A-1134-82
The Queen (Appellant)
v.
Brian L. Aimonetti (Respondent)
Court of Appeal, Heald, Mahoney and Stone
JJ.—Winnipeg, May 29; Ottawa, June 7, 1985.
Estoppel — Money seized in narcotics search — Application
for order of restoration dismissed by Provincial Court Judge
— Action instituted in Federal Court for equivalent sum plus
interest — Trial Judge holding plaintiff not estopped by
Provincial Court ruling — Here, as in Provincial Court, real
issue right to possession of money — Said right conclusively
determined in Provincial Court, therefore issue res judicata —
Narcotic Control Act, R.S.C. 1970, c. N-1, s. 10(1)(c),(5),
(6),(7)—Federal Court Rules, C.R.C., c. 663, R. 474(1)(a).
In the course of a search of the respondent's residence for
narcotics, police seized the sum of $23,440 under the authority
of the Narcotic Control Act. An application for its restoration
under subsection 10(5) of the Act was dismissed by a Manitoba
Provincial Court Judge and the money was accordingly deliv
ered to the Minister of National Health and Welfare pursuant
to subsection 10(7). The respondent's attempts to get the
money back by way of certiorari were unsuccessful in both the
Court of Queen's Bench and the Court of Appeal, and leave to
appeal to the Supreme Court of Canada was refused. When the
respondent commenced an action in this Court for an equiva
lent sum of money plus interest, the appellant applied, under
Rule 474(1)(a), for a preliminary determination of two ques
tions of law. The first, as to the jurisdiction of this Court, is not
in issue. The second is as to whether the respondent is estopped
from seeking the return of his money on the ground that the
issue has been decided by the provincial judge and is therefore
res judicata. The Trial Judge gave a negative answer on the
basis that the issue before him was ownership of and title to the
money whereas the issue before the provincial judge was the
right to possession of the money. This is an appeal from that
decision.
Held, the appeal should be allowed and the question
answered in the affirmative.
Even though the effect of delivery of the thing seized to the
Minister as provided in subsection 10(7) was considered in
Smith v. The Queen, the issue of res judicata did not arise
therein because the plaintiff had not sought a restoration order
under subsection 10(5).
The Trial Judge erred in his approach to the question. The
issues in this proceeding are not factual. The respondent is not
entitled to proceed to trial simply to have disputed questions of
fact resolved if the relief he claims is not, in law, available to
him. In the present instance, the respondent's ownership of the
money is to be presumed; the real issue is not its ownership but
the right to its possession. The appellant might have pleaded
cause of action estoppel. The right asserted in the application
for restoration is not different from the right asserted in the
statement of claim here. There is no valid distinction to be seen
in the fact that in this case, what is sought is an equivalent sum
of money plus interest.
In any event, an issue estoppel is clearly established. The
refusal of a restoration order, taken with the consequences
prescribed by subsection 10(7), determine conclusively the issue
of the right to possession of a thing lawfully seized under
paragraph 10(1)(c). That determination is neither collateral
nor incidental to the refusal but the direct legal result of it. The
refusal was a judicial decision, competently made and final, and
the parties to the proceeding were the same as here.
CASES JUDICIALLY CONSIDERED
APPLIED:
Angle v. M.N.R., [ 1975] 2 S.C.R. 248.
DISTINGUISHED:
Smith v. The Queen, [1976] 1 F.C. 196 (T.D.), con
firmed by judgment dated September 8, 1976, Federal
Court, Appeal Division, A-580-75.
REFERRED TO:
R. v. Aimonetti (1981), 8 Man. R. (2d) 271 (C.A.), leave
to appeal to the Supreme Court of Canada refused at
[1981] 1 S.C.R. v.
COUNSEL:
Harry Glinter for appellant.
Martin S. Corne, Q.C. for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Corne & Corne, Winnipeg, for respondent.
The following are the reasons for judgment
rendered in English by
MAHONEY J.: This is an appeal from the Trial
Division. It has been conducted under the style of
cause:
BETWEEN
BRIAN L. AIMONETTI
Plaintiff
—and—
HER MAJESTY THE QUEEN
Defendant
Such a style of cause does not properly identify the
parties to an appeal. I would order, nunc pro tunc,
that the style of cause be amended to that appear
ing on these reasons for judgment.
The pertinent underlying facts are not in dispute
and are fully set out in the reasons for judgment of
the learned Trial Judge which is reported at
[1983] 2 F.C. 282. Coincident with his arrest, a
sum of money, which the respondent claims to
own, was seized under authority of paragraph
10(1)(c) of the Narcotic Control Act, R.S.C.
1970, c. N-1. He applied for its restoration under
subsection 10(5) and a provincial judge refused an
order of restoration. The money was accordingly
delivered to the Minister of National Health and
Welfare pursuant to subsection 10(7). No appeal
lies from a decision on an application under sub
section 10(5). The respondent attacked the deci
sion by way of certiorari in the Manitoba Court of
Queen's Bench. An appeal from the refusal of
certiorari was unsuccessful, R. v. Aimonetti
(1981), 8 Man. R. (2d) 271 (C.A.), and leave to
appeal to the Supreme Court of Canada was
refused [[1981] 1 S.C.R. v].
