KERWIN
J.:
(concurred
in
by
Rinfret
and
Hudson,
JJ.)
This
is
an
appeal
by
His
Majesty
the
King
from
a
decision
of
the
Exchequer
Court
dismissing
an
information
exhibited
by
the
Attorney
General
of
Canada
against
Noxzema
Chemical
Company
of
Canada,
Limited.
By
this
information
the
appellant
claimed
from
the
respondent,
under
the
provisions
of
the
Special
War
Revenue
Act,
certain
amounts
for
sales
and
excise
taxes
and
also
penalties
for
non-payment
of
these
taxes
at
the
times
specified
in
the
Act.
In
the
course
of
its
business,
the
respondent
manufactures
and
sells
toilet
articles
and
medical
preparations,
and
the
taxes
are
claimed
in
respect
of
sales
of
these
goods
made
by
the
respondent
in
the
period
from
January
1st
to
July
31st,
1939.
Under
section
80
of
the
Act,
the
respondent
became
liable
to
pay
excise
taxes
and
under
section
86
to
pay
sales
taxes,—in
each
case
on
"‘the
sale
price’’
of
the
goods
mentioned.
The
expression
44
the
sale
price’’
used
in
these
two
sections
is
not
defined.
The
question
for
determination
arises
because
of
the
action
of
the
Minister
of
National
Revenue.
taken
under
the
provisions
of
section
98
:—
”98.
Where
goods
subject
to
tax
under
this
Part
or
under
Part
XI
of
this
Act
are
sold
at
a
price
which
in
the
judgment
of
the
Minister
is
less
than
the
fair
price
on
which
the
tax
should
be
imposed,
the
Minister
shall
have
the
power
to
determine
the
fair
price
and
the
taxpayer
shall
pay
the
tax
on
the
price
so
determined.”
Section
80
is
in
Part
XI
of
the
Act
while
section
86
is
in
the
same
Part
(XIII)
as
section
98.
Prior
to
January
1st,
1939,
the
respondent
sold
its
products
direct
to
chain
stores
and
wholesale
dealers
at
tax-included
prices
and
paid
sales
and
excise
taxes
on-
the
basis
of
these
prices.
On
December
30th,
1938,
a
company
called
‘‘Better
Proprietaries
Limited”
was
incorporated
under
the
laws
of
the
Province
of
Ontario,
at
the
instance
of
J.
M.
Shaw,
the
President
of
the
respondent
company,
and
of
one
Andrews
who
was
interested
on
behalf
of
Bromo-Seltzer
Limited
in
the
distribution
of
the
latter’s
product
Bromo-Seltzer.
Better
Proprietaries
Limited
was
financed
by
Shaw
and
Andrews
who
each
loaned
the
Company
$2,500.
On
January
1st,
1939,
an
agreement
was
made
whereby
Better
•
Proprietaries
Limited
became
the
sole
distributors
in
Canada
of
the
respondent’s
products.
By
that
agreement
it
was,
provided
that
the
same
tax-included
prices
previously
charged
by
the
respondent
for
its
products
should
be
the
prices
to
be
charged
by
Better
Proprietaries
Limited
unless
otherwise
designated
by
the
respondent.
Better
Proprietaries
Limited
agreed
to
pay
the
respondent
prices
which
it
was
calculated
would
net
the
respondent
what
it
had
previously
received
from
dealers.
That
is,
it
was
estimated
that
the
difference
between
the
two
sets
of
prices
was
the
cost
of
selling
the
products,
of
which
cost
the
respondent
was
relieved
when
Better
Proprietaries
Limited
took
over
that
expense.
It
was
also
agreed
that
should
J.
M.
Shaw
at
any
time
cease
to
be
President
and
General
Manager
of
the
latter
company,
the
respondent
should
have
the
right
to
cancel
the
agreement.
During
the
period
from
January
1st
to
July
31st,
1939,
the
respondent
made
sales
of
the
goods
mentioned
to
Better
Proprietaries
Limited
at
the
prices
set
out
in
the
contract
between
the
two
companies.
