T-1243-79
Dantex Woollen Co. Inc. (Applicant)
v.
Minister of Industry, Trade and Commerce, C. D.
Arthur, H. R. Wilson, Borys Budny and Millie
Thompson (Respondents)
Trial Division, Addy J.—Ottawa, April 3, 4 and
11, 1979.
Prerogative writs — Application for injunction restraining
respondents from interfering with importation of goods or
alternatively for mandamus ordering respondents to issue
import permits — Applicant importing goods included in item
47 on Import Control List — That item on Import Control List
not made subject to limitation as to extent, quantity or time —
Whether or not Governor in Council failed to exercise judg
ment and control as directed by Parliament — If so, whether
or not item improperly and illegally included on Import
Control List — Export and Import Permits Act, R.S.C. 1970,
c. E-17, ss. 5(1),(2), 6 — Import Control List, SOR/70-359 as
amended by SOR/79-380, item 47.
The present application is for an injunction to restrain the
respondents from interfering with the importation by the appli
cant, from the Philippines into Canada, of certain men's fine
suits, jackets or blazers, or alternatively, an order for man-
damus directing them to issue import permits therefor, pursu
ant to their statutory duty to do so under the Export and
Import Permits Act. Applicant had complied with all the
procedural requirements for obtaining the permits necessary to
import its goods which were included in item 47 of the Import
Control List pursuant to the authority granted the Governor in
Council under section 5(2)(a) of the Act. At no time was the
importation of goods mentioned in item 47, in so far as any
order of the Governor in Council is concerned, made subject to
any limitation as to extent, quantity or time. The first question
which arises is whether, since there is no limitation of the
extent to which the goods will be restricted or any limitation as
to the period for which the limitation will be imposed, the
Governor in Council has failed to exercise the judgment and
control which Parliament might have directed him to exercise
under section 5(2) of the Act, and whether, as a result of such
failure, item 47 might have been improperly and illegally
included on the Import Control List, and therefore, not subject
to import control.
Held, the application is allowed and an injunction will issue.
Parliament has attempted to provide strict limitations on the
exercise of the power to legislate in the area that was delegated
to the Governor in Council. Any delegation by the Governor in
Council to the Minister of the legislative power to decide for
how long and to what extent importation of any goods must be
restricted and subject to control, is ultra vires and of no effect.
Even if one is not to conclude that there was any implicit
delegation of that power, there is, on the part of the Governor
in Council, a failure to properly include item 47 on the Import
Control List in accordance with the intent, purpose and express
direction of the enabling legislation. The item therefore must be
considered as not having been validly put on the List. There is
also on the part of the respondents, an improper assumption of
legislative authority which Parliament has delegated to the
Governor in Council and which the latter is not authorized to
delegate to any other authority. Once the Order in Council
under section 5(2) has established the quantity of goods which
may be imported or the method by which the quantities may be
calculated and also has determined the duration of the various
limitations or any conditions affecting limitations of imports for
the period in question, the Minister can then decide how many
items may be imported by the various importers within the
limits imposed by the Order in Council.
APPLICATION.
COUNSEL:
Y. A. George Hynna and Emilio S. Binavince
for applicant.
B. Bierbrier for respondents.
SOLICITORS:
Gowling & Henderson, Ottawa, for applicant.
Deputy Attorney General of Canada for
respondents.
The following are the reasons for order ren
dered in English by
ADDY J.: The applicant is an importer of suits
and other textiles. The respondents are all involved
in the granting of import permits. The present
application by way of originating notice of motion
is for an injunction to restrain the respondents
from interfering with the importation by the appli
cant, from the Philippines into Canada, of certain
men's fine suits, jackets and blazers or, alterna
tively, an order of mandamus directing them to
issue import permits therefor, pursuant to their
statutory duty to do so under the Export and
Import Permits Act'.
Injunctive relief must be sought by way of
action commenced in a normal manner by the
issuing of a statement of claim. A motion for an
interim or interlocutory injunction may of course
1 R.S.C. 1970, c. E-17, as amended.
be entertained before the action is heard. The
notice of motion may be served either at the same
time as or following the issuing of the statement of
claim. In cases of special urgency, a motion for
interim relief may be launched previous to the
instituting of the action but would normally only
be entertained when there is an undertaking by the
applicant to forthwith issue a statement of claim to
support the motion.
In the case at bar no action was instituted. No
objection to the proceeding was taken when the
motion was called. When the counsel for the appli
cant had completed his submissions on the request
for an injunction, the Court drew to the attention
of counsel for both parties the fact that no action
had been instituted whereupon counsel for the
respondents stated that, although he did not for
mally consent to it, he was not objecting to the
matter being heard on the merits and being finally
disposed of without an action being instituted.