The respondent then commenced an action in
this Court seeking the following relief:
(a) Judgment against the Defendant in the sum of
$23,440.00;
(b) Interest on the said sum of $23,440.00 until the date of
payment;
(c) Costs of this action;
(d) Such further and other relief as This Honourable Court
may deem meet.
The appellant applied, under Rule 474(1)(a)
[Federal Court Rules, C.R.C., c. 663], for a pre
liminary determination of the following questions
of law:
1. Does the Federal Court of Canada have the jurisdiction to
order the return of the monies in issue in this action where in a
previous application for restoration, pursuant to Section 10(5)
of the Narcotic Control Act, Revised Statutes of Canada, 1970,
Chapter N-1, the presiding Provincial Judge held that the
Plaintiff was not entitled to possession of the said monies; or
2. In the alternative, is the Plaintiff estopped in this action from
seeking an order for the return of the said monies on the ground
that the issue has already been determined by the presiding
Provincial Judge, pursuant to Section 10(5) of the Narcotic
Control Act, Revised Statutes of Canada, 1970, Chapter N-1,
and the issue is therefore res judicata.
The learned Trial Judge answered the first ques
tion in the affirmative and the second in the
negative. This appeal was taken only in respect of
the negative answer to the second question.
The pertinent provisions of the Narcotic Control
Act are:
10. (1) A peace officer may, at any time,
(c) seize and take away any narcotic found in such place, any
thing in such place in which he reasonably suspects a narcot
ic is contained or concealed, or any other thing by means of
or in respect of which he reasonably believes an offence
under this Act has been committed or that may be evidence
of the commission of such an offence.
(5) Where a narcotic or other thing has been seized under
subsection (1), any person may, within two months from the
date of such seizure, upon prior notification having been given
to the Crown in the manner prescribed by the regulations,
apply to a magistrate within whose territorial jurisdiction the
seizure was made for an order of restoration under subsection
(6).
(6) Subject to subsections (8) and (9), where upon the
hearing of an application made under subsection (5) the magis
trate is satisfied
(a) that the applicant is entitled to possession of the narcotic
or other thing seized, and
(b) that the thing so seized is not or will not be required as
evidence in any proceedings in respect of an offence under
this Act,
he shall order that the thing so seized be restored forthwith to
the applicant, and where the magistrate is satisfied that the
applicant is entitled to possession of the thing so seized but is
not satisfied as to the matters mentioned in paragraph (b), he
shall order that the thing so seized be restored to the applicant
(c) upon the expiration of four months from the date of the
seizure, if no proceedings in respect of an offence under this
Act have been commenced before that time, or
(d) upon the final conclusion of any such proceedings, in any
other case.
(7) Where no application has been made for the return of
any narcotic or other thing seized under subsection (1) within
two months from the date of such seizure, or an application
therefor has been made but upon the hearing thereof no order
of restoration is made, the thing so seized shall be delivered to
the Minister who may make such disposition thereof as he
thinks fit.
The effect of delivery of the thing seized to the
Minister as provided by subsection 10(7) was con
sidered in Smith v. The Queen, [1976] 1 F.C. 196,
a decision of Mr. Justice Addy of the Trial Divi
sion, the appeal from which was dismissed without
reasons in an unreported decision of this Court,
file A-580-75, rendered September 8, 1976. It was
held that the Minister's power to dispose of the
thing seized was merely custodial and did not
decide any question of title to the thing. Subsec
tion 10(7), accordingly, was held not to constitute
a procedural bar to a right of action to recover the
thing. The jurisdiction to entertain that action lies
in this Court. The issue of res judicata did not
arise in the Smith case because the plaintiff there
had not sought a restoration order under subsec
tion 10(5) of the Act. I take "custodial" in this
context to include the right to possession or to
control the possession of the thing seized and
delivered.
In answering the second question, the learned
Trial Judge, at page 299 [Aimonetti v. The Queen
(supra)], concluded:
The issue in the within action is plaintiff's claim that he is
the owner of and has title to the monies and that the Minister's
power is merely custodial and not a power to decide any
question of title to property. It becomes clear that the issue in
the proceedings before Kopstein P.C.J. and the issue in the
statement of claim are separate and distinct and, accordingly,
estoppel or res judicata do not apply. Question 2, asked in the
alternative in the within motion, is answered in the negative.
Not all of the facts alleged in the statement of
claim are admitted. Among those disputed is the
respondent's claim to own the money.
In my respectful opinion, the learned Trial
Judge erred in his approach to the second question.
