Marshall, Thomas C.

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Deputy Minister of National Revenue v. McMillan and Bloedel (Alberni) Ltd., [1965] S.C.R. 366

York University, Osgoode Hall Law School

Osgoode Hall Law JournalVolume 4, Number 2 (September 1966) Article 18Deputy Minister of National Revenue v. McMillanand Bloedel (Alberni) Ltd., [1965] S.C.R. 366Thomas C. MarshallFollow this and additional works at: http://digitalcommons.osgoode.yorku.ca/ohljCommentaryThis Commentary is brought to you for free and open access by the Journals at Osgoode Digital Commons. It has been accepted for inclusion inOsgoode Hall Law Journal by an authorized editor of Osgoode Digital Commons.Citation InformationMarshall, Thomas C.. "Deputy Minister of National Revenue v. McMillan and Bloedel (Alberni) Ltd., [1965] S.C.R. 366." OsgoodeHall Law Journal 4.2 (1966) : 350-354.http://digitalcommons.osgoode.yorku.ca/ohlj/vol4/iss2/18OSGOODE HALL LAW JOURNALfor the "common good" is in the ascendency. The pendulum had swunga long way from the organic mediaeval society through the Renais-sance to laissez-faire of the nineteenth century and now is returning.The subtle encroachments of administrative regulation upon the livesof the citizens have been growing at an accelerated rate. It would bewell to remember that a legal system shapes its society no less thanthe nature of a society determines its legal system.J. W. MIKDeputy Minister of National Revenue v. McMillan & Bloedel (Alberni)Ltd., [1965] S.C.R. 366.CUSTOMS TARIFF - ADMINISTRATIVE LAW IMPLICATIONS OF CLASSIFY-ING IMPORTED GOODS - QUESTIONS OF FACT AND LAW.The respondents purchased a Beloit 276-inch newsprint machinewith a rated mechanical speed of 2,500 feet per minute. On importa-tion of the machine from Wisconsin, the Port Appraiser classifiedthe machine as being of a class or kind made in Canada and appliedTariff item 427.1 The respondent requested that the newsprint machinebe classified as of a class or kind not made in Canada under Tariffitem 427a.2The former item carried a rate of 22 % as compared with 71/ ;in monetary terms the difference is some $450,000.The classification by the Port Appraiser was confirmed by theDominion Customs Appraiser and by the Deputy Minister of NationalRevenue. From this decision the respondents appealed to the TariffBoard and subsequently to the Exchequer Court of Canada. TheDeputy Minister of National Revenue appealed to the Supreme Courtof Canada.The main issues raised in the Exchequer Court were: first, whatwas the material time in determining whether the machine was orwas not of a class or kind made in Canada; secondly had the TariffBoard erred in law in classifying the newsprint machine as it did.The respondents argued that the material time for the purposeof classification was the date on which the contract to purchase wasconcluded. It followed, therefore, that although Dominion EngineeringCompany Limited had subsequently manufactured a similar machine,the mere willingness and ability, to manufacture at the date of con-tracting was irrelevant. To hold otherwise, it was contended, would* J. W. Mik, M.A. (Toronto), LL.B. (Osgoode), is a member of the 1966graduating class.1 427. All machinery composed wholly or in part of iron or steel, n.o.p.,and complete parts thereof.2 427a. All machinery composed wholly or in part of iron or steel, n.o.p.,of a class or kind not made in Canada, complete parts or the foregoing.[VOL. 4Supreme Court Reviewbe an error of law.3 The Supreme Court of Canada, however, decidedthat the material time was the date on which the goods were importedinto Canada. At that date similar machines had been manufacturedin Canada.The Tariff Board has interpreted the meaning of the words"class or kind" as contained in Tariff items 427 and 427a.5 "Classor kind", it was said, did not refer simply to a species of machinery(e.g. power cranes) but coupled with section 6 (10) of the CustomsTariff Act,6 a section of general application, contemplated a furthersub-division into machinery of sufficient similarities. The argumentwas that since "quantities" implied the counting of pieces ofmachinery, they must be of sufficient similarity. This, and the theorythat the schedules to the Customs Tariff Act7 are comprehensive andcover all imports, pre-suppose a reasonable degree of narrowness inclassification.Criteria then must be developed to distinguish between goodsthat appear in the same general category. This is more necessary asall items must be classified on their entry into Canada.The second objection of the respondent involved this question ofclassification.MacMillan & Bloedel contended that the design speed of themachine should be conclusive of its classification as it was not onlygreater than domestically produced machines but also, and moreimportant, determined the construction and overall design of muchof the machine.The Exchequer Court held that the Tariff Board erred in lawby not considering the respondent's contention.8The Tariff Board found that design speed was not commonlyrecognized as a single measure by which a whole machine could becharacterized and therefore cannot be accepted as the criterion ofclass or kind. The argument rejected here and in the Supreme Courtof Canada was based on the decision in Dominion Engineering WorksLtd. v. D.M.N.R. 9 where dipper capacity alone (i.e. a single physicalcharacteristic) was held to be conclusive of the classification of steamshovels. Dipper capacity affected all the specifications for the machineand was commonly accepted for purposes of differentiating onemachine from another. A related consideration was that dipper3 John Bertram Sons Co. Ltd. v. John IngZis Co. Ltd. (1959), 20 D.L.R.