As
a
result
of
these
sales
it
became
liable
to
pay
to
His
Majesty
sales
taxes
and
excise
taxes
not
later
than
the
last
day
of
the
first
month
succeeding
that
in
which
the
sales
were
made.
It
duly
paid
these
taxes
on
the
basis
of
the
sale
prices
actually
received
by
it
from
Better
Proprietaries
Limited.
In
pursuance
of
section
98
of
the
Act,
the
Minister
determined
on
or
about
September
27th,
1939,
that
these
sale
prices
were
less
than
the
fair
prices
on
which
the
taxes
should
be
imposed,
and
also
determined
what
those
fair
prices
should
be.
This
determination
appears
from
the
following
memorandum
:—
"‘Ottawa,
September
27th,
1939.
WHEREAS
the
Noxzema
Chemical
Company
of
Canada
Limited
did,
prior
to
January
1st
1939,
sell
the
whole
of
its
manufactured
products
to
various
wholesalers
and
chain
stores,
tax-
included,
and
account
for
excise
and
sale
tax
on
the
basis
of
such
sales
to
the
trade;
AND
WHEREAS,
commencing
January
1st
1939,
the
Noxzema
Chemical
Company
of
Canada
Limited
entered
upon
an
arrangement
with
Better
Proprietaries
Limited
whereby
the
latter
company
obtained
exclusive
selling
rights
of
the
products
of
the
Noxzema
Chemical
Company
of
Canada,
Limited
;
AND
WHEREAS,
during
the
period
January
1st
to
July
31st,
1939,
the
Noxzema
Chemical
Company
of
Canada
sold
or
purported
to
sell
to
Better
Proprietaries
Limited
the
whole
of
its
manufactured
products
for
resale
to
the
wholesalers
and
chain
stores
aforesaid
;
•
AND
WHEREAS
in
the
judgment
of
the
undersigned,
the
prices
obtained
by
the
Noxzema
Chemical
Company
of
Canada
Limited
from
sales
to
Better
Proprietaries
Limited
were
less
than
the
fair
prices
on
which
sales
tax
and
excise
tax
should
be
imposed.
The
undersigned,
therefore,
pursuant
to
the
powers
vested
by
Section
98
of
the
Special
War
Revenue
Act,
does
hereby
determine
that
the
prices
at
which
Better
Proprietaries
Limited
sold
the
goods
in
question
to
the
wholesalers
and
chain
stores
were
the
fair
prices
on
which
the
taxes
payable
by
the
Noxzema
Chemical
Company
of
Canada
should
be
imposed.
(SGD.)
J.
L.
Ilsley,
Minister
of
National
Revenue.’’
On
or
about
October
5th
1939,
notice
was
given
to
the
respondent
of
this
determination
and
of
the
additional
sales
and
excise
taxes
payable
on
the
basis
therein
set
forth,
and
a
demand
for
payment
was
made.
This
demand
not
being
complied
with,
the
information
was
filed
in
the
Exchequer
Court
under
the
provisions
of
section
108
of
the
Act,
the
first
four
subsections
of
which
read
as
follows
:—
"
108.
1.
All
taxes
or
sums
payable
under
this
Act
shail
be
recoverable
at
any
time
after
the
same
ought
to
have
been
accounted
for
and
paid,
and
all
such
taxes
and
sums
shall
be
recoverable,
and
all
rights
of
His
Majesty
hereunder
enforced,
with
full
costs
of
suit,
as
a
debt
due
to
or
as
a
right
enforceable
by
His
Majesty,
in
the
Exchequer
Court
or
in
any
other
court
of
competent
jurisdiction.
2.
Every
penalty
incurred
for
any
violation
of
the
provisions
of
this
Act
may
be
used
for
and
recovered
(a)
in
the
Exchequer
Court
of
Canada
or
any
court
of
competent
jurisdiction
;
or
(b)
by
summary
conviction
under
the
provisions
of
the
Criminal
Code
relating
thereto.