Counsel for the applicant requested in the circum
stances, that the originating notice be considered a
statement of claim for the purpose of the injunc-
tive relief sought therein and that all pre-trial
proceedings be dispensed with and that the present
hearing be considered a trial on affidavit evidence
for final injunction as well as a motion for the
alternative relief of mandamus.
A similar motion had been launched between
the same parties a few weeks previously and had
been withdrawn after the matter had been settled,
before the application was actually heard. All of
the evidence on the previous motion including
cross-examinations on affidavits were used on the
present application. It was clear that no further
evidence, oral or otherwise, was required and that
the parties were content to have the matter heard
and finally disposed of on the affidavit evidence
and cross-examinations thereon already submitted.
Ample evidence had also been furnished as to the
urgency of having the matter heard forthwith in
view of contractual commitments of the applicant
with Simpsons-Sears who had undertaken to pur
chase the entire shipment. Another factor was the
question that the applicant is also seeking an order
of mandamus as alternative relief and that pro
ceedings for the obtaining of a writ or of an order
of mandamus, as in the case of certiorari, prohibi
tion and other remedies in the nature of preroga
tive writs, must be obtained through an application
to the Court initiated by means of an originating
notice of motion and not through an action com
menced by a statement of claim.
Under these special circumstances leave was
granted to proceed on the basis that this motion
would, for all intents and purposes, also be con
sidered a trial, in order to allow immediate and
final disposition of the question of whether an
injunction should be granted.
In allowing the matter to proceed as requested
by the applicant, I made it clear to counsel, how
ever, that this was not to be considered a precedent
to the effect that final injunctive relief is normally
to be granted by way of motion unsupported by an
action. The present method of proceeding should
not be adopted unless there exist very exceptional
circumstances and should not be followed where
there is formal objection thereto by a respondent,
as the latter is normally entitled to pleadings,
pre-trial discoveries and a trial on oral evidence
before the matter is finally disposed of.
The application relates to the refusal by the
respondents to issue an import permit for some
36,290 units of jackets, suits and blazers which the
applicant wishes to import into Canada from the
Philippines. These are the remainder of an original
order of some 41,330 units of which 5,040 have
already been allowed into the country by import
permits granted on the 15th of February 1979.
The Export and Import Permits Act provides
that a permit is required in order to be able to
import into Canada any goods included in a list
known as the "Import Control List" established in
accordance with the provisions of that Act. If
goods are not on the List, no permit is required but
only customs clearance, following payment of the
required duties. Customs will not clear goods,
however, which are on the Import Control List
until a permit has been obtained for them through
the respondents.
Although the evidence submitted was quite
voluminous, there are actually little or no conflict
ing facts. There were, however, some very serious
differences of opinion as to the interpretation that
one could put on the evidence submitted and espe
cially on the cross-examinations of the affiants.
All prescribed procedural requirements for the
obtaining of the permits had been complied with
by the applicant. It was common ground between
the parties that the units are described on the
Import Control List, [SOR/70-359 as amended by
SOR/79-380] under item 47 as follows:
47. Men's and boys' fine suits and jackets, including sports
coats and blazers whether fully or partially manufactured.
It was also common ground that item 47 was
purportedly included on the List pursuant to the
authority granted the Governor in Council under
section 5(2)(a) of the Act. Section 5(2) was enact
ed as an amendment to the Act in 1971 and is to
be found in R.S.C. 1970 (2nd Supp.), c. 32. It
reads as follows:
5....
(2) Where at any time it appears to the satisfaction of the
Governor in Council on a report of the Minister made pursuant
to
(a) an inquiry made by the Textile and Clothing Board with
respect to the importation of any textile and clothing goods
within the meaning of the Textile and Clothing Board Act,
or
(b) an inquiry made under section 16.1 of the Anti-dumping
Act by the Anti-dumping Tribunal in respect of any goods
other than textile and clothing goods within the meaning of
the Textile and Clothing Board Act
that goods of any kind are being imported or are likely to be
imported into Canada at such prices, in such quantities and
under such conditions as to cause or threaten serious injury to
Canadian producers of like or directly competitive goods, any
goods of the same kind may, by order of the Governor in
Council, be included on the Import Control List in order to
limit the importation of such goods to the extent and for the
period that, in the opinion of the Governor in Council, is
necessary to prevent or remedy the injury. [The underlining is
mine.]
The description of the items was changed by the
Governor in Council to some extent. The respond-
ents claim that these changes were made under the
authority of section 6 of the Act which reads as
follows:
6. The Governor in Council may revoke, amend, vary or
re-establish any Area Control List, Export Control List or
Import Control List.
