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T-2454-75
Rothmans of Pall Mall Canada Limited and Imperial Tobacco Limited (Applicants)
v.
Minister of National Revenue and Deputy Minis ter of National Revenue for Customs and Excise, Benson & Hedges (Canada) Limited, and The Macdonald Tobacco Inc. (Respondents)
Trial Division, Heald J.—Ottawa, July 24 and 28, 1975.
Jurisdiction—Customs and excise—Extraordinary reme- dies—Whether applicants aggrieved parties—Duty on ciga- rettes—Whether cigarette measuring less than four inches when filter not included and over four inches when filter included to be treated as two cigarettes—Excise Act, R.S.C. 1970, c. E-12, ss. 6 (as am. R.S.C. 1970 (1st Supp.) c. 15, s. 3), 202—Customs Tariff R.S.C. 1970, c. C-41, s. 21(1)(d).
Revenue Canada reviewed the question as to whether the filter should be included in measuring cigarette length, having regard to the definitions of "cigarette" and "manufactured tobacco" in section 6 of the Excise Act. The conclusion was that a unit in which the portion containing tobacco was less than four inches would be considered as one cigarette, notwith standing that its total length, including filter, would exceed four inches. Applicants seek relief against this conclusion; respondents object to the Court's jurisdiction.
Held, dismissing the motion, the Court lacks jurisdiction. Applicants have not established that they are aggrieved parties and have a proprietary interest in the Department's action. Their rights remain unimpaired. Neither produces or markets a cigarette exceeding four inches in length, nor do they plan to. The argument that a competitive advantage is being given to their competitors does not create status. The Courts will inter vene only where legislation imposes on a ministez a peremptory duty to do a particular act which entails a legal duty toward an individual. The only duty here is to the Crown. The interpreta tion by the Minister is not a decision, but a personal opinion. The Minister, in the course of the interpretation, is not a person "having legal authority to determine questions affecting the rights of subjects and having the duty to act judicially".
Regina v. Commissioners of Customs and Excise [1970] 1 W.L.R. 450, agreed with. Landreville v. The Queen [1973] F.C. 1223; Woon v. M.N.R. [1951] Ex.C.R. 18; R. v. Electricity Commissioners [1924] 1 K.B. 171; Lord Nelson Hotel Ltd. v. City of Halifax (1973) 33 D.L.R. (3d) 98 and Thorson v. Attorney General of Canada (No. 2) [1975] 1 S.C.R. 138, distinguished.
APPLICATION.
COUNSEL:
R. T. Hughes and C. Young for applicants.
G. W. Ainslie, Q.C., for respondent Minister of National Revenue.
J. B. Claxton, Q.C., and G. Audet for respondent Benson & Hedges.
W. B. Williston, Q.C., R. Lemoyne and R. W. Cosman for respondent Macdonald Tobacco Inc.
SOLICITORS:
D. F. Sim, Q. C., Toronto, for applicants. Deputy Attorney General of Canada for respondent Minister of National Revenue. Lafleur & Brown, Montreal, for respondent Benson & Hedges.
Fasken and Calvin, Toronto, for respondent Macdonald Tobacco Inc.
The following are the reasons for judgment rendered in English by
HEALD J.: This is an application by notice of motion in which the applicants ask for a writ of prohibition, a writ of mandamus, an injunction and a writ of certiorari against the respondents, the Minister of National Revenue and the Deputy Minister of National Revenue for Customs and Excise. The other two respondents, at their own request, were added as respondents for all purposes under the Rules by the order of my brother Gibson J. dated July 16, 1975. Details of the relief asked for in the notice of motion read as follows:
1. Issuing a writ of prohibition, or giving relief in the nature of prohibition, directed against the respondents to prohibit them from excluding from the length of cigarettes, as defined in section 2 of the Excise Act, as amended by R.S.C. 1970, (1st Supp.) c. 15, s. 3, that portion of said length being the length of the filter or tip, for the purposes of calculating the number of cigarettes upon which duties are to be imposed, levied and collected according to section 202 of the Excise Act, R.S.C. 1970, c. E-12 and the Schedule, Part IV, sections 2 and 3, as amended S.C. 1974-75, c. 24, s. 25;
2. Issuing a writ of mandamus, or giving relief in the nature of mandamus, directed against the respondents, to require them to include in the length of cigarettes, as defined in section 2 of the Excise Act, as amended by R.S.C. 1970, (1st Supp.) c. 15, s. 3, that portion of said length being the length of the filter or tip,
- for the purposes of calculating the number of cigarettes upon which duties are to be imposed, levied and collected according
to section 202 of the Excise Act, R.S.C. 1970, c. E-12 and the Schedule, Part IV, sections 2 and 3, as amended S.C. 1974-75, c. 24, s. 25;