3.
Every
penalty
imposed
by
this
Act,
when
no
other
procedure
for
the
recovery
thereof
is
by
this
Act
provided,
may
be
sued
for,
prosecuted
and
recovered
with
costs
by
His
Majesty’s
Attorney-General
of
Canada,
or,
in
the
case
of
penalties
under
Parts
I,
II,
or
III,
in
the
name
of
the
Minister
of
Finance,
and
in
the
case
of
penalties
under
Parts
IV
to
XIV,
inclusive,
in
the
name
of
the
Minister
of
National
Revenue.
4.
Any
amount
payable
in
respect
of
taxes,
interest
and
penalties
under
Parts
XI,
XII
and
XIII
remaining
unpaid,
whether
in
whole
or
in
part
after
fifteen
days
from
the
date
of
sending
by
registered
mail
of
a
notice
of
arrears
addressed
to
the
taxpayer,
may
be
certified
by
the
Commissioner
of
Excise
and
on
the
production
to
the
Exchequer
Court
of
Canada
or
judge
thereof
or
such
officer
as
the
Court
or
judge
thereof
may
direct,
the
certificate
shall
be
registered
in
the
said
Court
and
shall,
from
the
date
of
such
registration,
be
of
the
same
force
and
effect,
and
all
proceedings
may
be
taken
thereon,
as
if
the
certificate
were
a
judgment
obtained
in
the
said
Court
for
the
recovery
of
a
debt
of
the
amount
specified
in
the
certificate,
including
penalties
to
date
of
payment
as
provided
for
in
Parts
XI,
XII
and
XIII
of
this
Act
and
entered
upon
the
date
of
such
registration,
and
all
reasonable
costs
and
charges
attendant
upon
the
registration
of
such
certificates
shall
be
recoverable
in
like
manner
as
if
they
were
part
of
such
judgment.’’
The
learned
President
considered
that
section
98
did
not
empower
the
Minister
to
fix
the
sale
prices
so
as
to
include
items
which
did
not
enter
into
the
computation
of
the
respondent’s
production
costs
and
its
sale
prices,
or
authorize
the
Minister
to
fix
those
sale
prices
at
other
than
the
actual
sale
prices
when
they
were
not
below
the
fair
prices
as
between
a
manufacturer
and
a
dealer,
the
dealer
being
an
independent
trading
corporation.
He
decided
that
section
98
must
be
construed
to
contemplate
a
case
where
a
producer
has
sold
his
goods
to
a
dealer
below
the
nominal
price,—below
an
average
of
the
prices
of
the
other
manufacturers
of
the
same
class
of
goods;
and
that
there
was
no
evidence
to
show
that
the
sale
prices
from
the
respondent
to
Better
Proprietaries
Limited
were
less
than
the
fair
prices.
On
these
grounds
he
dismissed
the
information.
In
this
Court,
Mr.
Carson
relied
on
the
decision
of
the
Judicial
Committee
in
Pioneer
Laundry
v.
Minister
of
National
Revenue,
[1940]
A.C.
127.
During
the
course
of
the
trial,
the
President
intimated
that
he
considered
this
decision
inapplicable.
and
it
would
appear
from
his
reasons
for
judgment
that
he
adhered
to
that
view.
With
that
opinion
I
agree.
While
in
the
Income
War
Tax
Act
there
under
review
there
was
no
appeal
provided
in
terms
from
a
decision
of
the
Minister
as
to
depreciation,
there
was
an
appeal
from
the
determination
as
ta
the
amount
of
taxes
to
be
paid,
and
the
proceedings
which
culminated
in
the
decision
of
the
Privy
Council.
originated
with
an
appeal
taken
from
such
determination.
It
was
held
that
in
arriving
at
the
amount
of
the
income
taxes
to
be
paid
by
the
Pioneer
Laundry
Company
Limited,
the
Minister
had
actually
not
exercised
the
discretion
left
to
him
by
the
Act
as
to
depreciation,
and
the
matter
was
referred
back
to
him
in
order
that
that
should
be
done.
