authority
for
destruction
of
the
cancelled
stamps
on
the
memoranda
of
sales
was
given
in
this
instance.
While
defendants’
counsel
has
argued
that
the
word
“collect”
implies
only
a
demand
and
obtaining
of
payment,
yet
it
must
not
be
overlooked
that
the
statutory
authority
describes
the
collection
as
being
for
and
on
behalf
of
the
Crown.
Thus
there
is
implied
the
trusteeship
of
the
broker
for
the
Crown,
and
there
would
be,
at
Common
Law,
the
resulting
implication
that
the
broker
must
account
for
the
moneys
had
and
received
on
behalf
of
the
Crown.
His
method
of
accounting
therefor
is
in
full
contemplation
in
the
terms
of
the
regulations
hereinbefore
referred
to.
Thus
I
must
conclude
that
since
by
statute,
sec.
60,
the
duty
is
payable
by
the
vendor
of
the
"
"
security
’
’
in
excise
stamps,
it
must
be
assumed
that
the
stamps
were
purchased
by
the
defendants
as
voluntary
agents
of
the
vendors
and
thus
that
the
stamps
originally
came
into
possession
of
the
defendants
as
agents
of
the
vendors
of
the
securities.
This
being
so
can
it
be
reasonably
argued
that
the
defendants
have
even
collected
the
stamps
for
and
on
behalf
of
the
Crown
until
the
defendants
have
dealt
with
them
in
the
manner
prescribed
by
the
regulations
in
question
?
Moreover
it
should
not
be
overlooked
that
even
though
it
might
successfully
be
contended
that
the
power
conferred
by
section
60
on
the
Governor-in-Council
is
only
to
make
regulations
to
compute
and
collect
the
tax,
yet
there
is
a
statutory
duty
imposed
by
the
statute
itself
(section
62)
which
imposes
a
liability
on
the
defendants
as
persons
liable
to
collect
the
tax
to
keep
records
and
books
of
account
adequate
for
the
purposes
of
Part
VII
of
the
Act.
Hence,
aside
from
the
regulations
established
by
the
Governor-in-Council,
there
is
to
be
found
within
the
terms
of
the
statute
itself
(section
62)
the
undoubted
implication
of
a
duty
to
account
by
the
collector.
I
must
find
that
the
defendants
have
failed
in
their
statutory
duty
to
collect
for
and
on
behalf
of
the
Crown
and
account
therefor,
and
therefore
that
the
plaintiff
is
entitled
to
recover
under
the
terms
of
section
108
of
the
Act,
the
sums
payable
under
the
Act
as
and
from
the
time
the
same
ouyht
to
have
been
accounted
for
by
the
defendants.
In
resisting
liability
counsel
for
the
defendants
cited
the
case
of
The
King
v.
Crabbs,
[1934]
S.C.R.
523,
but
I
fail
to
see
how
this
decision
has
any
bearing
upon
the
facts
of
this
case.
In
the
Crabbs
case,
it
was
sought
to
fix
liability
on
the
broker
who
had
effected
a
sale
of
a
security
as
agent,
and
had
failed
to
affix
the
revenue
stamp
to
the
security
in
question.
It
was
there
sought
to
attach
to
the
broker
an
obligation
for
payment
of
the
tax.
In
the
action
at
law,
there
is
no
suggestion
that
the
tax
should
be
paid
in
the
first
instance
by
the
broker.
The
present
defendants
are
only
called
upon
to
account
for
revenue
collected
for
and
on
behalf
of
the
Crown,
and
failure
to
account
for
collection
in
the
manner
prescribed,
in
my
opinion,
renders
the
defendants
liable
for
the
amount
in
question.
If,
on
a
proper
construction
of
the
statute,
the
defendant
in
a
proceeding
by
the
Crown
is
liable
as
I
consider
these
defendants
are,
the
Court
has
nothing
to
do
with
the
hardship
of
the
case.
Rex
v.
Robitaille
(1909),
12
Exch.
C.R.
264.
The
defendants
further
set
up
by
way
of
defence
to
the
claim
for
an
accounting
in
the
terms
of
the
regulations,
that
the
action
of
the
Crown
officials
has
estopped
the
Crown
from
insisting
upon
a
strict
compliance
with
the
regulations.
