126 EXCHEQUER COURT REPORTS. [VOL. XVII. 1918 ROBERT LOWE, March 14. SUPPLIANT, AND HIS MAJESTY THE KING, RESPONDENT. Yukon—Intoxicating liquors—License—Customs—Illegal tax—Recovery. Under the provisions of the statutes relating to Yukon Territory the Dominion Government has the power to exact a fee for the granting of a permit for the importation or bringing in of intoxicating liquors in the territory; such exaction is a mere charge for the granting of the permit and not in the nature of customs duties or tax within the provisoins of the Customs Act (R.S.C. 1906, c. 48, s. 180). (2) Where such a charge has been illegally imposed but paid voluntarily it cannot be recovered back. PETITION OF RIGHT to recover taxes alleged to have been illegally exacted. Tried before the Honourable Mr. Justice Cassels, at Ottawa, January 24, 1918. W. D. Hogg, K.C., for suppliant. C. P. Plaxton and F. P. Varcoe, for respondent. CASSELS, J. (March 14, 1918) delivered judgment. This was a Petition of Right filed on behalf of Robert Lowe, of Whitehorse, in the Yukon Territory. The petition was filed in the Exchequer Court
VOL. XVII.] EXCHEQUER COURT REPORTS. " 127 on the 1st day of April, 1915. It .is stated that. the 1918 petition was deposited with the Secretary of State r-4 ," on February12th, 1915. THE KING. Reasons for The Petition of Right alleges as follows : ~r ► t. "2. That for a number of years past your sup-"pliant imported into the said Territory, under "permit duly obtained, large quantities of spirit- . "uous or malt liquors, wine, ale, porter, beer and "lager beer, upon which spirituous or malt liquors "he was obliged to pay in addition to the Customs " and Inland Revenue tax already paid thereon, a "tax of two dollars per gallon on all the , said "spirituous or malt liquors so imported by him "into the said Territory as aforesaid, and upon `,`the said wine, ale, porter, beer and lager beer "he was obliged to pay a tax of fifty cents a gallon "on such liquors so imported. , "3. That during the years between July, 1900, "and the present time your petitioner has been "obliged to pay, and has in fact paid on account "of the said tax upon the spirituous and malt Ii-"quors, wine, ale, porter, beer and lager beer so "imported into the said Territory as aforesaid to "the officers of the Dominion Government and "those employed under the said officers inthe col- lection of revenue for the said Yukon Territory, "the sum of eighty-seven thousand three hundred "and forty-seven dollars. "4 That the imposition of the said tax of two "dollars per gallon on spirituous and malt liquors "and the tax of fifty cents per gallon on wine,,ale, "porter, beer and lager beer so imported into the "said Territory as aforesaid by your -'suppliant "was and is based upon certain orders in. council,
128 EXCHEQUER COURT REPORTS. [VOL. XVII. 1918 "passed by your Majesty's government of Can-Lowe v. "ada from time to time between the 26th day of Tut KING. "July, 1900, and the 12th day of August, 1911, 8esIionefor J'nàg3nent. "which Orders-in-Council purport to be founded • "upon the provisions and powers contained in the "Yukon Territory Act, now consolidated in Re- vised Statutes of Canada, as Chapter 63, and the "money so collected has been and is assigned un-"der the provisions of the said orders in council "to form part of the revenue of the said Yukon "Territory. "5. The suppliant alleges and the fact is that "the said orders in council are ultra vires' the "government of Canada, the said government not "having been authorized or empowered by the "said Yukon Territory Act to impose the said tax "on spirituous or malt liquors, ale, porter, beer "or lager beer imported or brought into the said "Territory; and the suppliant submits that the "sum above mentioned has been exacted from "him without warrant or legal authority by the "officers of your Majesty's government of Can- ada, and has been received by your Majesty's "said government as money paid to your Majesty "for the use and benefit of your suppliant, and "should be repaid to your suppliant with in-"terest." The petitioner claims that it may be adjudged that he is entitled to payment of the sum of $87,347, being the amount of the tax illegally exacted. To this petition His Majesty the King, represented by the Attorney-General for the Dominion of Canada, filed a defence. The second paragraph of his defence reads, as follows:
