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.
* * *
PRATTE J.: I concur.
* * *
URIE J.: I concur.
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