In
the
present
case,
the
Minister
has
considered
and
determined
the
two
matters
mentioned
in
section
98
of
the
Special
War
Revenue
Act.
I
therefore
turn
to
the
grounds
upon
which
the
President
proceeded
and
which,
of
course,
are
relied
upon
by
the
respondent.
I
proceed
upon
the
assumptions
that
Better
Proprietaries
Limited
is
an
independent
sales
corporation
and
that
the
Minister
thought
otherwise.
Even
with
these
assumptions,
we
cannot
be
aware
of
all
the
reasons
that
moved
the
Minister
and,
in
any
event,
his
jurisdiction
under
section
98
was
dependent
only
upon
his
judgment
that
the
goods
were
sold
at
a
price
which
was
less,—not,
be
it
noted,
less
than
what
would
be
a
fair
price
commercially
or
in
view
of
competition
or
the
lack
of
it,—but
less
than
what
he
considered
was
the
fair
price
on
which
the
taxes
should
be
imposed.
The
legislature
has
left
the
determination
of
that
matter
and
also
of
the
fair
prices
on
which
the
taxes
should
be
imposed
to
the
Minister
and
not
to
the
court.
In
my
view,
section
98
confers
upon
the
Minister
an
administrative
duty
which
he
exercised
and
as
to
which
there
is
no
appeal.
In
such
a
ease
the
language
of
the
Earl
of
Selbourne
in
Spackman
v.
Plumstead
District
Board
of
Works
(1885),
10
A.C.
229
at
235
appears
to
be
particularly
appropriate
:—
"And
if
the
legislature
says
that
a
certain
authority
is
to
decide,
and
makes
no
provision
for
a
repetition
of
the
inquiry
into
the
same
matter,
or
for
a
review
of
the
decision
by
another
tribunal,
prima
facie,
especially
when
it
forms,
as
here,
part
of
the
definition
of
the
case
provided
for,
that
would
be
binding.
‘
‘
In
any
event
it
is
quite
clear
that
the
Minister
acted
honestly
and
impartially
and
that
he
gave
the
respondent
every
opportunity
of
being
heard,
and
in
fact
heard
all
it
desired
to
place
before
him.
Whatever
might
be
the
powers
of
the
Exchequer
Court,
if
proceedings
had
been
taken
under
subsection
4
of
section
108,
as
to
which
it
is
unnecessary
to
express
any
opinion,
the
taxes,
if
properly
payable,
are
recoverable
under
subsection
1
of
section
108
as
a
debt
due
to
or
as
a
right
enforceable
by
His
Majesty
in
the
Exchequer
Court
or
in
any
other
court
of
competent
jurisdiction.
In
view
of
the
wording
of
section
98,
nothing,
I
think,
need
be
shown
other
than
what
appears
in
the
present
case
and
the
obligation
of
the
respondent
is
to
pay
taxes
on
the
basis
of
the
prices
determined
by
the
Minister.
It
has
not
been
overlooked
that
as
of
January
1st,
1939,
Bromo
Seltzer
Limited
entered
into
an
agreement
with
Better
Proprietaries
Limited
with
reference
to
the
sale
in
Canada
of
its
products,
in
terms
similar
to
the
agreement
between
the
respondent
and
Better
Proprietaries
Limited.
Prior
thereto
Bromo
Seltzer
Limited
had
disposed
of
its
product
throughout
Canada
through
a
separate
selling
organization
and
the
sales
taxes
were
figured
by
it
and
accepted
by
the
Minister
on
the
basis
of
the
prices
which
it
received
from
the
selling
organization.
That
organization
had
no
connection
whatever
with
Bromo
Seltzer
Limited
but
was
a
company
engaged
in
marketing
different
products.
After
the
agreement
between
Better
Proprietaries
Limited
and
Bromo
Seltzer
Limited,
the
latter
paid,
and
the
Minister
accepted,
sales
taxes
on
its
product
on
the
basis
of
the
prices
received
by
it
from
Better
Proprietaries
Limited.