VOL: XVII.] EXCHEQUER 'COURT REPORTS, 129 "If the suppliant did make such payments as x 918 "in_ the third paragraph' of the petition of right "alleged, which the Attorney-General does not r8: KING. 8essôni :or "admit, such payments were made voluntarily by Judgment. "him, and the Crown is under no liability to repay "them." In paragraph 2a the respondent alleges, as fol- - lows : "The alleged debt, cause of action or f claim "pleaded herein did not accrue within six years "before this action, and was and is barred by the "statute of limitations. Exchequer Court Act, "R.S.C. 1906, ch. 140, sec. 33. North-West Terri - "tories Act, R.S.C. 1906, ch. 62, sec. 12. Yukon "Act, R.S.C. 1906, eh. 63, sec. 19. Yukon Consoli- "dated Ordinances, 1914, ch. 55, sec. 1. 21 James "I, ch. 16, sec. 3." On the argument of the case respondent asked permission to supplement, his . defence by pleading the limitation which is provided by sec. 130, ch. 48, Revised Statutes of Canada, 1906. This 'section reads .as follows : "Although any duty 'of customs has ' been over- paid, or although, after any duty of customs has "been charged and paid, it appears or is judicially "established that the same was charged under an " erroneous construction of the law, no such over= "charge shall be returned After the expiration of "three years from the date, of such payment, un-" "less application for payment has been previ-"ously,made." The respondent was granted leave to file this supplemental defence, and although in the view I take
130 EXCHEQUER COURT REPORTS. [VOL. XVII. 191 s of the case it is not necessary to determine this Lovz point, if a higher court should take a different view, TEE KING. the question will arise whether or not this sec. 130 Reseont for a~aa~en~• is applicable to the facts of the case, and would protect the respondent from any repayment for a longer period than three years. No application for repayment had been previously made. In connection with sec. 130, in the interpretation the Act respecting the customs, sec. 2, sub-sec. 2, contains the following: "All the expressions and "provisions of this Act or any law relating to cus- toms, etc." If it were to appear, as Mr. Hogg argued, that the charges imposed and collected are in the nature of customs duties, my view is that this sec. 130 would be applicable. Before dealing with the case it would be well to state that in the year 1902, by the statute 2 Ed. VII., cap. 34, the Yukon Territory Act was amended, and for the first time, as far as I can ascertain, sub-sec. 2, of sec. 8, was enacted. It reads as follows : "2. Every ordinance made under the authority "of this section shall remain in force until the day "immediately succeeding the day of prorogation "of the then next session of parliament, and no "longer unless during such session of parliament "such ordinance is approved by resolution of both "Houses of Parliament." The subsequent provision is in regard to publication in the Gazette. On the argument Mr. Hogg, K.C., who appeared for the suppliant, and Mr. Newcombe, K.C., who appeared for the Crown, agreed that this provision of sub.-sec. 2, of a R 0,qn : i4 . 2 Ed. VII., had been
' VOL. XVII.] EXCHEQUER COURT REPORTS.' 131 • complied with, and also that all the provisions re-1 918 • lating to the advertisement had been complied with. • LO E THE KIN. The Yukon Territory' Act. (intituled "An Act to Reaaone for provide for the-' Government of the Yukon Terri- Judgment. tory"), . (1) reads as follows "113. No intoxicating liquor or intoxicants shall. "be manufactured, compounded, or made in' the "Territory; and no intoxicating liquor or intoxi-"cants shall be imported or brought into the Ter "ritory from any province or territory in Canada "or elsewhere, except by permission of .the Gov=. " ernor-in-Council." Sec, 114 reads as follows: "114. All intoxicating liquors or intoxicants im- "ported or brought from any place out of, Can-"ada, - into the Territory, shall be subject to the "customs and excise laws of Canada." , I suggested to 'counsel that it might be swell to supplement the admission of facts, which had been agreed upon by a statement showing whether the _ liquors referred to were imported or brought into the Territory from any.province or territory in Can- ada, or whether they were imported or. brought from any place out of Canada, and the parties have agreed to , supplement the admissions which are on file by stating that the liquor above 'referred to was brought . into the Territory, from other parts of Canada: • The parties have agreed upon a statement of facts, the first three paragraphs of which reads as follows: . "1. That under permits duly issued _in pur- suance of the provisions of the orders-in-council (1) R.S.C. 1906, e. 63.