As to the goods mentioned in item 47, it is clear
on the evidence that at no time was their importa
tion, in so far as any order of the Governor in
Council is concerned, made subject to any limita
tion as to extent, quantity or time. The first ques
tion which arises is therefore whether, since there
is no limitation of the extent to which the goods
will be restricted or any limitation as to the period
for which the limitation will be imposed, the Gov
ernor in Council has failed to exercise the judg
ment and control which Parliament might have
directed him to exercise under the above-men
tioned section 5(2) of the Act, and whether, as a
result of such failure, item 47 might have been
improperly and illegally included on the Import
Control List and, therefore, not subject to import
control. The applicant argues in other words that,
when an item is put on the List pursuant to section
5(2), it is absolutely essential that the order in
council state to what extent and for what time or
period the importation of the goods in that item is
to be limited and that, failing this, the item is to be
considered as if it had not been included on the
List, because the Governor in Council has not
properly limited the importation as required by
Parliament.
A history of the legislation is important. For
many years previous to the addition of section 5(2)
in 1971, the only purposes for which an import
control list could be created were those enumerat
ed in section 5 (now section 5(1)). The section
read as follows:
5. The Governor in Council may establish a list of goods, to
be called an Import Control List, including therein any article
the import of which he deems it necessary to control for any of
the following purposes, namely:
(a) to ensure, in accordance with the needs of Canada, the
best possible supply and distribution of an article that is
scarce in world markets or is subject to governmental con
trols in the countries of origin or to allocation by intergovern-
mental arrangement;
(b) to implement any action taken under the Agricultural
Stabilization Act, the Fisheries Prices Support Act, the
Agricultural Products Cooperative Marketing Act, the
Agricultural Products Board Act or the Canadian Dairy
Commission Act, to support the price of the article or that
has the effect of supporting the price of the article; or
(c) to implement an intergovernmental arrangement or
commitment;
and where any goods are included in the list for the purpose of
ensuring supply or distribution of goods subject to allocation by
intergovernmental arrangement or for the purpose of imple
menting an intergovernmental arrangement or commitment, a
statement of the effect or a summary of the arrangement or
commitment, if it has not previously been laid before Parlia
ment, shall be laid before Parliament at the time the order of
the Governor in Council including those goods in the list is laid
before Parliament pursuant to the Regulations Act.
It seems clear that the purposes were very
restricted and that, except for controlling goods
which were scarce on the world markets and thus,
presumably, in order to avoid some countries from
being unduly deprived of them (paragraph (a)
above), or for the purpose of protecting our food
supplies (paragraph (b) above), the List was to be
limited to goods where special intergovernmental
arrangements or commitments existed in order to
give effect to those commitments (refer para
graphs (a) and (c) above). In such last-mentioned
cases, however, the Governor in Council, at the
time the order in council is enacted, has to lay
before Parliament a statement of the effect of the
arrangements or a summary of the arrangements
or commitments. In such cases, the extent, dura
tion and purpose of the control would undoubtedly
be contained in the arrangements or commitments
and would be subject to the immediate scrutiny of
Parliament.
Although section 6, which I quoted previously,
existed at that time, it seems quite obvious that the
Governor in Council's power to amend, vary or
re-establish an import control list would be limited
to the purposes enumerated in section 5. In this
respect, it is interesting to note, although I do not
believe that anything actually turns on it, that the
expression "add to" is not included in the wording
of that section where powers to "revoke, amend,
vary or re-establish" a list are given.
When section 5(2), which I have quoted previ
ously, was added in 1971, power was given to
subject all goods to the provisions of the Act,
irrespective of whether any international arrange
ment existed or whether the goods were foodstuffs
and there is no requirement to submit any report
to Parliament on the items put on the List pursu
ant to that subsection. However, other control
provisions were inserted. In the first place, with
respect to textiles and clothing, items could be
included only after a report was made pursuant to
an inquiry made by the Textile and Clothing
Board (paragraph (a)) or, in the case of all other
goods, by the Anti-dumping Tribunal (paragraph
(b)). A requirement was also included to the effect
that the inquiries would have to conclude in their
report that the goods were being imported or likely
to be imported at prices or in quantities, or subject
to conditions which would threaten serious injury
to Canadian producers of like or directly competi
tive goods. In addition, the goods were to be
included only "to the extent and for the period
that, in the opinion of the Governor in Council, is
necessary to prevent or remedy the injury." Final
ly, the subsection grants the power to limit and not
the power to prohibit. In my view, a power to limit
necessarily implies a requirement to determine
what those limits are. The word "limit" or "limita-
tion," on the other hand, is not found in section
5(1). This section refers to controlling the importa
tion and it might well be argued that power to
control, unlike power to limit, may include a power
to prohibit.