3. Issuing an injunction, or giving relief in the nature of an injunction, directed against the respondents to restrain them from excluding from the length of cigarettes as defined in section 2 of the Excise Act, as amended by R.S.C. 1970, (1st Supp.) c. 15, s. 3, that portion of said length being the length of the filter or tip, for the purposes of calculating the number of cigarettes upon which duties are to be imposed, levied and collected according to section 202 of the Excise Act, R.S.C. 1970, c. E-12 and the Schedule, Part IV, sections 2 and 3, as amended S.C. 1974-75, c. 24, s. 25;
4. Issuing a writ of certiorari, or granting relief in the nature of certiorari, directed against the respondents to quash any decision or purported decision by them, excluding from the length of cigarettes, as defined in section 2 of the Excise Act, as amended by R.S.C. 1970, (1st Supp.) c. 15, s. 3, that portion of said length being the length of the filter or tip, for the purposes of calculating the number of cigarettes upon which duties are to be imposed, levied and collected according to section 202 of the Excise Act, R.S.C. 1970, c. E-12 and the Schedule, Part IV, sections 2 and 3, as amended S.C. 1974-75, c. 24, s. 25; or
At the outset of the hearing, counsel for the respondents made a preliminary objection to the Court's jurisdiction to grant the relief asked for. I heard extensive argument from counsel for all the parties on the question of jurisdiction and at the conclusion of said argument, I reserved my deci sion thereon.
Under section 202 of the Excise Act, R.S.C. 1970, c. E-12, an excise duty is imposed in respect of cigars and tobacco manufactured within Canada. Section 6 of said Act defines both "ciga- rette" and "manufactured tobacco". Those defini tions read as follows:
"cigarette" means every description of cigarette and any roll or tubular construction intended for smoking that is not a cigar; and where any cigarette, exceeds four inches in length, each three inches or fraction thereof shall be deemed to be a separate cigarette;
"manufactured tobacco" means every article made by a tobac co manufacturer from raw leaf tobacco by any process whatever, except cigars; and includes cigarettes and snuff;
The principal issue in this motion is whether a cigarette which has a length of less than four inches when a filter fabricated of a material other than of tobacco is excluded from the measurement of its length, has a length of more than four inches when such filter is included in the measurement of its length, is, by virtue of the concluding words of
the definition of "cigarette" supra, to be treated as two cigarettes for the purpose of computing the excise duty levied under section 202 of the Act.
The determination of this issue affects not only cigarettes manufactured in Canada but also ciga rettes imported into Canada by virtue of section 21(1)(d) of the Customs Tariff R.S.C. 1970, c. C-41 which provides for an additional customs duty on cigarettes imported into Canada of an amount equal to the amount that would have been imposed under the Excise Act had the cigarettes been manufactured in Canada.
The evidence establishes that prior to June of 1975, there were no cigarettes on the market in Canada having an overall length of more than four inches including the filter; that since June of this year, the respondents Benson & Hedges (Canada) Limited and Macdonald Tobacco Inc. have intro duced to the Canadian market cigarettes having an overall length of more than four inches includ ing the filter but less than four inches if the filter is excluded.
Apparently officials of the Ministry of National Revenue were requested to review the question as to whether or not the filter should be included in measuring cigarette length having regard to the definitions of "cigarette" and "manufactured tobacco" as contained in section 6 of the Act. Said officials, after considering the problem, and after obtaining legal advice, concluded "that the Excise Act should be administered and the duty payable thereunder should be calculated on the basis that a unit in which the portion containing tobacco was less than four inches would be considered as one cigarette, notwithstanding that its total length, when the filter was taken into account would exceed four inches." (See affidavit of Howard Perrigo, Assistant Deputy Minister, Excise, Department of National Revenue, Customs & Excise, paragraph 7).
It is this conclusion of which the applicants complain and in respect of which they seek the relief as above set out.
After a consideration of the arguments advanced by all counsel, I have concluded that the Trial Division of this Court does not have jurisdic tion to grant the relief asked for in the notice of motion.