132 EXCHEQUER COURT REPORTS. [VOL. XVII. 1918 "hereinafter mentioned, the suppliant, trading LOWE v. "under the name of Robert Lowe and Company, THE KING. "at Whitehorse, in the Yukon Territory, during Reasons for Judgment. "the years between June 24, 1901, and April 1, "1915, imported and brought into the said Terri -"tory spirituous and malt liquors, ale, porter, beer "and lager beer. "2. That during the period aforesaid the sup- . "pliant paid to officers of the respondent in the "said Territory, in respect of the liquors so im-"ported, the following sums of money : "1901-2 • $16,436.00 "1902-3 4,986.00 "1903-4 7,785.50 "1904-5 6,386.50 "1905-6 9,947.00 "1906-7 6,414.00 "1907-8 5,650.00 "1908-9 5,800.00 "1909-10 3,742.00 "1910-11 5,125.00 "1911-12 5,902.00 "1912-13 3,318.00 "1913-14 3,501.00 "1914-15 1,796.00 $86,789.00 "3. That the said permits were issued and the "said payments were made in pursuance and subject to the provisions of the following Orders-in-"Council : "Order in Council dated Feb. 25, 1901, P.C... 256 "Order in Council dated March 5, 1901, P.C. 257 "Order in Council dated March 18, 1901, P.C. 579
. VOL. XVII.] . EXCHEQUER COURT. REPORTS. 133 "Order in Council dàted Jule 22, 1904, P.C.-.1159 1918 "Order in Council dated Sept. 17, 1908, P.G.2055 LO, E "Order in' Council dated Dec. 9, 1909, P.C...2475 _1'HE KIN 8ea aoas G fo . r "Order in Council dated August 12, 1911, P.0.17,94' jud~eat. The ' various orders-in-council under ,which the fees were exacted 'are filed as part, of the proceed- ings in the present action. I have considered the various statutes relating to the Yukon Territory. Cap. 6 of '61 Vic. (13th June,' 1898), which constitutes the Yukon a judicial dis- trict. Cap. 11, 62 & 63 Vic. (11th August, 1899, re- pealed the 'previous sec. 8, and provided as follows: • "Provided always that the' Governor-in-Council "or the Commissioner-in-Council may make regu- "lations in respect to shop,` tavern and other li- censes, and may impose fees. for the issue of the ,, e "same." By cap. 41, 1 Ed. VII. (23rd ,May 1901) it was. provided that the Yukon should no longer ' form part ' of , the . North-West . Territories. . Colour is afforded to the argument advanced by Mr. Hogg that the fees which were exacted for the. granting of the permit were in reality , a tax by the language used in orie or two of the ordinances which are filed.' For instance, the ordinance which is dated September 17th, 1908, i's headed "Ordinance re- specting the, imposition of a tax upon ale, porter, "beer, or lager beer, imported into the. Yukon Tér- "ritory:" It purports to. amend a - previous . ordi- nance of June 22nd, 1904, by providing that on And after the first day of November, 1908, a tax of 50 cents a gallon be imposed.' A subsequent ordinànce, passed on December 9th, 1909, is an ordinance to
134 EXCHEQUER COURT REPORTS. [VOL. XVII. 1918 rescind an ordinance respecting the imposition of a Lo b w . s tax. Tun KING. 8rawa~ for Various permits were • from time to time obtained Judgm nt• by the suppliant permitting him to take into the Territory intoxicating liquor or intoxicants. ThP ordinances would indicate that as a term for obtaining these permits the applicant was asked to pay certain fees which apparently were graduated or based upon the quantity of intoxicating liquors which he sought permission to take into the Territory. For a time my impression was that these exac-tions were in the nature of customs dues and in the nature of a tax, but on reflection I have come to the conclusion that they were mere charges macle by the Dominion government for the granting of the permit. It was conceded before me by Mr. Hogg, counsel for the suppliant, and who presented his case with great ability and considerable research, that the