Two inquiries were held by the Textile and
Clothing Board and interim and final reports were
issued as a result of both inquiries. It was first
recommended that structured suits from certain
specified countries (not including the Philippines)
would be restricted. When the Order in Council
was published it mentioned all men's structured
suits and there was no limitation as to country of
origin. The second report recommended, however,
that men's fine suits be restricted. Several objec
tions were raised as to the method in which the
inquiries were constituted, as to alleged improprie
ties in the notices, etc. I do not incline to the view
that the inquiries were improperly conducted to
the extent that they were illegal or ineffectual. In
any event, the validity of the inquiries is not
relevant to the immediate issue presently under
consideration. Assuming for the moment the valid
ity of the inquiries and of the conclusions in the
reports which followed, there is no indication
whatsoever that the Governor in Council in any
way considered and decided upon either the extent
to which the importation of the goods was to be
limited or the period of any limitation on
importation.
There is, on the other hand, ample evidence that
both these matters were left entirely and exclusive
ly to the Minister or his administrative officers,
among whom are the remainder of the respond
ents, to decide with regard to item 47 how many
units should be let into the country at any time as
well as from what countries of origin they should
be allowed in. There is no evidence whatsoever as
to the period of the limitation, that is, the length of
time during which it is anticipated that the goods
in item 47 are to remain on the List or as to any
term whatsoever imposed on the existence of those
goods on the List.
It appears clear on the facts, and I so find, that
the only thing which has been decided by the
Governor in Council is that the goods mentioned in
item 47 are to be on the Import Control List. All
other decisions relevant to the limitation of their
importation have been left to be taken by and
implemented by the Minister of Industry, Trade
and Commerce and the other respondents.
The Governor in Council was not obliged to
accept the Board's recommendations following the
two inquiries. But to say, as the counsel for the
respondents does, that from the mere fact that no
limit as to duration has been mentioned in the
Order in Council, one is to imply that the Gover
nor in Council in fact exercised his discretion in
favour of the restriction being imposed for an
indefinite period, is a completely unacceptable
argument: it flies in the face of all of the evidence
as to how the List is in fact being administered.
Furthermore, if failure to specify a time restriction
means an indefinite period, then, failure to specify
the extent means either an indefinite extent or
amount or an absolute prohibition. Either of these
two interpretations would directly contradict the
express wording of the last paragraph of section
5(2).
Finally, where a statute restricts a basic right
recognized by common law and is capable of two
interpretations, the strict interpretation, that is, an
interpretation against the restriction and in favour
of the citizen must be given the statute. Since such
a rule of interpretation is used against enactments
by Parliament, it must apply a fortiori against
legislative enactments of the Governor in Council,
which complete restrictive legislation.
Orders in council issued pursuant to the Export
and Import Permits Act are capable of greatly
restricting and limiting the fundamental right of
every citizen to fully engage in legitimate trade
and business as he may deem fit. Its application in
many cases might well remove from an importer,
his sole means of livelihood or cause him very
considerable losses.
Unlike some legislation such as customs and
excise which is intended to provide a more perma
nent type of protection for local industries and
producers, the Export and Import Permits Act,
from its tenor, obviously appears to be legislation
enacted to permit controls for a limited time and
for specific and very limited purposes and by
reason of the existence of certain special circum
stances and conditions or international commit
ments or undertakings which outweigh the rights
of certain citizens to trade as they wish. Notwith
standing its effect, which is potentially highly re
strictive, Parliament has chosen to delegate to the
Governor in Council power to legislate in this area
by enacting section 5, because of the time ordinar
ily required to enact detailed regulatory legislation
in both Houses of Parliament and because of
constantly changing international arrangements
and commitments and continually shifting condi
tions of the international market and of Canadian
production and markets. Parliament, however, has
also attempted to provide the strict limitations to
which I have already referred, on the exercise of
that power. Any delegation by the Governor in
Council to the Minister of the legislative power to
decide for how long and to what extent importa
tion of any goods must be restricted and subject to
control, is ultra vires and of no effect. There is
evidence on which one could conclude that there
has been implicit if not explicit delegation, because
of the complete silence of the Orders in Council as
to the above-mentioned matters and of the actions
and decisions of the Minister and the other
respondents in those areas specifically reserved to
the Governor in Council by the legislation. In any
event, even if one is not to conclude that there was
implicit delegation of that power, there is, on the
part of the Governor in Council, a failure to
properly include item 47 on the Import Control
List in accordance with the intent, purpose and
express direction of the enabling legislation. The
item must therefore be considered as not having
been validly put on the List. There is also on the
part of the respondents, an improper assumption of
legislative authority which Parliament has delegat
ed to the Governor in Council and which the latter
is not authorized to delegate to any other author
ity. (Ref. as to ultra vires delegation of powers see:
Attorney General of Canada v. Brent 2 ; City of
Verdun v. Sun Oil Company Ltd. 3 ; Brant Dairy
Company Limited v. The Milk Commission of
Ontario 4 .)
