Supreme Court of Canada
Fee et al. v. Bradshaw et al., 1982 CanLII 177 (SCC), [1982] 1 SCR 609
Harvey Fee and Affiliated Offices Ltd. Appellants;
and
M.J. Bradshaw, H.O. Merret, R.W. Arbuckle, H.E. Garland, S.F. Hobart, J.S. Hodgson and Bud Cullen Respondents.
1982: March 2; 1982: May 10.
Present: Laskin C.J. and Dickson, Beetz, Estey, Mclntyre, Chouinard and Lamer JJ.
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Taxation—Income tax—Offences—Limitation of prosecutions—Minister’s certificate—Injunction to prohibit filing certificate as evidence—Injunction denied—Income Tax Act, 1970‑71-72 (Can.), c. 63, s. 244(4)—Federal Court Act, R.S.C. 1970 (2nd Supp), c. 10, ss. 2, 18.
Injunction—Income tax—Offences—Injunction to prohibit filing Minister’s certificate as evidence—Jurisdiction of Federal Court Trial Division—Injunction denied—No remedy under s. 18 of Federal Court Act—Federal Court Act, R.S.C 1970 (2nd Supp.), c. 10, ss. 2, 18—Income Tax Act, 1970-71-72 (Can.), c. 63, s. 244(4).
Appellants filed in the Trial Division of the Federal Court an application for an injunction to prohibit respondents from filing as evidence at the trial of appellants in the Court of Sessions of the Peace the certificate of the Minister of National Revenue provided for by s. 244(4) of the Income Tax Act. Appellants argued that the date given in the certificate as that on which evidence sufficient to justify the prosecution came to the Minister’s knowledge was inaccurate. The application was dismissed, as was the appeal by appellants to the Federal Court of Appeal.
Held: The appeal should be dismissed.
The jurisdiction of the Trial Division of the Federal Court under s. 18 of the Federal Court Act extends to “any federal board, commission or other tribunal”. The filing of a certificate stating the date on which evidence came to the Minister’s knowledge does not constitute, either in the fact of filing the certificate or in the statement which it contains, an administrative decision or the exercise of a discretionary power by the Minister
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so as to make the definition of the words “board, commission or other tribunal” in s. 2 of the Act applicable to him. The application for an injunction is accordingly dismissed, as in the case at bar there is no remedy under s. 18.
Sharp v. Wakefield, [1891] A.C. 173; Roncarelli v. Duplessis, 1959 CanLII 50 (SCC), [1959] S.C.R. 121; City of Hamilton v. Hamilton Harbour Commissioners (1972), 1972 CanLII 711 (ON CA), 27 D.L.R. (3d) 385; B. v. Department of Manpower and Immigration, [1975] F.C. 602, referred to.
APPEAL from a judgment of the Federal Court of Appeal affirming a judgment of the Trial Division, 76 DTC 6279, denying an injunction. Appeal dismissed.
Pierre Fournier and Gérald Dugré, for the appellants.
Jacques Ouellet, Q.C., for the respondents.
English version of the judgment of the Court delivered by
Background
CHOUINARD J.—Appellants’ action was dismissed by the Trial Division of the Federal Court and the Federal Court of Appeal; they are asking this Court to issue an injunction [TRANSLATION] “against respondents to prohibit the filing in the Court of Sessions of the Peace in the matter between appellants and Her Majesty of any certificate, or alleged certificate, of the Minister pursuant to s. 244(4) of the Income Tax Act”, 1970-71-72 (Can.), c. 63.
Respondents are the Minister of National Revenue at the time, Mr. Bud Cullen, and employees in his department. No distinction between them is necessary for the purposes of this appeal.
Statutory Provisions
Section 244(4) of the Income Tax Act (supra) reads:
(4) An information or complaint under the provisions of the Criminal Code relating to summary convictions, in respect of an offence under this Act, may be laid or made on or before a day 5 years from the time when the matter of the information or complaint arose or within one year from the day on which evidence, sufficient in the opinion of the Minister to justify a prosecution for the offence, came to his knowledge, and the Minister’s certificate as to the day on which such evidence came to his knowledge is conclusive evidence thereof.