(2d) 577 (Ex. Ct.) where it was held that the fact that a domestic manufac-turer is willing to make an article is not a criterion of whether it is of a classor kind made in Canada.4 S.43 Customs Act as amended by 3-4 Eliz. II, c. 32 (1955).5 1 T.B.R. 90 (Appeal No. 272, March 18, 1953).6 S.6(10) "For the purpose of this Act goods shall not be deemed to beof a class or kind made or produced in Canada unless so made or producedin substantial quantities. .7 R.S.C. 1952, c. 60.8 (1964), 43 D.L.R. (2d) 496, at p. 507, per Dumoulin J.9 [1958] S.C.R. 652.19661OSGOODE HALL LAW JOURNALcapacity also in large measure determined the application of themachine.The Supreme Court of Canada rejected the respondent's argumentwithout any difficulty. The Customs Act s. 45, provides for an appealfrom the Tariff Board to the Exchequer Court only upon a questionof law. The Supreme Court dismissed the appeal on the grounds thatthe Tariff Board had not erred in law. Hall J., in considering whichtariff item applied, said that "the machine in question in this actionmust fall within one or other of these items according to findingsof fact".10 Authority was found in the Dominion Engineering case"where Judson J., in considering a similar question stated:Where are the errors of law asserted by the appellant in this case? Ihave already stated that in my opinion there was ample evidence beforethe Board to justify, the finding made. This is not a case of a findingbeing made in the absence of evidence. Further, I am totally unable todiscover that in making this classification the Board applied the wrongprinciple or failed to apply a principle that it should have applied. Thetask of the Board was to classify a piece of machinery-to determinewhether it was of a class or kind not made in Canada.This is a task involving a finding of fact and nothing more.... I donot think there is any error in the Board's decision but if there were,it could only be one of fact.12In Edwards v. Bairstow13 a finding made in the absence ofevidence was an error of law and subject to appeal. Where there isany evidence the courts have consistently resorted to classifying thefindings of a tribunal such as the Tariff Board as a question of fact.Edwards v. Bairstow involved a consideration of whether a cer-tain undertaking was in the nature of a trade. Viscount Simondsstated:To say that a transaction is or is not an adventure in the nature of tradeis to say that it has or has not characteristics which distinguish suchan adventure. But it is a question of law, not of fact, what are thosecharacteristics, or, in other words, what the statutory language means.It follows that the inference can only be regarded as an inference offact if it is assumed that the tribunal which makes it is rightly directedin law what the characteristics are and that, I think, is the assumptionthat is made.14In D.M.N.R. v. J.M.E. Fortin Inc.15 it was said that althoughthe Board might have reached another conclusion, they would nothave been irresistibly driven to it. Therefore, the Exchequer Courtheld that there was no error in law.In these cases the party challenging the ruling of the TariffBoard alleges that a material consideration has been disregarded andthat this constitutes an error in law. As pointed out, only where thedecision is perverse or there was no evidence upon which a reasonable10 [1965J S.C.R. 366, at p. 373.11 Supra, footnote 9.12 Supra, footnote 9, at p. 656.13 [1956] A.C. 14.14 Ibid., at pp. 30-31.15 [19651 Ex. C.R. 31.[VOL. 4Supreme Court Reviewman could arrive at such a conclusion will the courts hold that thereis an error in law.In Canada Lift Truck Co. Ltd. v. D.M.N.R. 16 Kellock J. said:The question of law above propounded involves at least two questions,namely, the question as to whether or not the Tariff Board was properlyinstructed in law as to the construction of the statutory items and thefurther question as to whether or not there was evidence which enabledthe Board, thus instructed, to reach the conclusion it did.While the construction of a statutory enactment is a question of law,and the question as to whether a particular matter or thing is of suchor kind as to fall within the legal definition is a question of fact, never-theless if it appears to the appellate court that the tribunal of fact hadacted either without any evidence or that no person, properly instructedas to law and acting judicially, could have reached the particular deter-mination, the Court may proceed on the assumption that a misconceptionof law has been responsible for the determination. 