Whether
that
course
is
still
being
followed,
we
do
not
know.
Nor
may
we
speculate
as
to
what
difference,
if
any,
there
is
between
the
case
of
Bromo
Seltzer
Limited
and
the
present
case.
The
result
of
such
a
speculation
could
have
no
effect
upon
the
matter
to
be
determined
in
this
appeal.
The
appeal
should
be
allowed,
the
judgment
of
the
Exchequer
Court
set
aside,
and
the
appellant
should
have
judgment
for
the
additional
sales
and
excise
taxes
payable
as
a
result
of
the
Minister’s
determination.
The
appellant
is
also
entitled
to
the
penalties
provided
for
by
subsection
5
of
section
108
of
the
Act
and
the
costs
of
the
action
and
appeal.
Davis,
J.—(concurred
in
by
the
Chief
Justice).
Much
discussion
took
place
before
us
on
the
argument
with
reference
to
the
decision
in
the
Palmolive
case,
[1933]
S.C.R.
131.
But
that
case
turned
upon
its
own
special
facts
and
I
do
not
think
the
decision
governs
the
facts
of
the
case
now
before
us.
An
entirely
different
question
was
raised.
The
judgment
of
this
Court
in
that
case
was
delivered
February
7th,
1933,
and
shortly
thereafter
Parliament
amended
the
Special
War
Revenue
Act
by
Ch.
50,
1932-33,
sec.
20,
adding
a
provision
(sec.
98)
that
where
goods
are
sold
at
a
price
(that
is,
by
the
manufacturer
or
producer)
"‘which
in
the
judgment
of
the
Minister”
is
less
than
"the
fair
price
on
which
the
tax
should
be
imposed,”
the
Minister
shall
have
the
power
to
determine
the
fair
price
and
the
taxpayer
shall
pay
the
tax
on
the
price
so
determined.
The
important
question
that
arises
upon
this
appeal
is
one
of
law,
as
to
the
position
of
the
Minister
under
this
section
of
the
statute;
that
is,
whether
his
act
is
purely
an
administrative
act
in
the
course
of
settling
from
time
to
time
the
policy
of
his
Department
under
the
statute
in
relation
to
the
various
problems
which
arise
in
the
administration
of
the
statute,
or
whether
he
is
called
upon
under
the
section
of
the
statute
to
perform
a
duty
of
that
sort
which
is
often
described
as
a
quasijudicial
duty.
My
own
view
is
that
it
is
a
purely
administrative
function
that
was
given
to
the
Minister
by
Parliament
in
the
new
sec.
98
;
to
enable
him
to
see,
for
instance,
that
schemes
are
not
employed
by
one
or
more
manufacturers
or
producers
in
a
certain
class
of
business
which,
if
the
actual
sale
price
of
the
product
is
taken,
may
work
a
gross
injustice
to
and
constitute
discrimination
against
other
manufacturers
or
producers
in
the
same
class
of
business
who
do
not
resort
to
such
schemes
which
have
the
result
of
reducing
the
amount
on
which
the
taxes
become
payable.
If
that
be
the
correct
interpretation,
in
point
of
law,
of
the
section
in
question,
then
the
administrative
act
of
the
Minister
is
not
open
to
review
by
the
Court.
It
is
to
be
observed
that
no
statutory
right
of
appeal
is
given.
If,
on
the
other
hand,
the
function
of
the
Minister
under
the
section
may
be
said
to
be
of
a
quasi-judicial
nature,
even
then
all
that
was
necessary
was
that
the
taxpayer
be
given
a
fair
opportunity
to
be
heard
in
the
controversy;
and
to
correct
or
to
contradict
any
relevant
statement
prejudicial
to
its
interests.
Reliance
has
consistently
been
put
by
the
courts
since
1911
upon
the
language
of
Lord
Loreburn
in
Board
of
Education
v.
Rice,
[1911]
A.C.
