Eurig Estate v. Ontario Court (General Division), Registrar, (1998) 231 N.R. 55 (SCC)

• Judge: Iacobucci, Major, Bastarache and Binnie, JJ.
• Court: Supreme Court (Canada)
• Case Date: April 27, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 231 N.R. 55 (SCC);1998 CanLII 801 (SCC);[2000] 1 CTC 284;JE 98-2121;23 ETR (2d) 1;83 ACWS (3d) 146;165 DLR (4th) 1;231 NR 55;40 OR (3d) 160;114 OAC 55;[1998] SCJ No 72 (QL);[1998] 2 SCR 565

Eurig Estate v. Ont. Court, Reg. (1998), 231 N.R. 55 (SCC)

MLB Headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [1998] N.R. TBEd. OC.015

Marie Sarah Eurig, as executor of the Estate of Donald Valentine Eurig (appellant) v. The Registrar of the Ontario Court (General Division) and the Attorney General of Ontario (respondents) and The Attorney General of Quebec, the Attorney General of British Columbia and the Attorney General of Alberta (intervenors)

(25866)

Indexed As: Eurig Estate v. Ontario Court (General Division), Registrar

Supreme Court of Canada

Lamer, C.J.C., L'Heureux-Dubé,

Gonthier, Cory, McLachlin,

Iacobucci, Major, Bastarache and

Binnie, JJ.

October 22, 1998.

Summary:

The executrix of an estate applied for an order that she be granted letters probate without payment of the probate fee. She also sought a declaration that the probate fee was unlawful.

The Ontario Court (General Division), in a judgment reported at 20 O.R.(3d) 385, dis­missed the application. The executrix appealed.

The Ontario Court of Appeal, in a decision reported at 96 O.A.C. 354; 31 O.R.(3d) 777, dismissed the appeal. The executrix appealed.

The Supreme Court of Canada, Bastarache and Gonthier, JJ., dissenting, allowed the appeal. The court held that the probate levy was not a fee but a tax, albeit a direct tax. The tax was unconstitutional because, con­trary to s. 53 of the Constitution Act, 1867, it was not imposed by a legislature. It was ultra vires because s. 5 of the Administration of Justice Act authorized the imposition of a fee and did not authorize the imposition of a tax. The court suspended the declaration of invalidity for six months to enable the prov­ince to address the issue.

Constitutional Law - Topic 605

Powers of Parliament and the Legislatures - Delegation of power - Taxing powers - The Administration of Justice Act, s. 5(c), authorized the Lieutenant Governor-in-Council to make a regulation fixing pro­bate fees - The executrix of an estate attacked the validity of the probate fee on the ground that the delegation of a taxing power to the Lieutenant Governor-in­Council was implicitly prohibited by ss. 53 and 54 of the Constitution Act, 1867 - The trial and appellate courts rejected the argu­ment, holding that the levies were not taxes and were not covered by ss. 53 and 54 - Even if the levies were taxes, the delegation did not transgress ss. 53 and 54 - The Supreme Court of Canada held that the levies were taxes and were invalid - See paragraphs 14 to 41.

Constitutional Law - Topic 6821

Provincial jurisdiction (s. 92) - Direct tax­ation within the province - General prin­ciples - The Supreme Court of Canada stated that s. 53 of the Constitution Act, 1867, requires that any bill that imposes a tax must originate with the legislature - See paragraph 30.

Constitutional Law - Topic 6821

Provincial jurisdiction (s. 92) - Direct tax­ation within the province - General prin­ciples - The Administration of Justice Act, s. 5(c), authorized the Lieutenant Governor-in-Council to make a regulation fixing probate fees - The regulation pre­scribed ad valorem escalating probate fees - The executrix of an estate attacked the consti­tu­tional validity of the probate fees, sub­mit­ting that the fees were, in reality, a tax - The Supreme Court of Canada held that the probate tax imposed by the regu­lation was unconstitutional - The probate tax violated s. 53 of the Constitution Act, 1867, under which all provincial bills for the imposition of a tax must originate in the legislature - See paragraphs 28 to 37.