17Therefore, although it appears that there is no doubt that a find-ing without evidence would constitute an error of law and hence besubject to appeal, there is still some question as to the exact natureof the classifying process. The Exchequer Court in the present casehad some difficulty with it. They allowed the appeal. Rand J. in hisdissenting judgment in the Dominion Engineering case 8 thought thatby failing to consider the economic impact of the goods in questionon the industry an element material to the decision had been ignoredand that an error in law had been made.Quite apart then from a decision made in the absence of evidencea more fundamental problem is revealed. This is the proper charac-terization of the process involved in the determination of issues bysuch tribunals of fact.The problem is twofold. First, one must properly categorize thefindings of such a Board as findings of fact or findings of law. Thisis significant when, as here, appeals may be taken only on questionsof law. Secondly, if there is some ground for saying that the Board'sdeterminations involve questions of law (here it is difficult to dis-tinguish between a misconception as to the interpretation of a statuteand the findings) are the courts deliberately deferring to the rulingsof the Board?The courts may consider that the provision of a right of appealfrom the decision of such a tribunal (even on questions of law) istoo broad and that the proper functioning of the Board is undulyhindered. By treating a particular matter as a matter of fact ratherthan as a matter of law a right of appeal is removed. Such a policymay indicate a refusal to act based on sound policy judgment."[Questions of law and fact" are not two mutually exclusive kinds ofquestions, based upon a difference in subject-matter. Matters of law growdownwards into roots of fact, and matters of fact reach upward, withouta break, into matters of law. The knife of policy alone effects an artificial16 (1956), 1 D.L.R. (2d) 497 (S.C.C.).17 Ibid., at p. 498.18 Supra, footnote 9.1966]OSGOODE HALL LAW JOURNALcleavage at the point where the court chooses to draw the line betweenpublic interest and private right.'9The analysis is further complicated where a word of common meaningis itself used in a statute. In such cases judges are tempted to argue thatthe application of the word involves a purely factual finding, and Istherefore not subject to the judicial control which is appropriate toconclusions of law.20In the instant case a determination between the application oftariff items 427 and 427a is not merely a question of fact; it alsoentails a legal determination of the ambit of these two categories.The area is far from clear. It would certainly aid matters if the courtswould recognize that the tribunals do decide questions of law.THOMAS C. MARSHALL*WILLSMacGregor v. Ryan, [1965] S.C.R. 757.WILLS - VALIDITY - ALLEGATION THAT TESTATRIX LACKED TESTA-MENTARY CAPACITY - ALTERNATIVE ALLEGATION OF UNDUE IN-FLUENCE - WHETHER SUSPICION RAISED BY CIRCUMSTANCESSURROUNDING EXECUTION OF WILL DISPELLED - ONUS OF PROOF.In the recent case of MacGregor v. Ryan' the Supreme Court ofCanada was afforded an opportunity of authoritatively settling severalcontentious issues in the law of wills. An appeal had been taken bythe caveator from the Ontario Court of Appeal judgment dismissingan appeal from the order of the Surrogate Judge admitting the willto probate. The caveator attacked the validity of the will on thetraditional grounds that the will was not duly executed, the testatrixdid not possess the requisite testamentary capacity, and the will wasprocured by undue influence.In the Supreme Court of Canada the first of these grounds wasabandoned, leaving the issues of testamentary capacity and undueinfluence,2 but the case is significant from a jurisprudential point ofview for its discussion of burdens and standards of proof.The facts, as found by the learned trial judge and confirmed bythe Court of Appeal, were that the testatrix, aged ninety-one, andconfined in the hospital, told her sole remaining executor, on the19 Louis L. Jaffe, Judicial Review-Questions of Law (1955-56), 69 Harv.L. R. 239, at p. 240n, quoting from Dickinson, Administrative Justice and theSupremacy of Law (1927), p. 55.20 Ibid., p. 243.* Thomas C. Marshall, B.A. (Toronto), LL.B. (Osgoode), is a member ofthe 1966 graduating class.1 [19651 S.C.R. 757, (1966), 53 D.L.R. (2d) 126.2 Judson, J. (dissenting) views the argument of the appellant as confinedto the issue of testamentary capacity (p. 128); Ritchie, J. (for the majority)interprets the appellant's argument as being primarily directed to the issueof undue influence (p. 132).354 [VOL. 4

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Deputy Minister of National Revenue v. McMillan and Bloedel (Alberni) Ltd., [1965] S.C.R. 366

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