A ground of objection to the Court's jurisdic tion, which is, in my view, fatal to the applicants' motion, is that they have not established a status or locus standi entitling them to bring the present motion. In order to establish such status, they would have to show that they are aggrieved parties and that they have a proprietary interest in the actions of the Minister and his officials'. On the facts here present, the applicants' legal rights remain unimpaired and have not been infringed in any way. The evidence is that neither of the appli cants produces or markets a cigarette more than four inches in length so that a change by the Minister's officials in the method of measurement of cigarettes cannot affect them in any way. Nor is there any evidence before me that the applicants contemplate producing or marketing such a prod uct. What the applicants are submitting is that by proposing to allow their competitors (Benson & Hedges (Canada) Limited and Macdonald Tobac co Inc.) to pay excise tax on the basis of the new products being considered one cigarette instead of two (the practical effect of the new method of measurement of cigarette length) said competitors are being given a competitive advantage. Such a position is not, in my view, sufficient to give these applicants the necessary status to make this application. I agree with the statement of counsel for the Attorney General that "Administrative law remedies ought not to be used as part of the weapons in the struggle in the market-place be tween contending competitors for clientele of the smoking public."
A case with facts somewhat similar to the case at bar is the case of Regina v. Commissioners of Customs and Excise 2 . In that case, the statute imposed an excise duty on off-course betting prem ises, payable by an annual sum' or two half-yearly instalments. As a result of difficulties encountered
I See for example: R. v. Ipswich Justices, ex parte Robson [1971] 2 All E.R. 1395; Buxton v. M. of Housing [1960] 3 All E.R. 408; Orpen v. Roberts [1925] S.C.R. 364; Smith v. A. G. of Ontario [1924] S.C.R. 331 at 337; Regina v. Guardians of Lewisham Union [1897] 1 Q.B. 498 at 501; Re Provincial Board of Health (1920) 51 D.L.R. 444 at 451 and Cowan v. C.B.C. [1966] 2 O.R. 309.
2 [1970] 1 W.L.R. 450.
by bookmakers in paying the duty, representations were made to the Treasury officials as a result of which, the Commissioners of Customs & Excise stated in press notices that officials were author ized to issue licences on receipt of one month's duty and eleven post-dated cheques. This new procedure was widely adopted by bookmakers. However, two bookmakers who had complied with the Act by paying the tax in two instalments, applied for mandamus requiring the Commission ers to enforce the provisions of the Act on the ground that because of the arrangement author ized by the Minister the number of their competi tors was greater than it otherwise would have been, and that the terms of the statute were not being complied with regarding the payment of duty. The Court refused the application holding that, although there was no statutory authority for the Minister's action, yet, since the applicants were not seeking to enforce a specific right or duty owed to them, nor had they any interest over and above that of the community, and the ulterior motive of putting people out of business was not such an interest, they had not shown a degree of interest sufficient to support their applications. Lord Parker C.J. said at page 455 of the judgment:
Accordingly, so far as I am concerned, the only and real point as I see it in this case is whether it can be said that the applicants have the necessary interest. In regard to mandamus, this has always been dealt with on a very strict basis, and in Reg. v. Lewisham Union Guardians (1897) 1 Q.B. 498, it was stated by Wright J., who was an authority on these matters, at p. 500:
Certainly, so long as I have had anything to do with applica tions for a mandamus I have always understood that the applicant, in order to entitle himself to a mandamus, must first of all show that he has a legal specific right to ask for the interference of the court.
Quite clearly the applicants have no such specific right as individuals. They are not complaining that a licence was not issued to them. They are not complaining that they were not offered the same terms as other bookmakers in regard to monthly payments. They are not seeking to enforce any specific right or, put another way, any specific duty owed to them.
Applicants' counsel urged upon me in this
regard, the City of Halifax 3 case and the Thorson 4 case. Both of these cases are, in my view, clearly distinguishable from the case at bar. The City of Halifax case (supra) involved a re-zoning of property owned by a third party from residen tial to commercial in order to enable said third party to construct a 17-storey hotel thereon. The appellant owned adjacent residential property and a hotel situated diagonally across from the lands owned by the third party. The appellant in that case was held entitled to bring an action because its interests were materially affected by the application to re-zone. In the case at bar, the applicants' legal rights and proprietary interests are not affected in any way.
The Thorson case (supra) is likewise distin guishable. The question for determination in that case was whether a person who seeks to challenge the constitutional validity of an Act of Parliament has standing as a taxpayer to bring such an action, said question being answered in the affirmative by a majority of the Court. However, the majority decision seems to be restricted so as to not apply to legislation that is regulatory in nature but applies to legislation that is declaratory and directory, creating no offences and imposing no penalties. Thus the Thorson decision clearly does not apply to a statute like the Excise Act which is regulatory in nature and which does create offences and impose penalties.