Although
it
was
rather
nebulous
as
to
time
and
place
and
identity
of
persons,
it
was
given
in
evidence
on
behalf
of
the
defendants
that
some
years
prior
to
1940
auditors
on
behalf
of
the
plaintiff
had
called
at
the
defendants’
office
in
Toronto,
and
had
been
acquainted
with
the
method
of
affixing,
cancelling
and
retaining
tax
stamps
only
in
a
file
of
letter
stationery
as
hereinbefore
described
and
that
the
auditors
had
taken
no
objection
to
such
irregular
procedure.
The
defendants
therefore
now
plead
the
waiver
by
the
plaintiff,
through
its
agent,
of
the
necessity
of
strict
compliance
with
the
regulations.
Records
from
other
brokerage
houses
were
submitted
in
evidence
in
support
of
the
contention
that
the
Crown
agents
had
as
a
matter
of
custom
waived
strict
compliance
with
the
regulations
as
to
the
method
of
cancelling
tax
stamps.
However
such
records
of
other
brokers
indicated
an
effort
on
behalf
of
such
other
brokers
to
follow
the
regulations
with
respect
to
affixing
tax
stamps
to
the
required
recards,
even
if
there
had
been
an
acceptance
of
methods
of
cancellation
of
stamps
which
effect,
however,
was
not
strictly
in
compliance
with
regulations.
Counsel
for
the
defendants
relied
upon
The
King
v.
C.P.R.,
[1930]
Exch.
C.R.
26
in
support
of
this
contention
as
to
estoppel.
The
only
effect
of
this
decision
is
that
while
affirming
the
well-
established
doctrine
that
estoppel
does
not
apply
against
the
Crown,
it
was
held
that
in
a
proper
case
the
Crown
may
be
held
liable
for
acts
or
conduct
of
its
responsible
officers,
which
if
occurring
between
subject
and
subject
would
amount
to
an
estoppel
in
pais.
But
the
conduct
under
review
in
that
case
involved
the
physical
erection
and
maintenance
of
telegraph
poles
by
the
railway
company
on
certain
lands
over
a
period
of
some
forty
years.
I
cannot
hold
that
the
facts
there
present
and
in
the
present
case
can
be
even
suggested
to
be
comparable.
The
facts
on
which
the
defendant
relies
herein
to
support
an
estoppel
are
very
similar
to
those
in
Rex
V.
Disappearing
Propeller
Boat
Co.
Ltd.,
55
O.L.R.
545
where
Logie
J.
held
that
statements
alleged
to
have
been
made
by
a
Crown
departmental
official
even
though
admitted,
could
not
bind
the
Crown.
It
is
well
established
that
the
defence
of
estoppel
cannot
be
invoked
against
the
Crown,
nor
can
the
acts
of
the
Crown’s
servants
or
agents
bind
it
by
estoppel.
The
interests
of
the
Crown
are
certain
and
permanent
and
they
must
not
suffer
by
the
misconduct
or
negligence
of
its
servants,
vide
R.
v.
Capital
Brewing
Co.,
[1933]
S.C.R.
226;
The
Queen
v.
Bank
of
Nova
Scotia,
11
S.C.R.
10
;
Bank
of
Montreal
v.
The
King,
38
S.C.R.
258,
affirmed
11
O.L.R.
595
and
Western
Vinegars
v.
Minister
of
Inland
Revenue,
[1938]
Ex.
C.R.
39.
The
defendants
must
therefore
fail
on
this
defence.
So
far
as
the
further
defence
as
to
at
least
part
of
the
claim
is
concerned,
viz.,
that
such
claim
is
barred
by
the
Statute
of
Limitations—again
the
defendants
must
fail.
By
virtue
of
sec.
108
of
The
Special
War
Revenue
Act
the
present
action
is
a
debt
due
under
a
statute
and
is
therefore
of
the
nature
of
a
specialty
debt
in
which
event
the
period
of
limitation
is
twenty
years.
Reference
to
Carlyle
v.
County
of
Oxford,
30
O.L.S.
