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.
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.