Constitutional Law - Topic 6822

Provincial jurisdiction (s. 92) - Direct tax­ation within the province - What con­sti­tutes a tax - The Supreme Court of Canada set forth four criteria for determin­ing whether a levy was a tax, namely, (1) enforceable by law; (2) imposed under the authority of the legislature; (3) levied by a public body; and (4) intended for a public purpose - See paragraph 15.

Constitutional Law - Topic 6822

Provincial jurisdiction (s. 92) - Direct tax­ation within the province - What con­sti­tutes a tax - The Administration of Justice Act, s. 5(c), authorized the Lieu­tenant Governor-in-Council to make a regulation fixing probate fees - The regu­lation pre­scribed ad valorem escalating probate fees - The executrix of an estate attacked the constitutional validity of the probate fees, submitting that the fees were, in reality, a tax - The Supreme Court of Canada held that the probate levy was a tax and not a fee, where it was (1) en­forceable by law, (2) imposed under the authority of the legislature, (3) levied by a public body, and (4) intended for a public purpose - In addition there was no nexus between the amount charged and the cost of providing the services - See paragraphs 14 to 23.

Constitutional Law - Topic 6822.1

Provincial jurisdiction (s. 92) - Direct tax­ation within the province - What con­sti­tutes indirect taxation - The executrix of an estate asserted that probate fees pre­scribed by regulation under the Adminis­tration of Justice Act were an indirect tax and were constitutionally invalid - The Supreme Court of Canada stated that a tax would be indirect if the executor was personally liable for payment of probate fees, as the intention would clearly be that the executor would recover payment from the benefici­aries of the estate - When the amount is paid out of the estate by the executor in his representative capacity with the inten­tion that the estate should bear the burden of the tax, the probate fees fall within the definition of direct tax - See paragraphs 25 to 27.

Statutes - Topic 5363

Operation and effect - Delegated legisla­tion - Regulations - Validity of - Scope of authority to make - The Administration of Justice Act, s. 5(c), authorized the Lieu­tenant Governor-in-Council to make a regulation prescribing probate fees - Reg. 293/92 enacted ad valorem escalating probate fees - The executrix of an estate submitted that the regulation was invalid - She argued that only a fixed probate fee was authorized - In addition, she argued that the regulation was a revenue-generat­ing device and therefore, invalid - The Supreme Court of Canada held that the regulation was unconstitutional and ultra vires - The probate fee was in reality a tax and was not authorized by s. 5 of the Admin­istra­tion of Justice Act - See para­graphs 38 to 42.

Cases Noticed:

Lawson v. Interior Tree Fruit and Veg­etable Committee of Direction, [1931] S.C.R. 357, refd to. [para. 7].

Allard Contractors Ltd. et al. v. Coquitlam (District) et al., [1993] 4 S.C.R. 371; 160 N.R. 249; 35 B.C.A.C. 241; 57 W.A.C. 241; 109 D.L.R.(4th) 46; 85 B.C.L.R.(2d) 257; 19 Admin. L.R.(2d) 1; 18 M.P.L.R.(2d) 1, refd to. [paras. 14, 67].

Ontario Home Builders' Association et al. v. Board of Education of York Region et al., [1996] 2 S.C.R. 929; 201 N.R. 81; 93 O.A.C. 241, refd to. [paras. 14, 67].

Cotton v. R., [1914] A.C. 176 (P.C.), refd to. [para. 26].

R. v. National Fish Co., [1931] Ex. C.R. 75, refd to. [para. 31].

Agricultural Products Marketing Act, R.S.C. 1970, Farm Products Marketing Agencies Act, S.C. 1972, Farm Products Marketing Act, R.S.O. 1970, Re, [1978] 2 S.C.R. 1198; 19 N.R. 361; 84 D.L.R.(3d) 257, refd to. [para. 34].