The issues to be determined in this proceeding are
not factual but, as defined by the questions, relate
exlusively to the relief claimed. The relief sought is
not a declaration. The respondent is not entitled to
proceed to trial simply to have disputed questions
of fact resolved if the relief he claims is not, in law,
available to him. I take it that a person who is not
legally entitled to possession of a sum of money
which he owns is not, in law, entitled to a judg
ment directing that it be paid to him by the person
who is legally entitled to its possession. For pur
poses of a proceeding under Rule 474(1)(a), it is
to be assumed that the facts pleaded, upon which
the question of law to be determined is predicated,
are true and would be so found in the event of a
trial notwithstanding that they are denied or not
admitted.
In the present instance, the respondent's owner
ship of the money is to be assumed; the real issue
in the action is not its ownership but the right to
its possession. What we must decide is whether the
respondent's right to possession of the money has
been conclusively determined in the restoration
proceedings so as to bar the respondent from
asking this Court to arrive at a different result.
In Angle v. M.N.R., [1975] 2 S.C.R. 248, at
pages 253 ff., Dickson J., as he then was, speaking
for the majority of the Supreme Court, canvassed
the subject of res judicata as follows:
In earlier times res judicata in its operation as estoppel was
referred to as estoppel by record, that is to say, estoppel by the
written record of a court of record, but now the generic term
more frequently found is estoppel per rem judicatam. This
form of estoppel, as Diplock L.J. said in Thoday v. Thoday
([1964] P. 181), at p. 198, has two species. The first, "cause of
action estoppel", precludes a person from bringing an action
against another when the same cause of action has been
determined in earlier proceedings by a court of competent
jurisdiction....The second species of estoppel per rem judica-
tam is known as "issue estoppel", a phrase coined by Higgins J.
of the High Court of Australia in Hoystead v. Federal Com
missioner of Taxation ((1921), 29 C.L.R. 537), at p. 561:
I fully recognize the distinction between the doctrine of res
judicata where another action is brought for the same cause
of action as has been the subject of previous adjudication,
and the doctrine of estoppel where, the cause of action being
different, some point or issue of fact has already been
decided (I may call it "issue-estoppel").
Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd.
(No. 2) ([1967] 1 A.C. 853), at p. 935, defined the require
ments of issue estoppel as:
... (1) that the same question has been decided; (2) that the
judicial decision which is said to create the estoppel was
final; and, (3) that the parties to the judicial decision or their
privies were the same persons as the parties to the proceed
ings in which the estoppel is raised or their privies ....
Is the question to be decided in these proceedings, namely the
indebtedness of Mrs. Angle to Transworld Explorations Lim
ited, the same as was contested in the earlier proceedings? If it
is not, there is no estoppel. It will not suffice if the question
arose collaterally or incidentally in the earlier proceedings or is
one which must be inferred by argument from the judgment.
That is plain from the words of De Grey C.J. in the Duchess of
Kingston's case ((1776), 20 St. Tr. 355, 538n), quoted by Lord
Selborne L.J. in R. v. Hutchings ((1881), 6 Q.B.D. 300), at p.
304, and by Lord Radcliffe in Society of Medical Officers of
Health v. Hope ([1960] A.C. 551). The question out of which
the estoppel is said to arise must have been "fundamental to the
decision arrived at" in the earlier proceedings: per Lord Shaw
in Hoystead v. Commissioner of Taxation ([1926] A.C. 155).
The authors of Spencer Bower and Turner, Doctrine of Res
Judicata, 2nd ed. pp. 181, 182, quoted by Megarry J. in Spens
v. I.R.C. ([1970] 3A11. E.R. 295), at p. 301, set forth in these
words the nature of the enquiry which must be made:
... whether the determination on which it is sought to found
the estoppel is "so fundamental" to the substantive decision
that the latter cannot stand without the former. Nothing less
than this will do.
The appellant's counsel did not take the position
that the estoppel here was a cause of action estop-
pel. I think he might have. I do not see that the
right asserted in the application for a restoration
order under subsection 10(5) is any different than
the right asserted in the statement of claim here.
In both proceedings, the respondent has sought
only to be put in possession of the same thing. I see
no valid distinction in the fact that the thing
actually seized, i.e., the identical notes and coins,
might have been returned to him had a restoration
order been granted whereas in this proceeding
what is sought is an equivalent sum of money plus
interest.
In any event, an issue estoppel is clearly estab
lished. The refusal of a restoration order, taken
with the consequences of that refusal prescribed by
subsection 10(7) that "the thing so seized shall be
delivered to the Minister who may make such
disposition thereof as he thinks fit" seems to me to
determine conclusively the issue of the right to
possession of a thing lawfully seized under para
graph 10(1)(c). The determination of the right to
possession of the thing is neither collateral nor
incidental to the making or refusal of a restoration
order but the direct legal result of it. The refusal
was a judicial decision, competently made and
final, and the parties to the proceeding were the
same as here.
In my opinion, the learned Trial Judge erred in
answering the second question in the negative. I
would allow the appeal with costs and would
answer the second question, as well as the first, in
the affirmative.
HEALD J.: I concur.
STONE J.: I agree.
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.