Date: 19991209
Docket: A-513-97
CORAM: STRAYER J.A.
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
SASKATCHEWAN GOVERNMENT INSURANCE
Appellant
(Plaintiff)
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Respondent
(Defendant)
| Heard at Toronto, Ontario, on Thursday, December 9, 1999 |
Judgment Delivered Orally from the Bench at Toronto, Ontario
on Thursday, December 9, 1999
REASONS FOR JUDGMENT BY: STRAYER J.A.
Date: 19991209
Docket: A-513-97
CORAM: STRAYER J.A.
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
SASKATCHEWAN GOVERNMENT INSURANCE
Appellant
(Plaintiff)
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Respondent
(Defendant)
REASONS FOR JUDGMENT
(Delivered from the Bench at Toronto, Ontario on
Thursday, December 9, 1999)
STRAYER J.A.:
I. We are all of the view that this appeal must be dismissed.
II. The appeal involves difficult questions of interpretation of subsection 44.19(1) of the Excise Tax Act1 which in 1986, when the facts of this case arose, provided as follows:
| 44.19 (1) Where tax under part III, IV or V has been paid in respect of any goods and Her Majesty in right of a province has purchased or imported the goods for any purpose, other than
| (b) use by a board, commission, railway, public utility, university, manufactory, company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council of the province, or |
| (c) use by Her Majesty in that right, or any agents or servants of Her Majesty in that right, in connection with the manufacture of production of goods or use for other commercial or mercantile purposes, |
an amount equal to the amount of that tax shall, subject to this Part, be paid either to Her Majesty in that right or to the importer, transferee, manufacturer, producer, wholesaler, jobber or other dealer, as the case may require, if Her Majesty or the dealer applies therefor within two years after Her Majesty purchased or imported the goods.
|
44.19 (1) Lorsque la taxe a été payée en vertu de la Partie III, IV ou V à l"égard de marchandises et que Sa Majesté du chef d"une province a acheté ou importé les marchandises à une fin autre que:
| (b) l"utilisation par un conseil, une commission, un chemin de fer, un service public, une université, une usine, une compagnie ou un organisme que le gouvernement de la province possède, contrôle ou exploite, ou sous l"autorité de la législature ou du lieutenant-gouverneur en conseil de la province, ou |
| (c) l"utilisation par Sa Majesté de ce chef, ou par ses madataires ou préposés, relativement à la fabrication ou la production de marchandises, ou pour d"autres fins commerciales ou mercantiles, |
une somme égale au montant de cette taxe doit, sous réserve de la présente Partie, être versée soit à Sa Majesté de ce chef soit à l"importateur, au cessionaire, au fabricant, au producteur, au marchand en gros, à l"intermédiaire ou à un autre commerçant, selon le cas, si Sa Majesté ou le commerçant en fair la demande dans les deux ans suivant l"achat ou l"importation des marchandises par Sa Majesté.
|
III. We are satisfied that, notwithstanding the arguments of counsel for the respondent, the license plates in question were purchased by the Crown in right of Saskatchewan.2 They were purchased by Saskatchewan Government Insurance ("SGI") the statutory agent of the Crown, by the expenditure of funds belonging to the Crown, and they became the property of the Crown.
IV. The more difficult question is as to whether SGI made "use" of the license plates as contemplated by paragraph 44.19(1)(b) and if so, is it thereby precluded from claiming a rebate of the federal sales tax it paid when it purchased the license plates in 1986.
V. Counsel for the appellant argued that if there were any purpose for the purchase other than those listed in paragraphs 44.19(1)(a), (b) or (c), then a rebate must be made. Alternatively, this would be so if there were more than one purpose contemplated, and the dominant or primary purpose was a use other than those described in paragraphs 44.19(1)(a), (b) or (c). In spite of counsel"s cogent argument to this effect, we agree with the learned trial judge that there may be more than one purpose for the purchase of taxable goods and if any of those purposes involves a use described in paragraphs 44.19(1)(a), (b) or (c) then a rebate is excluded. This appears to be the plain meaning of the subsection.
VI. According to the trial judge,3 the parties both agreed at trial that SGI was an entity as described in paragraph (b). That would indeed appear to be the case as a matter of law as it is a "company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council..." Although SGI is by its governing statute an agent of Her Majesty in right of Saskatchewan "for all its purposes", may act only as such agent, and holds property which is all deemed to be Crown property,4 this does not alter the fact that it comes within paragraph (b). That is, paragraph (b) does not exclude Her Majesty as long as Her Majesty is clothed in the attire of an agency, commission, corporation, etc. of a provincial government.
VII. Like the learned trial judge, we are of the view that when SGI issues license plates to motorists for the purpose of administering the automobile registration system for the province, as well as for operating a compulsory automobile insurance scheme, it is using the license plates. Property in the plates remains in the Crown, its principal, and SGI can in certain circumstances demand the return of the plates. By any ordinary meaning of the word "use", SGI is thus using the plates in carrying out its duties: it has the lawful control of the plates for these purposes. This remains the case even if its functions are in large part typically governmental. It is its legal organization as a corporation owned and controlled by the Crown in right of the province that attracts the application of paragraph (b) so as to preclude a rebate.
VIII. The appeal will be dismissed with costs.
"B. L. Strayer"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKETS: A-513-97
| STYLE OF CAUSE: SASKATCHEWAN GOVERNMENT INSURANCE |
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA |
DATE OF HEARING: THURSDAY, DECEMBER 9, 1999
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR JUDGMENT BY: STRAYER J.A. |
Delivered at Toronto, Ontario
on Thursday, December 9, 1999
APPEARANCES: Mr. Donald D. Hanna
Mr. Christopher Rupar
| SOLICITORS OF RECORD: Osler, Hoskin & Harcourt |
Box 50, Stn. 1st Can. Place
Toronto, Ontario
Morris Rosenberg
| Deputy Attorney General of Canada |
FEDERAL COURT OF APPEAL
Date: 19991209
Docket: A-513-97
BETWEEN:
| SASKATCHEWAN GOVERNMENT INSURANCE |
Appellant
(Plaintiff)
| HER MAJESTY THE QUEEN IN RIGHT OF CANADA |
Respondent
(Defendant)
__________________
1 R.S.C. 1970, c. E-13.
2 See e.g. H.M. v. Stevenson Construction Co. Ltd. et al [1979] C.T.C. 86 at 89-90 (F.C.A.)
3 Appeal Book p. 25.
4 See Stat. Sask. 1979-80, c. S-19.1, s.6.
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