413;
Meagher
v.
London
Loan,
64
O.L.R.
221.
The
defendants
further
contended
that
assuming
for
the
moment
they
had
failed
in
their
duty
to
affix,
cancel
and
retain
the
collected
stamps
as
required
by
statute
and
the
regulations
thereunder,
it
has
been
demonstrated
conclusively
that
stamps
of
the
necessary
aggregate
claimed
were
in
fact
purchased
from
the
Crown’s
authorized
stamp
vendor
and
hence
there
was
no
loss
of
revenue
sustained
by
the
Crown.
But
this
seems
to
me
to
be
aside
from
the
point
and
certainly
not
the
only
rational
conclusion.
In
fact
in
the
defendants’
letter,
(ex.
13),
the
defendants
themselves
offer
an
explanation
which
would
undoubtedly
be
a
matter
of
loss
to
the
Crown,
viz.,
the
re-sale
of
the
stamps
in
question.
Excise
stamps
which
are
uncancelled
and
unaccounted
for
are
obviously
negotiable.
To
argue
that
proof
of
the
purchase
of
excise
stamps
of
an
amount
leviable
on
any
one
transaction
or
series
of
transactions
is
probative
of
the
payment
or
collection
of
the
tax
exigible
with
respect
to
such
transaction
or
transactions
seems
to
me
to
be
wholly
untenable.
To
acquiesce
in
such
an
argument
strikes
one
as
being
as
reasonable
as
to
claim
that
a
man
has
paid
his
income
tax
by
purchasing
Dominion
of
Canada
Victory
Bonds
for
the
appropriate
amount
and
then
without
delivering
the
bonds
to
the
Collector
of
Income
Tax
for
cancellation
in
satisfaction
of
his
debt
to
the
Crown,
set
up
a
contention
that
his
income
tax
was
paid
because
the
Crown
had
received
the
money
which
he
had
appropriated
for
such
payment.
Again
the
defendants
plead
that
by
reason
of
the
fact
that
The
Special
War
Revenue
Act
provides
a
penalty
for
failure
to
comply
with
sec.
62,
thereof,
the
Crown
is
precluded
from
taking
the
present
action.
As
I
appreciate
the
rule
of
law
in
that
respect,
it
has
been
clearly
held
that
the
imposition
of
specific
penalties
or
the
provision
of
specific
remedies
by
a
statute
for
a
breach
thereof
does
not
abrogate
any
Common
Law
remedy
heretofore
open
to
a
claimant.
Quite
apart
from
the
right
of
action
contained
in
sec.
108,
in
my
opinion
the
plaintiff
is
clearly
entitled
to
the
Common
Law
right
of
action
against
the
defendants
as
trustees
of
moneys
or
the
equivalent
of
moneys
had
and
received
for
and
on
behalf
of
the
Crown.
As
is
said
by
Logie
J.
in
Rex
v.
Disappearing
Propeller
Boat
Co.
Ltd
(supra)
"The
scheme
of
this
legislation
(re
sales
tax)
was
to
make
the
vendor
the
agent
of
the
Government
to
collect
this
tax
,
.
.
It
is
admitted
that
under
this
head
the
defendants
collected
from
customers
the
sum
of
They
are
trustees
of
this
amount
for
the
plaintiff
and
must
pay
it
over
to
the
Government.
’
’
However,
in
any
event,
I
believe
it
is
abundantly
clear
that
the
Crown
has
the
right
to
recover
the
claim
herein
as
a
debt
due
under
sec.
108(1)
quite
independently
of
the
recovery
of
penalties
under
sec.
108(2)—vide
The
King
v.
Noxzema
Chemical
Co.
of
Canada
Ltd.,
[1942]
S.C.R.
178.
That
being
so,
I
can
see
no
necessity
for
considering
the
plaintiff’s
claim
for
a
mandatory
order
or
for
the
issue
of
the
prerogative
writ
of
mandamus.
But
if
the
alternative
remedy
is
deemed
advisable,
counsel
may
again
attend
and
speak
to
the
same.
There
shall
be
judgment
for
the
plaintiff
for
the
sum
claimed
with
the
costs
of
this
action.
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