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A-628-75
Rothmans of Pall Mall Canada Limited and Imperial Tobacco Limited (Appellants)
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)
[No. 2]
Court of Appeal, Pratte, Urie and Le Dain JJ.— Ottawa, March 1, 2 and April 12, 1976.
Customs and excise—Appellants seeking declarations to general effect that filter portion of cigarette should be includ ed in determining length for purpose of duty—Respondents moving to strike statement of claim on grounds of no reason able cause of action and that action frivolous and vexatious, and an abuse of process—Respondents claiming appellants not aggrieved, and without status, in that other proceedings with similar conclusions before court and that conclusions of state ment of claim those for executory judgment—Trial Division striking out and dismissing—Excise Act, R.S.C. 1970, c. E-12.
Appellants sought declarations to the general effect that the filter portion of a cigarette should be included in determining its length for purpose of duty under the Excise Act. Respondent Benson & Hedges, supported by the other respondents, moved to strike the statement of claim on grounds that appellants did not have a reasonable cause of action, and that the action was frivolous and vexatious, and an abuse of process. Respondents claimed that appellants were not aggrieved by the action com plained of and lacked status, in that other proceedings with similar conclusions were before the Court, and in that conclu sions in the statement of claim were not those of a declaratory action, but of an executory judgment. In an uncirculated decision, the Trial Judge struck out the statement of claim and dismissed the action as an abuse of process, alleging that it raised identical issues to those before the Court in the notice of motion ([1976] I F.C. 314), and that no relief could be obtained by the action that could not be by the originating notice. Appellants had offered no further support for their claim to locus standi except a department memorandum con firming the Department's change of policy. The Trial Division concluded that the ulterior motive was to frustrate competition by a redundancy of actions and that appellants suffered no damages.
Held, the appeal is dismissed. The memorandum adds noth ing significant to the circumstances before the Court in the other appeal ([1976] 2 F.C. 500), but merely confirms the change in administrative policy on which the other proceedings
were based. However an action for a declaration may lie where certiorari, prohibition, mandamus or injunction may not, espe cially where servants of the Crown are involved. And, under the Rules, declaratory relief must be sought by way of action. Thus, the action is not frivolous or vexatious, or an abuse of process. However, the same lack of locus standi which led to the dismissal of the other proceedings is fatal here as well. Bearing in mind the other appeal, the locus standi requirement in a declaratory action is not less strict, in such a case, than in a motion for injunction.
Cowan v. C.B.C. [1966] 2 O.R. 309, discussed.
APPEAL. COUNSEL:
R. T. Hughes for appellants.
W. B. Williston, Q.C., and R. W. Cosman for respondent The Macdonald Tobacco Inc. G. W. Ainslie, Q.C., and W. Lefebvre for respondents Minister of National Revenue, and Deputy Minister of National Revenue for Customs and Excise.
J. B. Claxton, Q.C., for respondent Benson & Hedges (Canada) Ltd.
SOLICITORS:
Donald F. Sim, Q.C., Toronto, for appellants.
Faskin & Calvin, Toronto, for respondent The Macdonald Tobacco Inc.
Deputy Attorney General of Canada for respondents Minister of National Revenue and Deputy Minister of National Revenue for Customs and Excise.
Lafleur & Brown, Montreal, for respondent Benson & Hedges (Canada) Ltd.
The following are the reasons for judgment rendered in English by
LE DAIN J.: This is an appeal from a judgment of the Trial Division striking out a statement of claim and dismissing an action for declaratory relief.
The circumstances out of which the proceedings arise are set out in the reasons for judgment in the appeal between the same parties ([1976] 2 F.C. 500) from a judgment of the Trial Division ([1976] 1 F.C. 314) dismissing an originating
[Court number T-3098-75, uncirculated—Ed.]
notice of motion for relief in the nature of prohibi tion, mandamus, injunction and certiorari. The appellants' action, instituted after the judgment and appeal in that case, seeks declarations to the general effect that the filter tip portion of a ciga rette should be included in determining its length for purposes of duty under the Excise Act, R.S.C. 1970, c. E-12. The respondent Benson & Hedges, supported by the other respondents, brought a motion to strike the appellants' statement of claim on the ground that the appellants did not have a cause of action and that the action was frivolous or vexatious and an abuse of the process of the Court. The respondents contended that the appellants were not aggrieved by the action complained of and had no status to take the action, in that other proceedings with similar conclusions were before the court (namely, the application for relief in the nature of prohibition, mandamus, injunction, and certiorari, referred to above), and in that the conclusions of the statement of claim were not those of an action for declaratory relief but conclu sions for an executory judgment.
The Trial Judge struck out the statement of claim and dismissed the action with costs on the ground that the action was an abuse of the process of the Court. He reasoned that the action for declaratory relief raised identical issues to those which were before the Court on the originating notice of motion for relief in the nature of prohibi tion, mandamus, injunction and certiorari, and that no relief could be obtained by the action that could not be obtained by the originating notice of motion. He held that the appellants had put noth ing additional before the Court to support their claim to status or locus standi, except a depart mental memorandum confirming the change of policy complained of, which did not add anything to their case, and he concluded that "it may be inferred (1) that the plaintiffs have an ulterior motive, mainly to seek to frustrate competition from the Corporate defendants, and they seek to do so by a redundancy of actions; and (2) that they have suffered no damages."
The policy memorandum referred to is dated August 7, 1975 from W. M. Homer, Chief, Excise Duty to regional directors and reads as follows:
The Department has changed its policy regarding excise duty assessment on cigarettes.
Previous policy required that the filter attached to a cigarette was to be included in the determination of the length of a cigarette, i.e. exceeding or not exceeding four inches, and in determining the weight per thousand cigarettes, i.e. exceeding or not exceeding three pounds per M.
The new policy will exclude the filter when determining the length or weight of cigarettes for duty purposes.
Attached is a copy of the revised Circular ED 209-9 that will be published and distributed in the near future. Please ensure that excise officers and licensees in your region are advised of this change.
As the learned Trial Judge says, this memoran dum adds nothing of significance to the circum stances before the Court in the other appeal which involves the originating motion for relief in the nature of prohibition, mandamus, injunction and certiorari. It merely confirms in writing the change of administrative policy that was the basis of the other proceedings.
I cannot agree, however, that the appellants do not seek by their action for a declaration any relief that could not be obtained by the other proceed ings. An action for a declaration may lie where certiorari, prohibition, mandamus or injunction may not lie, and this is particularly true where servants of the Crown are involved. Under the Rules declaratory relief cannot be sought by origi nating motion but only by an action. Thus, with respect to some, at least, of the objections, other than the lack of status or locus standi, against the forms of relief sought in the other proceedings, it cannot be said that the action for a declaration is frivolous or vexatious or an abuse of the process of the Court. What is fatal to it, I believe, and sufficient to justify the conclusion reached by the Trial Judge is the principal ground for dismissing the other proceedings—that the appellants lack status or locus standi. It is sufficient, on this issue, to refer to the reasons for judgment in the other appeal. The requirement of locus standi for an action for a declaration is not less strict, in a case such as this, than it is for injunction. Cowan v. C.B.C. [1966] 2 O.R. 309.
I would accordingly dismiss the appeal with costs.
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PRATTE J.: I concur.
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URIE J.: I concur.
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