Dominion government had the right to impose license fees as a term for the granting of the permits. His contention, however, is that the amounts charged were so excessive as to show` that they were really charged as customs dues or as a tax. If it be once conceded that the Governor in Council had the right to impose a fee for the granting of the permit, I do not think it would be open to the suppliant to question the amount. He paid what was asked, raised no objection, did not pay under protest, but acquiesced in the charges, and no doubt when he came to retail the liquor, the consumer paid what had been advanced for the permit. I think that a fee could be legally exacted for the granting of the permit. It is not the case of a man 11•11111
VOL. XVII." EXCHEQUER ,COURT REPORTS. , 135 having the right to take liquor into the Territory,. 1918 , and then being charged with this so-called tax. He LT Tab Kum had the right to accept or refuse the permit. 8ouoni for 'The case of Chappelle v. The King (1), is of a dif- JudBa~eab. ferent character. In that case the plaintiff had the legal'" right to mine . for ores. _ Subsequent to y the granting of this right the Crown attempted by regu- lations to alter his contract by requiring him to pay certain royalties. It was .held that this was illegal so far as the first. license was. concerned. Subse- quently the Privy Council adopted the judgment of Sir Louis Davies, to the effect : that the subsequent. licenses were practically new grants, and were sub- ject to the regulations then in force. • , The case was somewhat similar to the case of ' Booth v. The King (2), a case referring to the renewal 'of a license to cut timber. In the' present case before me, as I have pointed out, there was in no sense any change or attempted change of any contract entered into between the Crown and the suppliant. He voluntarily acquiesced . in the charge made by the permit, and even if, it were to be held illegal as a tax, I do not think 'he could recover. In an elaborate judgment of the Court of Appeal in, Ontario in the case of Cushen v. City of Hamilton (3), it was held that fees having been paid with`fûll knowledge of the facts, under a claim of right, could not be recovered back. Another case of taxes paid was that of O'Grady v. Toronto (4) (1) 7 Can. Ex. 414; 32 Can. S.C.R. 586; [1904] A C. 127. (2) 51 Can. S.C.R. 20, 21 D.L.R. 558. (3) 4 O.L.R. 265. (4) 37 O.L.R. 139, 81 D.L.R. 632. •
136 EXCHEQUER COURT REPORTS. [VOL. XVII. 1918 I would in addition to the cases I have mentioned LOWE V. add the case of the Grand Trunk Railway v. Quebec THE KING. (1),—and would refer to the language of Mr. Jus-Reasons for Judgment. tice Strong at page 79.. It is obiter, but nevertheless the opinion of a very eminent judge. I have also been furnished with an elaborate list of authorities to show that under the general words authorizing the Governor in . Council to enact laws for the peace, order and good government, etc., that as a matter of police regulation there was the power on the part of the Governor in . Council to charge these fees. I do not think it necessary to rely upon this point, but I may add that any power to enact a law in the nature of a police regulation would fall rather to the Yukon government than to the Governor in Council of the Dominion. Claims of this character become serious if after such length of time these moneys have to be paid back. The case of Schlesinger (2) may be, referred to as showing the views of the American courts. I think the petition should be dismissed with costs. Petition dismissed. Solicitors for suppliant: Hogg & Hogg. Solicitor for respondent : E. L. Newcombe. (1) 30 Can. S.C.R. 73. (2) 1 Court of Claims, p. 16.
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.