I have the further view that, quite apart from the failure of the applicants to establish status, the Court is without jurisdiction to deal with subject motion for other reasons. There is ample authority for the proposition that when a Minister of the Crown is performing his duties as a servant or agent of the Crown and where Parliament has not imposed upon the Minister a specific duty toward a citizen, the remedy for failure to perform the duty does not lie with the Courts. The Courts will intervene only in cases where the legislation imposes upon a Minister a peremptory duty to do a particular act which entails a legal duty toward an individual. In such a case the Minister is not
Lord Nelson Hotel Ltd. v. City of Halifax (1973) 33 D.L.R. (3d) 98.
4 Thorson v. Attorney General of Canada (No. 2) [1975] 1 S.C.R. 138.
accountable to the Crown but to the individual to whom the legal duty is owed'.
In the case at bar, by section 4 of the Depart ment of National Revenue Act, R.S.C. 1970, c. N-15 and by the Schedule to said Act, the Minis ter of National Revenue is charged with responsi bility in respect of the collection of excise duty. Section 202 of the Excise Act provides for excise tax on "manufactured tobacco" which, by the definition contained in section 6 of the Excise Act includes cigarettes. However, I see nothing in either statute which imposes upon the Minister any duty toward any particular person or class of persons, other than toward the Crown. Applicants' counsel pointed to section 42(1) 6 of the Excise Act as imposing an obligation to collect the largest amdunt of duty possible. However, any obligation imposed by section 42(1) is an obligation toward the Crown, and not toward any particular person or class of persons. My other comment concerning section 42(1) is that when taken in context, it clearly refers only to the mechanical act of cal culating and computing duty. The subsection says that when two or more methods for determining the amount of duty payable are provided for, the method yielding the greatest amount of duty shall be used. What we have in the case at bar is a case of two conflicting interpretations of the definition of "cigarettes" as contained in section 6 of the Act. To read into section 42(1) of the Act a duty imposed on the Minister and his officials to inter pret the word "cigarettes" in a manner which will result in the collection of more excise tax (and by implication inviting him to ignore the usual rules and aids to statutory interpretation) would, in my view, result in a distortion of the plain meaning of said section 42(1).
5 See for example: The Queen v. Secretary of State for War [1891] 2 Q.B. 326 at 338; The Queen v. Lord Commissioners of the Treasury (1871-72) 7 Q.B. 387 and Regina v. Minister of Natural Resources [1973] 1 W.W.R. 193.
6 42. (1) The amount of duty shall be calculated on the measurements, weights, accounts, statements and returns, taken, kept or made, as herein provided, subject to correction and approval by the collector or other officer thereunto duly authorized; and when two or more methods for determining quantities or the amount of duty to be paid are provided for, the method that yields the largest quantity or the greatest amount of duty shall be the standard.
For the foregoing reasons, I have concluded that mandamus will not lie on the facts here present. If mandamus does not lie, it is even clearer that the remedy of injunction is not available to the applicants'.
Turning now to certiorari. Certiorari lies only to quash something which is a determination or a decisions. In the case at bar, the interpretation or proposed interpretation by the Minister and his officials of section 6 of the Excise Act is nothing more than his personal opinion as to the meaning of the statute and is thus similar to the "ruling" discussed by Cameron J. in Woon v. M.N.R. 9 .
Furthermore, neither certiorari or prohibition will lie on the facts of the present case since the Minister, in the course of his interpretation of a provision of the Excise Act is not a person "having legal authority to determine questions affecting the rights of subjects and having the duty to act judicially" (per Lord Atkin L.J. in R. v. Electricity Commissioners [ 1924] 1 K.B. 171)'°.
For the foregoing reasons, applicants' motion is dismissed with costs.
7 See: S. A. DeSmith—Judicial Review of Administrative Action, 2nd Edition at pages 461 and 462.
s Per Pratte J. in Landreville v. The Queen [1973] F.C. 1223 at page 1227.
9 [1951] Ex.C.R. 18 at 27. See also: In re Danmor Shoe Co. Ltd. [1974] 1 F.C. 22.
10 See also: Re Low [1967] 1 O.R. 135; R. v. Board of Broadcast Governors ex parte Swift Current Telecasting Co. [1962] O.R. 657; R. v. Statutory Visitor to St. Lawrence Hospital [1953] 2 All E.R. 766 and R. v. Ontario Labour Relations Board (1966) 57 D.L.R. (2d) 521 at page 530.
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