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This section provides in cases of a proceeding on summary conviction for two possible periods of prescription, namely five years from the time when the matter of the information or complaint arose, or one year from the day on which evidence sufficient to justify a prosecution came to the Minister’s knowledge. There is no such prescription in the case of a prosecution on indictment. In the case at bar, however, since the proceeding was by summary conviction, the section is of great importance to appellants. The acts charged go back in one case to 1968 and in the other case fall between 1963 and 1971, whereas the informations are dated November 3, 1975. The first information, which comprises two counts against appellant Fee, reads:
On or about April 30, 1968, made a false or deceptive statement in his return of income for the 1967 taxation year pursuant to the Income Tax Act, R.S.C. 1952, ch. 148, by omitting to declare income in the said return for a sum of $55,170.37 for the said taxation year, committing an offence contrary to the provisions of Section 239(1)(a) of the Income Tax Act;
On or about April 30, 1968, did wilfully evade the payment of taxes imposed by the Income Tax Act, R.S.C. 1952, ch. 148, for the 1967 taxation year, by omitting to declare income in his return of the said, taxation year in the sum of $55,170.37, thereby evading the payment of taxes of an amount of $16,731.78, committing an offence contrary to Section 239(1)(d) of the Income Tax Act.
The second information applicable to the two appellants is worded as follows:
Between May 1st, 1963 and June 25, 1971, did wilfully evade the payment of taxes imposed by the Income Tax Act, R.S.C. 1952, ch. 148, for the taxation years 1964 to 1971 inclusively, by omitting to declare in the returns of income of Affiliated Offices Ltd., for the said taxation years, a total income of $132,071.00, thereby evading the payment of taxes in the amount of $46,665.00, committing an offence contrary to Section 239(1)(d) of the Income Tax Act.
It will be seen that if the five-year prescription applies, the first information is clearly prescribed and the second is prescribed for acts prior to November 3, 1970. This is where the certificate
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that the evidence came to the Minister’s knowledge on May 6, 1975 becomes important, as it excludes all prescription in both cases.
According to appellants the date of May 6, 1975 is incorrect and the evidence came to the Minister’s knowledge about two years before this date, and in fact much earlier if the knowledge of his employees can be attributed to the Minister.
Assuming that the certificate cannot be challenged in the Court of Sessions of the Peace, since under s. 244(4) it “is conclusive evidence thereof”, and further assuming that there can be no recourse to the Federal Court of Appeal under s. 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, because it does not concern “a decision or order, other than a decision or order of an administrative nature not required by law to be made on a judicial or quasi-judicial basis”, appellants applied to the Trial Division of the Federal Court for an injunction as stated above to prohibit respondents from filing the certificate in the Court of Sessions of the Peace.
Judicial History
Marceau J. of the Trial Division of the Federal Court dismissed the application of appellants as follows, and I quote:
Apart from the question of whether, on the one hand, an injunction against the Minister is possible in the circumstances, and on the other hand, whether an order of the kind desired would achieve the intended purpose, I am of the opinion that this Court does not now have the power to verify the truth of the facts attested to in the certificate, any more than the Court of Sessions of the Peace will have at the time when it is produced. Moreover, if it were possible to challenge the contents of such a certificate, such a challenge should be made in the Court of Sessions of the Peace, because its sole aim would be to make use of a defence against the charge, namely that of prescription. The application for an injunction is accordingly dismissed with costs.
The appeal to the Federal Court of Appeal was dismissed for the following reason:
Even if it is assumed that the Trial Division had the power to review the accuracy of the certificate of the Minister in this case, we are of the view that the
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appellant’s application had nevertheless to be dismissed since it is clear, in our opinion, that section 244(4) of the Income Tax Act refers to the personal knowledge of the Minister and not to the knowledge of the officers of his department1.
Issues
In this Court appellants raised a number of arguments which were conveniently summarized by counsel for the respondents as follows:
[TRANSLATION]
(1) Do the provisions of s. 244(4) of the Income Tax Act that “the Minister’s certificate as to the day on which such evidence came to his knowledge is conclusive evidence thereof” have the effect of divesting the courts of the power to hear evidence to the contrary, and if necessary, to rule that the date stated therein is incorrect?
