T-8489-82
Jean Senecal (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Walsh J.—Montreal, October 27;
Ottawa, November 4, 1983.
Transportation — Judicial review — Money found at
Dorval Airport not claimed by owner — Regional Administra
tor, acting under applicable Regulations, allotting part to
finder, rest to charities — Definition of "charitable institu
tion" under s. 3 of Regulations — Whether Regulations ultra
vires as conferring too much discretion on Regional Adminis
trator — Assuming not ultra vires, nothing in Regulations
requiring consecutive application of paragraphs of s. 3 thereof
— Quebec Civil Code not providing for disposition of found
objects in any definitive manner in absence of special laws on
subject — Department of Transport Act, R.S.C. 1970, c. T-15
— Income Tax Act, S.C. 1970-71-72, c. 63, ss. 110(8)(c) (as
am. by S.C. 1976-77, c. 4, s. 43(4)), 149.1(1) (as added idem, s.
60(1)) — Income War Tax Act, R.S.C. 1927, c. 97, s. 4(e) —
Civil Code of Lower Canada, arts. 593, 2268 — Airport
Personal Property Disposal Regulations, C.R.C., c. 1563, ss.
2, 3.
Personal property — Disposition of personal property lost
or abandoned at airport — Regulations authorizing Regional
Administrator to give to charitable institution — Air Canada
employee finding $10,000 U.S. on floor — Handing money to
police — Rejecting $1,500 reward offered by Regional
Administrator — Plaintiff arguing Regulation insufficiently
precise and giving Regional Administrator too much discretion
— Authorities relied on by plaintiff applicable to by-laws and
regulations with which public must comply — Donees of
property abandoned in airports not so bound — Not feasible to
specify charities to benefit — Final reward offer not so low as
to justify court interference with administrative discretion —
Discussion of provisions in Quebec Civil Code as to ownership
of lost property — Airport Personal Property Disposal Regu
lations, C.R.C., c. 1563, s. 3 — Civil Code of Lower Canada,
arts. 593, 2268.
Charities — Regulations under Department of Transport
Act giving Regional Administrator power to dispose of lost or
abandoned personal property to charitable institution — Defi
nition of "charitable institution" — Organization having as
objects expansion of musical culture and development in
young Canadians — Organization selling tickets to musical
programmes but non-profit — Promotion of arts is charitable
purpose — Wide discretion given Regional Administrator as to
choice of charitable institutions not rendering Regulations
invalid — Airport Personal Property Disposal Regulations,
C.R.C., c. 1563, s. 3.
Having found a packet containing $10,000 U.S. on the floor
at the Dorval airport, the plaintiff handed the money to the
RCMP. The officer told him that the money would be returned
to him if it was not claimed within three months. Acting under
the Airport Personal Property Disposal Regulations, the
Regional Administrator decided to give most of the money to
charity, initially offering a reward of $1,500 to the plaintiff.
The plaintiff claims the whole amount, arguing that the
Regulations, section 3 in particular, are not specific enough and
give too much discretion to the Regional Administrator and are
therefore ultra vires. The question arose as to whether the
charities in question were charitable institutions within the
meaning of section 3. The plaintiff also contends that the
paragraphs of section 3 should be applied consecutively. He
finally argues that, in the absence of any specific regulations,
the Quebec Civil Code entitles him to all of the money found.
Held, the action should be dismissed. The Regulations are
sufficiently specific; the discretion conferred is not too wide and
its exercise does not warrant judicial intervention. The charities
are all "charitable institutions" within the meaning of section 3
of the Regulations, that term being synonymous with the terms
"charitable organization" or "charitable foundation" used in
the Income Tax Act. Nothing in the wording of section 3
warrants the narrow "consecutive application" interpretation
put forward by the plaintiff. Finally, the Quebec Civil Code is
of no help to the plaintiff as article 2268 does not apply and
since article 593 merely contemplates that in most cases,
special laws will apply; otherwise found objects cannot be
disposed of in any definitive manner.