179,
at
182;
"'In
the
present
instance,
as
in
many
others,
what
comes
for
determination
is
sometimes
a
matter
to
be
settled
by
discretion,
involving
no
law.
It
will,
I
suppose,
usually
be
of
an
administrative
kind;
but
sometimes
it
will
involve
matter
of
law
as
well
as
matter
of
fact,
or
even
depend
upon
matter
of
law
alone.
In
such
cases
the
Board
of
Education
will
have
to
ascertain
the
law
and
also
to
ascertain
the
facts.
I
need
not
add
that
in
doing
either
they
must
act
in
good
faith
and
fairly
listen
to
both
sides,
for
that
is
a
duty
lying
upon
every
one
who
decides
anything.
But
I
do
not
think
they
are
bound
to
treat
such
a
question
as
though
it
were
a
trial.
They
have
no
power
to
administer
an
oath,
and
need
not
examine
witnesses.
They
can
obtain
information
in
any
way
they
think
best,
always
giving
a
fair
opportunity
to
those
who
are
parties
in
the
controversy
for
correcting
or
contradicting
any
relevant
statement
prejudicial
to
their
view.
Provided
this
is
done,
there
is
no
appeal
from
the
determination
of
the
Board
under
s.
7,
sub-s.
3,
of
this
Act.
The
Board
have,
of
course,
no
jurisdiction
to
decide
abstract
questions
of
law,
but
only
to
determine
actual
concrete
difference
that
may
arise,
and
as
they
arise,
between
the
managers
and
the
local
education
authority.
The
Board
is
in
the
nature
of
the
arbitral
tribunal,
and
a
Court
of
law
has
no
jurisdiction
to
hear
appeals
from
the
determination
either
upon
law
or
upon
fact.
But
if
the
Court
is
satisfied
either
that
the
Board
have
not
acted
judicially
in
the
way
I
have
described,
or
have
not
determined
the
question
which
they
are
required
by
the
Act
to
determine,
then
there
is
a
remedy
by
mandamus
and
certiorari.’’
But
here
the
taxpayer
very
frankly
admits
that
its
solicitor
was
afforded
every
opportunity
by
the
Minister
to
be
heard
and
did
in
fact
state
in
detail
the
taxpayer’s
position
in
the
matter,
supplemented
with
such
statements
and
references
as
he
thought
advisable,
and
that
the
Minister’s
decision
was
not
made
until
after
that
had
been
done.
A
good
deal
was
also
said
in
argument
about
the
Judgment
of
the
Judicial
Committee
in
the
Pioneer
Laundry
case
(
[1940]
A.C.
127),
and
an
attempt
was
made
by
the
respondent
to
show
that
the
Minister
here
had
acted
against
‘‘proper
legal
principles,”
but
I
cannot
see
that
there
is
any
valid
ground
for
that
contention.
In
the
Pioneer
Laundry
case
the
manufacturer
had
a
statutory
right
to
an
allowance
for
depreciation
on
its
machinery.
The
amount
of
that
allowance
was
to
be
"such
fair
allowance
as
the
Minister
in
his
discretion
may
see
fit.”
The
Minister
said
he
would
allow
nothing,
and
in
the
reasons
of
his
Commissioner
of
Taxation
which
he
aecepted
there
were
very
fairly
and
fully
set
out
the
grounds
upon
which
no
allowance
was
arrived
at;
and
those
grounds
were
held
to
be
against
‘‘proper
legal
principles”.
JI
cannot
see
that
the
decision
in
the
Pioneer
Laundry
ease
is
relevant
to
the
facts
of
this
appeal.
I
should
therefore
allow
the
appeal
and
set
aside
the
judgment
of
the
Exchequer
Court.
The
appellant
should
have
Judgment
for
the
additional
sales
and
excise
taxes
payable
as
a
result
of
the
Minister’s
determination.
The
appellant
is
also
entitled
to
the
penalties
provided
for
by
subsection
5
of
section
106
of
the
Act
and
the
costs
of
the
action
and
of
the
appeal.
Appeal
allowed
with
costs.
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