(2) In the event that the Court decides that the words in question do have the effect of divesting the courts of the aforementioned power, does it follow that the section in question is incompatible with the provisions of ss. 1(b) or 2(e) of the Canadian Bill of Rights?
(3) In the event that the Court finds that s. 244(4) does not have the effect of divesting an accused person of the right to dispute the accuracy of the facts stated in the Minister’s certificate, is any such challenge exclusively a matter for the Court having jurisdiction over the charges laid against the accused?
(4) In the event that this is not the case, does s. 18 of the Federal Court Act give that Court the necessary jurisdiction to issue the type of injunction desired by appellants?
(5) If an affirmative answer is given to question No. 4, do the facts alleged in the application for an injunction justify the arguments presented by appellants as to the so‑called inaccuracy of the date on which evidence sufficient to justify the prosecutions laid against them came to the knowledge of the Minister of National Revenue?
Analysis
In my opinion, before considering any other argument the Court must dispose of No. 4, which is concerned with the very existence in the case at bar of the remedy sought, as this will be conclusive in the event of a negative answer. In this regard I
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am in agreement with the observations of counsel for the appellants in his submission:
[TRANSLATION] Section I—The first question that arises is as to the jurisdiction of the Trial Division of the Federal Court, even assuming that appellants were correct in maintaining that the certificate (Exhibit P-2) constitutes a fraud and an abuse of power, and that s. 244(4) either does not apply in view of the 1960 Canadian Bill of Rights, or must be interpreted as limiting the scope of the words “conclusive evidence” to the trial level court in which appellants are charged, namely to the Court of Sessions of the Peace.
Section 18 of the Federal Court Act reads:
- The Trial Division has exclusive original jurisdiction
(a) to issue an injunction, writ of certiorari, writ of prohibition, writ of mandamus or writ of quo warranto, or grant declaratory relief, against any federal board, commission or other tribunal; and
(b) to hear and determine any application or other proceeding for relief in the nature of relief contemplated by paragraph (a), including any proceeding brought against the Attorney General of Canada, to obtain relief against a federal board, commission or other tribunal.
The words “federal board, commission or other tribunal” are defined in s. 2 of the said Act:
“federal board, commission or other tribunal” means any body or any person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under an Act of the Parliament of Canada, other than any such body constituted or established by or under a law of a province or any such person or persons appointed under or in accordance with a law of a province or under section 96 of The British North America Act, 1867;
Appellants based two arguments on s. 18.
Their first argument is as follows:
[TRANSLATION] First, that by giving the Trial Division of the Federal Court the superintending and reforming power over federal agencies which traditionally belonged to the superior courts of the various provinces, the federal Parliament has placed before the Federal Court
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the precedents relating to abuse of power, even where a discretionary power is concerned,…
In support of this first argument, appellants cited the following passage from Mr. René Dussault in his Traité de droit administratif canadien et québécois, 1974, vol. II, at pp. 1414 and 1415:
[TRANSLATION] When a public officer or agency in exercising discretionary powers acts arbitrarily, unfairly or with discrimination toward a person or particular group of persons, or when the action in question appears to be manifestly unreasonable, the courts do not hesitate to intervene to rectify such abuses.
…the criteria for intervening are closely bound up with the concept of ultra vires. Though not synonymous they are nonetheless generally used in concert by the courts to demonstrate that there was in a particular case a serious abuse of discretion which makes the act or decision of the agency ultra vires.
Appellants further cited with regard to the exercise of a discretionary power the following dictum of Lord Halsbury, in Sharp v. Wakefield, [1891] A.C. 173, at p. 179:
It is to be, not arbitrary, vague and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man, competent to the discharge of his office ought to confine himself.
Appellants further referred to Roncarelli v. Duplessis, 1959 CanLII 50 (SCC), [1959] S.C.R. 121, and the article by Stuart Thorn, Q.C., “Abuse of Power by the Department of National Revenue and the Role of an Independent Judicial System in its Regulation and Control”, in Special Lectures of the Law Society of Upper Canada, 1979, at p. 531.