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Peter Birtwistle Trust v. Minister of National Revenue,
[1938-39] C.T.C. 356 (Ex.Ct.), affirmed by [1938-39]
C.T.C. 371 (P.C.); Commissioners for Special Purposes
of the Income Tax v. Pemsel, [1891] A.C. 531 (H.L.);
City of Verdun v. Sun Oil Company Ltd., [1952] 1
S.C.R. 222; Minister of National Revenue et al. v.
Creative Shoes Ltd., et al., [1972] F.C. 993 (C.A.);
Compagnie Miron Ltée c. Sa Majesté la Reine, [1979]
C.A. 36 (Que.); Nicholson v. Haldimand-Norfolk
Regional Board of Commissioners of Police, [1979] 1
S.C.R. 311.
COUNSEL:
Pierre Gaston for plaintiff.
Stephen Barry for defendant.
SOLICITORS:
Pierre Gaston & Associés, Lachine, Quebec,
for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
WALSH J.: The facts in this case are not in
dispute but issues are raised which do not appear
to have been previously dealt with in jurispru
dence. Plaintiff, a loading supervisor for Air
Canada, and his wife were leaving the cafeteria in
the Dorval International Airport in Montreal when
he found a packet of money on the floor. He asked
some nearby travellers if it was theirs; when they
did not claim it he took it to the Royal Canadian
Mounted Police at the airport, delivering it to the
officer there where it was counted and found to
consist of 100 bills of $100 each for a total of
$10,000 in American funds. The officer there
allegedly told him that if it was not claimed in
three months it would be returned to him noting
the date of finding July 28, 1981, and another date
October 28, 1981, in an informal receipt which he
gave him on a piece of paper. When after the
three-month period had expired, he went to claim
it, he was refused and brought the present pro
ceedings. The information given to him by the
Constable that if the owner did not claim it it
would be returned to him after three months was
erroneous but that is not the issue in the present
proceedings.
Defendant referred to chapter 1563 of the Con
solidated Regulations of Canada made pursuant to
the provisions of the Department of Transport Act
[R.S.C. 1970, c. T-15] designated as Regulations
Respecting the Disposal of Personal Property Left
at Airports. Section 3 of these Regulations reads
as follows:
3. All personal property that has been lost or abandoned at
an airport or that otherwise remains unclaimed at an airport
shall, subject to reclamation by the owner thereof, be retained
at the airport in the custody of the Airport Manager for a
period of not less than 30 days and at the end of such period the
Regional Administrator may dispose of that personal property,
at his discretion, by one or more of the following methods:
(a) by return to the finder, if the finder is not an employee of
the Department;
(b) by private sale or by sale at public auction;
(c) by disposition, by gift or otherwise, to a charitable
institution in Canada; or
(d) by destruction where no other method of disposal is
deemed appropriate.
André Dumas who has been the Administrator
of Transport Canada for the Quebec Region since
1976 testified that he arranged for the distribution
in accordance with this directive. On the date of
the deposit on August 3, 1981, by the Director of
Financial and Administrative Services of the Air
port in the account of the Receiver General of
Canada, $10,000 U.S. was worth $12,330 Canadi-
an. On September 15 he decided to have cheques
issued as follows:
Jean Senecal as a reward for his civic spirit $ 1,500
Centraide $ 2,000
Fonds de développement de l'hôpital Ste-Justine $ 3,000
Fondation du Québec des maladies du coeur $ 1,915
Société canadienne du Cancer $ 1,915
Leucan $ 2,000
TOTAL $12,330
Plaintiff refused to accept this offer so the
cheques were retained and not distributed save for
that to the order of Leucan which had already
been given to it. Although paragraph 15 of the
statement of defence indicates that four cheques
were then issued in April 1982, two in the amount
of $1,000 each for the Canadian Cancer Society
and a third in the amount of $500 for it, and a
cheque for $400 to the Jeunesses musicales, Mr.