Once the Order in Council under section 5(2)
has established the quantity of goods which may
be imported or the method by which the quantities
may be calculated and has also determined the
duration of the various limitations or any other
conditions affecting limitations of imports for the
period in question, then, of course the Minister can
decide how many items may be imported by the
various importers from time to time, within the
limits imposed by the Order in Council. His au
thority for doing this is contained in section 8 of
the Act. But section 8 must be read subject to
those very important qualifications.
Section 6, to which I have referred previously in
discussing section 5 before subsection (2) thereof
was added, is of no avail to the respondents: the
power to "revoke, amend, vary or re-establish any
... Import Control List" must necessarily be exer
cised on a list properly established within the
meaning of either subsection (1) or (2) of section
2 [ 1956] S.C.R. 318.
3 [1952] 1 S.C.R. 222.
4 [1973] S.C.R. 131.
5. The power granted by section 6 must be con
sidered in the light of the very specific limitations
mentioned in section 5. If section 6 does give the
Governor in Council power to "add" goods to the
List (a question which it is not necessary for me to
decide) it does not in any event give authority to
add goods under section 5(2) without at the same
time specifying the limitations mentioned therein
and which are made an express condition of the
exercise of that delegated legislative authority.
Had the Governor in Council exercised the
power and the discretion vested in him by Parlia
ment under the Act, I agree fully with the
respondents that his judgment could not be ques
tioned by the Courts except possibly in a very
exceptional and unequivocally clear case where the
will of Parliament is obviously being ignored or
frustrated. (See: Reference Re Regulations
(Chemicals) under War Measures Acts; Attorney-
General of Canada v. Nolan 6 ; and Regina v.
Behm 7 .)
The respondents referred to the decision of my
brother Marceau J. in the unreported case of
Chadon Manufacturing Ltd. v. Collector of Cus
toms (Montreal) 8 . Although this case dealt with
the Export and Import Permits Act in so far as it
affects the Customs Act, R.S.C. 1970, c. C-40, it
appears obvious that the questions as to whether
the Import List was validly created pursuant to
section 5(2) or whether there was an ultra vires
delegation of powers to the Minister were never
raised in that case. It therefore can be of little
practical assistance in determining those specific
issues which have been raised before me.
Since I find in effect that item 47 has not been
validly included on the Import Control List
according to law, it follows that no import licences
are required for the goods in question and no
statutory duty exists to issue licences for their
importation. The proper remedy is therefore an
5 [1943] S.C.R. 1 at page 12.
6 [1952] 3 D.L.R. 433.
7 [1970] 5 C.C.C. 177.
8 Reasons dated the 27th of October, 1976—Federal Court
File No. T-4108-76.
injunction in order to restrain the respondents
from preventing the importation and not a manda
tory order against them to issue licences.
Irreparable harm has been amply established
because the goods have already been purchased by
the applicant who in turn has contracted to deliver
them immediately to Simpsons-Sears and also
because of the short season during which such
garments are in demand by the public. An injunc
tion will therefore issue. There can be no question
of balance of convenience, as the respondents in
the circumstances have no legal rights to enforce
either in a personal or in a representative capacity.
In view of my disposition of the case on the
grounds already mentioned, I have not dealt with
the several other arguments advanced by counsel
for the applicant on both issues.
The case is undoubtedly a very important one
for the respondents and for the country at large, in
view of the fact that the validity of the inclusion on
the Import Control List of all items inserted there
under the purported authority of section 5(2)
might well be in question, with a resulting serious
impact on many domestic producers and manufac
turers. Both parties in fact indicated at the hearing
that they would appeal if unsuccessful. In order to
prevent any appeal by the respondents from being
frustrated by the issuing of an injunction which
would take effect immediately and thus oblige the
respondents to release the items forthwith and
having regard to the intervening Easter weekend,
the formal order will provide that the injunction
will take effect only from noon on Tuesday the
17th of April 1979, in order to allow them suffi
cient time to make any application to the Court
which they may deem advisable for a stay of
execution of the injunction or otherwise.
Costs will follow the event.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.