The second argument is as follows:
[TRANSLATION] …as the jurisdiction given to the Federal Court of Appeal under s. 28(1) is in substance, though not in name, the same jurisdiction formerly exercised by the superior court through the prerogative writ, but circumscribed by the inclusion of the words “other than a decision or order of an administrative nature not required by law to be made on a judicial or quasi-judicial basis”, s. 18 must be given a wider meaning, to include review of administrative decisions which are not of a judicial or quasi-judicial nature.
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They cited in support the following passage from Professor Henri Brun in an article titled “La Mort de la “Discrétion Administrative””, (1974), 52 Can. Bar. Rev. 426, at p. 429:
[TRANSLATION] Review of decisions of a judicial nature is to be exclusively a matter for the Federal Court of Appeal. It is to be provided using a new procedure, which is undoubtedly intended to replace all the prerogative writs formerly used for this purpose. On the other hand, review of decisions of an administrative nature is a matter for the Trial Division of the Federal Court, as probably is also any review that operates ab initio. This review is intended to apply through the traditional writs.
Appellants further referred to the decision of the Court of Appeal of Ontario in City of Hamilton v. Hamilton Harbour Commissioners (1972), 1972 CanLII 711 (ON CA), 27 D.L.R. (3d) 385, and the judgment of the Trial Division of the Federal Court in B. v. Department of Manpower and Immigration, [1975] F.C. 602.
Is the decision before the Court an administrative decision or the exercise of a discretionary power, to use the expressions employed by appellants and by the writers cited?—for that is what s. 18 is applicable to. The jurisdiction of the Trial Division of the Federal Court under that section extends to “any federal board, commission or other tribunal”, that is, to “any body or any person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under an Act of the Parliament of Canada”.
Only to the extent that he makes an administrative decision or exercises a discretionary power could it be argued that the Minister of National Revenue is included in the definition of the words “board, commission or other tribunal” as a person having jurisdiction or powers conferred by or under an Act of the Parliament of Canada, and consequently, that he may be subject to the superintending and reforming power of the Trial Division. What is the situation in the case at bar?
In order to answer the question presented we must look at the act of the Minister, which
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allegedly constituted an administrative decision or the exercise of an administrative power by him. Is that act the statement itself, contained in the certificate, as to the day when the evidence came to the Minister’s knowledge, or is it the act of filing the certificate in the Court of Sessions of the Peace? The statement by appellants in their submission that [TRANSLATION] “the purpose …is to prevent the use of a forgery” leads me to think that the second alternative is applicable. I shall nonetheless consider both possibilities.
With regard to the first alternative, the statement as to the day on which the evidence came to the Minister’s knowledge cannot in any way be likened, in my opinion, to an administrative decision or the exercise of a discretionary power. The Minister is not taking a decision and he is not exercising a discretionary power. So far as he is concerned he is testifying as to a fact. He does not have to take any position favouring one course of conduct over another. He does not have to exercise any discretion in determining when evidence came to his knowledge. It is a fact. He cannot alter it to suit himself. As counsel for the respondents observed, [TRANSLATION] “He is simply stating a fact.”
Turning to the second alternative, here again the Minister’s act of filing a certificate in the Court of Sessions of the Peace does not in my opinion constitute either a decision of an administrative nature or the exercise of a discretionary power. For the Minister, it is the use of a mode of proof which is specifically authorized by the Act. Instead of requiring the Minister to testify in each case, the Act provides that the Minister may file a certificate which takes the place of testimony by him, as is true in many other areas. It is a rule of the administration of evidence which does not entail any administrative decision or exercise of a discretionary power by the Minister. The fact that the Act also provides that the certificate is “conclusive evidence” of the day on which the evidence came to the Minister’s knowledge does not in any way alter the nature of the latter’s act or acts.
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The filing of a certificate stating the date on which evidence came to the Minister’s knowledge does not constitute, either in the fact of filing the certificate or in the statement which it contains, an administrative decision or the exercise of a discretionary power by the Minister so as to make the definition of the words “federal board, commission or other tribunal” applicable to him.
Conclusion
Without making any decision on the other points raised, I am of the opinion that in the case at bar there is no remedy under s. 18 of the Federal Court Act, and that for this reason the appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellants: Byers, Casgrain, McNally, Dingle, Benn & Lefebvre, Montreal.
Solicitors for the respondents: Gaspard Côté and Jacques Ouellet, Montreal.