Dumas testified that the first two cheques for
$1,000 each were never. sent. The Canadian
Cancer Society received the cheque for $500, the
Jeunesses musicales for $400 and a receipt was
also produced from Leucan Inc. in the amount of
$1,776. The witness explained that Leucan Inc. is
an organization which promotes concerts for the
benefit of Ste. Justine Hospital and is a registered
charity. He recollects that the $2,000 was for the
purchase of tickets for a dinner to raise funds for
its charitable purposes, the difference between the
$1,776 for which the receipt was given and the
$2,000 donated representing the relatively small
cost of the dinner. He believes some people from
Transport Canada used the tickets. All the sums
have not been paid out as yet while awaiting the
outcome of this trial and on May 3, 1982, a cheque
in the name of the plaintiff Jean Senecal for
$2,000 was issued, which amount he refused. This
offer is renewed in the present proceedings.
While defendant had representatives from the
various organizations to whom it was proposed to
make the distribution available to testify as to the
nature of their work, the Court did not consider
this was necessary, taking note of the fact that
Centraide is a centralized welfare agency in Mon-
treal distributing funds raised in its annual cam
paign to various charitable institutions which it
supports, and that the objectives of the Quebec
Heart Fund and the Canadian Cancer Society are
well known as is the work of Ste. Justine Hospital,
the well-known French Children's Hospital in
Montreal. The work of Leucan was explained by
the witness Mr. Dumas as being devoted to raising
funds for Ste. Justine Hospital.
Jean-Claude Picard, Director General of Les
Jeunesses musicales du Canada filed a copy of its
charter which indicates that its objects inter alla
are to expand musical culture and development in
young Canadians, to help Canadian artists to pro
ceed with their musical careers, to aid young
Canadian musicians to develop their artistic cul
ture, to upgrade and expand works of Canadian
composers and solicit and receive contributions
and funds from public or private sources for these
purposes. It has been in existence since 1951 and
its work is well known in Montreal as elsewhere.
While it does sell tickets for its musical pro
grammes it is a non-profit organization and recog
nized as such under the provisions of the Income
Tax Act [S.C. 1970-71-72, c. 63].
Paragraph 110(8)(c) of the Income Tax Act [as
am. by S.C. 1976-77, c. 4, s. 43(4)] defines "regis-
tered charity" as follows:
11o. (8)(c) ...
(i) a charitable organization or charitable foundation,
within the meanings assigned by subsection 149.1(1), that
is resident in Canada and was either created or established
in Canada, or
(ii) a branch, section, parish, congregation or other divi
sion of an organization described in subparagraph (i) that
receives donations on its own behalf,
that has applied to the Minister in prescribed form for
registration, that has been registered and whose registration
has not been revoked under subsection 168(2).
Paragraph 3(c) of Regulations 1563 (supra) uses
the words "charitable institution" rather than the
words "charitable organization" or "charitable
foundation". In subsection 149.1(1) of the Act [as
added by S.C. 1976-77, c. 4, s. 60(1)] we find the
following definitions:
149.1(1)...
(a) "charitable foundation" means a corporation or trust
constituted and operated exclusively for charitable purposes,
no part of the income of which is payable to, or is otherwise
available for, the personal benefit of any proprietor, member,
shareholder, trustee or settlor thereof and that is not a
charitable organization;
(b) "charitable organization" means an organization, wheth
er or not incorporated, all the resources of which are devoted
to charitable activities carried on by the organization itself
and no part of the income of which is payable to, or is
otherwise available for, the personal benefit of any proprie
tor, member, shareholder, trustee or settlor thereof;
(c) "charitable purposes" includes the disbursement of funds
to qualified donees;
(d) "charity" means a charitable organization or charitable
foundation;
Black's Law Dictionary defines "charitable
institution" as "One supported in whole or in part
at public expense or by charity. One for the relief
of a certain class of persons, either by alms, educa
tion, or care. One administering a public or private
charity; an eleemosynary institution. One perform
ing service of public good or welfare without prof
it." It defines "charitable organization" as "One
which has no capital stock and no provision for
making dividends and profits, but derives its funds
mainly from public and private charity, and holds
them in trust for the objects and purposes
expressed in its charter. One conducted not for
profit, but for promotion of welfare of others."
The case of Peter Birtwistle Trust v. Minister of
National Revenue' dealt with paragraph 4(e) of
the old Dominion Income War Tax Act, R.S.C.
1927, c. 97 which used the words "religious, chari
table, agricultural and educational institution,
board of trade and chamber of commerce". At
page 360 of the trial judgment, Maclean J. states:
A charitable institution is, I think, an organization created for
the promotion of some public object, of a charitable nature, and
functioning as such, and I do not think it can be said that either
the Canadian Trustee or the Colne Trustee, or the Town of
Colne, or the trust fund itself, fall within that definition. A
charitable institution is, I think, clearly distinguishable from a
charity, or a charitable trust.
In the appeal to the Privy Council reported in the
same volume at page 371, the Judicial Committee
endorsed and amplified upon this distinction. In an
editorial note to the report, reference is made to
the frequently cited case of Commissioners for
Special Purposes of the Income Tax v. Pemsel,
[1891] A.C. 531 [H.L.] in which Lord Macnaght-
en stated that "charity" in its legal sense com
prises four principal divisions: "trusts for relief of
poverty, trusts for the advancement of education,
trusts for the advancement of religion, and trusts
for other purposes beneficial to the community not
falling under any of the preceding heads". The
editorial note states: "The effect of the present
judgment is to narrow the above meaning for
purposes of interpreting the word "charitable" as
related to the word "institutions" in 4(e)."
In the Canadian Encyclopedic Digest (Ontario)
at Title 24-20 under No. 29 is found the state
ment: "The promotion of the arts is a purpose
which benefits the public at large and is chari
table, and so is a gift to promote the training of
singers." In the Canadian Encyclopedic Digest
(Western) at 24-11 under No. 10 we find the
statement: "A charitable institution is an organiza
tion created for the promotion of some public
project of a charitable nature and functioning as
such."
Undoubtedly many types of non-profit organiza
tions performing services for the public good, but
I [1938-39] C.T.C. 356 [Ex.Ct.].
not strictly speaking charities can readily obtain
registration under the provisions of the Income
Tax Act so that donations to them are tax exempt.
These organizations may be of a sporting or cul
tural nature. As examples of the latter, orchestras,
ballet companies, drama groups, and musical
organizations such as Les Jeunesses musicales
would be included. They are not charitable institu
tions within the narrower sense of the words. On
the other hand it would be difficult to conclude
that the Ste. Justine Hospital, Heart Fund, or
Canadian Cancer Society are not charitable insti
tutions, and there is nothing to indicate that the
words "charitable institution" as used in chapter
1563 was intended to be given a narrow and
restrictive meaning or was to be interpreted other
wise than the words "charitable organization" or
"charitable foundation" used in the provisions of
the Income Tax Act. Moreover even if it were
found that the $400 given to Les Jeunesses musi
cales was improperly given to it, or that to the
extent of the difference between $2,000 and
$1,776 the amount given to Leucan Inc. was
improperly given to it since some benefit resulted
to the donor in the form of dinner tickets used by
some members of the Department of Transport,
this would not of itself mean that plaintiff himself
is entitled to claim these amounts. I should add
that Mr. Dumas appeared to be a fair and reason
able witness and the manner in which he exercised
his discretion does not appear to have been unfair
or contrary to natural justice.
The principal thrust of plaintiff's argument is
that chapter 1563 and in particular section 3
thereof dealing with disposal of personal property
left at airports is not sufficiently precise and leaves
too much discretion to the Regional Administrator
and hence is ultra vires. A number of authoritative
French texts were referred to in support of this
proposition. The textbook Pépin and Ouellette,
Principes de contentieux administratif, points out
at page 127, that the regulation must be complete
in itself and sufficiently explicit to make it clear to
the person to whom it is applied that he is comply
ing with it. If his rights arid powers depend in
whole or in part on the goodwill and judgment of
the authority to whom the regulation gives discre-
tion the party to whom it applies cannot be sure
until this intervention has taken place. At page
128 reference is made to the judgment of Justice
Fauteux in the Supreme Court case of City of
Verdun v. Sun Oil Company Ltd.' in which he
stated:
The mere reading of section 76 is sufficient to conclude that in
enacting it, the City did nothing in effect but to leave ultimate
ly to the exclusive discretion of the members of the Council of
the City, for the time being in office, what it was authorized by
the provincial Legislature, under section 426, to actually regu
late by by-law. Thus, section 76 effectively transforms an
authority to regulate by legislation into a mere administrative
and discretionary power to cancel by resolution a right which,
untrammelled in the absence of any by-law, could only, in a
proper one, be regulated. This is not what section 426
authorizes.
That case held that the power to make zoning
regulations which affect property rights cannot be
transformed into an administrative power discre
tionary in individual nature. Reference was also
made to the textbook Patrice Garant: Droit ad-
ministratif At page 285, we find the statement:
[TRANSLATION] A regulation is a normative act "so far as it
fulfills the role of creating legal norms of comportment and not
merely to take individual decisions".
Reference was also made in this textbook at page
286 to a Federal Court of Appeal case in Minister
of National Revenue et al. v. Creative Shoes Ltd.,
et al. 3 The Court stated at pages 1000-1001:
Moreover, the word used is not "determines" or "decides" but
"prescribes" and it appears to me that the use of that word,
which in the context of such a section connotes the making of a
rule to be followed, indicates that the power is not merely to
decide individual cases as they arise but is capable of being
exercised to lay down rules of general application to be applied
by the Deputy Minister and subordinate departmental
officers ....
Reference was also made to the textbook
Pigeon—Rédaction et interprétation des lois,
Second Edition at page 33 where the learned
former Judge of the Supreme Court states:
[TRANSLATION] Moreover it must not be forgotten that he
who has a power of regulation cannot transform this into an
administrative discretion.
and finally reference was made to the Quebec
Court of Appeal case of Compagnie Miron Ltée c.
2 [1952] 1 S.C.R. 222.
3 [1972] F.C. 993.
Sa Majesté la Reine 4 in which at page 38 we find
the statement:
[TRANSLATION] As a general rule regulating dispositions
must set forth requirements of a certain and definite nature so
that those who must obey them know their rights.
Again at page 39 we find the statement:
[TRANSLATION] It is necessary in matters of public law that
the legislative authority—especially if it is delegated—clearly
legislates in such a manner that the Courts apply to informed
or at least instructed citizens the norms established by a power
which is not a judicial power.
While it is not difficult to agree with all of these
statements they appear to be more specifically
applicable to by-laws or regulations with which
members of the public must comply and therefore
should be clearly well aware of the provisions of
them while in the present the potential donees of
property abandoned in airports are not required to
comply with any regulation, and it is only the
Regional Administrator who is called upon to
interpret and comply with it. It appears to me to
be specific, and it is difficult to see how it could be
more detailed. Certainly it would not be feasible to
name specific charitable institutions to whom the
property might be given, as the regulation applies
throughout Canada, and no doubt a Regional
Administrator would distribute it to charitable
institutions within the region in which it is found.
While it is true that it does leave considerable
discretion to him in the choice of the charitable
institutions to whom he will distribute it and as to
the amount of money to be returned to the finder,
provided he is not an employee of the Department
which is the present case, some discretion must
always be exercised by someone in the distribution
of charitable funds. Even an organization such as
Centraide must through its administrators decide
how the charitable funds received by it are to be
distributed to the member organizations. The dele
gation of discretionary authority to the Regional
Administrator in section 3 does not in my view
make the regulation invalid. If he had acted
unfairly then the Court would clearly intervene
applying the principles established in the
Nicholson 5 case. For example it might perhaps be
considered that he would have acted unfairly had
he given no reward at all to plaintiff. When it
4 [1979] C.A. 36.
5 [1979] 1 S.C.R. 311.
comes to a question of deciding however whether
the reward should be 10%, 20%, 25%, or 50% of
the amount found certainly no guidance is given to
him in the Regulations nor for that matter in any
jurisprudence, but the offer of $2,000 out of the
$12,330 available for distribution does not appear
to be so shockingly low as to justify the Court in
interfering with the valid exercise of his adminis
trative discretion.
While this finding would be sufficient to dispose
of the matter, other arguments based on behalf of
plaintiff should perhaps be dealt with briefly. It
was contended that if the Regulations were set
aside for a lack of specificity plaintiff would then
be entitled to all of the money found. In this event,
in the absence of any specific valid regulation, it
would be dealt with according to the law of the
Province of Quebec in the same manner as if it had
been found on the street or any other public place
in that Province. Article 593 of the Quebec Civil
Code would then apply. It reads as follows:
Art. 593. Things found on the ground, on the public high
ways or elsewhere, even on the property of others, or which are
otherwise without a known owner, are, in many cases, subject
to special laws, as to the public notices to be given, the owner's
right to claim them, the indemnification of the finder, their
sale, and the appropriation of their price.
In the absence of such provisions, the owner who has not
voluntarily abandoned them, may claim them in the ordinary
manner, subject to the payment, when due, of an indemnity to
the person who found and preserved them; if they be not
claimed, they belong to such person by right of occupancy.
Unnavigable rivers are, for the purposes of this article,
considered as places on land.
The article speaks for itself but the commentators
make it clear that the ownership remains with the
owner of the property who can claim it at any time
provided his right to do so has not been prescribed,
always subject to the payment of an indemnity to
the person who found and preserved it. No rules
are set forth as to how such an indemnity shall be
calculated. The commentators comment that the
property does not belong to the state, nor to the
owner of the place on which it is found, but
continues to belong to the owner. If he has not
claimed it the finder merely has a right of occu
pancy of property but not of ownership. Moreover
article 2268 of the Quebec Civil Code creating
three-year prescription cannot be invoked since it
only applies to a holder in good faith which a
finder cannot be as he necessarily knows that the
object found belongs to someone else.
Article 593 merely contemplates that in most
cases there will be special laws as to how to deal
with the property; otherwise it cannot be disposed
[of] in any definitive manner.
Plaintiff raises one final argument which I also
find to be of little merit. It is contended that the
various paragraphs (a), (b), (c) and (d) of section
3 of the Regulations should be applied consecu-
tively,—that is to say, in the first instance the
property found should be returned to the finder
and it would only be if he is unknown, not having
left his name, or does not want it, that the Region
al Administrator can then invoke the other para
graphs. The section of the Regulations as a whole
is probably more commonly used in connection
with property such as suitcases, briefcases, or par
cels. Section 2 of the Regulations in defining
"personal property" does so in a sufficiently broad
manner as to include money and this is not disput
ed. It is evident that paragraphs (b) and (d) would
not be applicable and the Regional Administrator
therefore proposed to dispose of the money by
application of paragraphs (a) and (c).
It is important to note that in the English ver
sion of section 3 we find the words "by one or
more of the following methods" although the
French version does not include a translation of
the words "one or more". Plaintiff argues that all
this means is that in the event of a suitcase for
example, which might contain old clothing, it
should first be offered to the finder, but if he is
only willing to accept the suitcase itself and not
the contents the latter could then be disposed of
pursuant to paragraphs (b) or (d) by private sale
or by sale by auction or by destruction. He similar
ly argues that paragraphs (b), (c) and (d) can only
be used if the finder refuses to accept the property
altogether.
I find there is nothing in the wording of the
section to justify such a narrow interpretation, and
in fact if it had been intended that paragraphs (a),
(b), (c) and (d) were to be applied consecutively,
with the latter paragraphs being only alternatives
in the event the prior paragraphs cannot be applied
the Regulations would have said so more clearly,
whereas on the contrary the use of the words in the
English version "by one or more" authorizes the
division made between the finder and the chari
table institutions.
For all the above reasons plaintiff's action is
dismissed subject to the payment to him of the
$2,000 Canadian offered in the defence.
Since defendant admits the issue raised in these
proceedings has not been dealt with before by the
courts, and that a judicial determination will be
welcomed as guidance in future cases, dismissal of
the action will be without costs.
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.