Air Canada and Pacific Western Airlines Ltd. v. British Columbia, [1989] 1 S.C.R. 1161; 95 N.R. 1, refd to. [para. 46].

Reference Re Secession of Quebec, [1998] 2 S.C.R. 217; 228 N.R. 203, refd to. [para. 54].

Hodge v. R. (1883), 9 App. Cas. 117 (P.C.), refd to. [para. 63].

Shannon v. Lower Mainland Dairy Prod­ucts Board, [1938] A.C. 708 (P.C.), refd to. [para. 63].

Irving Oil Ltd. et al. v. Provincial Secre­tary of New Brunswick, [1980] 1 S.C.R. 787; 31 N.R. 291; 29 N.B.R.(2d) 529; 66 A.P.R. 529, refd to. [para. 63].

Canada (Procureur général) v. Compagnie de Publication La Presse Ltée, [1967] S.C.R. 60, refd to. [para. 68].

Statutes Noticed:

Administration of Justice Act, R.S.O. 1990, c. A-6, sect. 5 [paras. 11, 38, 65].

Administration of Justice Act Regulations (Ont.), Reg. 293/92, sect. 2(1) [para. 12].

Constitution Act, 1867, sect. 53 [paras. 10, 52, 60]; sect. 54 [paras. 10, 60]; sect. 90, sect. 92 [para. 10].

Constitution Act, 1982, sect. 45 [para. 10].

Authors and Works Noticed:

Anson, William R., The Law and Custom of the Constitution (3rd Ed. 1897), Part 1, pp. 265 to 268 [para. 62].

Driedger, Elmer A., Money Bills and the Senate (1968), 3 Ottawa L. Rev. 25, p. 41 [para. 32].

Dussault, René, and Borgeat, Louis, Ad­ministrative Law: A Treatise (2nd Ed. 1989), vol. 1, p. 445 [para. 40].

La Forest, G.V., The Allocation of Taxing Power Under the Canadian Constitution (2nd Ed. 1981), pp. 72 [para. 21]; 155, 156 [para. 67].

Macdonell, Sheard and Hull, Probate Prac­tice (4th Ed. 1996), p. 188 [para. 17].

McConnell, William H., Commentary on the British North America Act (1977), pp. 105, 106 [para. 62]; 131 [para. 62]; 132 [paras. 29, 62].

Mill, John Stuart, Principles of Political Economy (1884), Book V, c. 2, generally [para. 25].

New Shorter Oxford English Dictionary on Historical Principles (1993), vol. 1, p. 928 [para. 56].

Ontario, Law Reform Commission, Report on Administration of Estates of Deceased Persons (1991), p. 286 [para. 19].

Rintoul, Margaret E., The Solicitor's Guide to Estate Practice in Ontario (2nd Ed. 1990), pp. 35, 36 [para. 17].

Small, Joan, Money Bills and the Use of the Royal Recommendation in Canada: Practice versus Principle? (1995), 27 Ottawa L. Rev. 33, pp. 40 [para. 37]; 50 [para. 35].

Counsel:

Peter W. Hogg, Q.C., Peter T. Fallis and J. Gregory Richards, for the appellant;

Tanya Lee, for the respondents;

Monique Rousseau, for the intervenor, the Attorney General of Quebec;

George H. Copely, Q.C., for the intervenor, the Attorney General of Brit­ish Columbia;

Robert J. Normey, for the intervenor, the Attorney General of Alberta.

Solicitors of Record:

Fallis, Fallis & McMillan, Durham, Ontario, for the appellant;

Attorney General of Ontario, Toronto, Ontario, for the respondents;

Monique Rousseau and André Goudreau, Sainte-Foy, Quebec, for the intervenor, the Attorney General of Quebec;

Attorney General of British Columbia, Victoria, British Columbia, for the intervenor, the Attorney General of Brit­ish Columbia;

Department of Justice, Edmonton, Alberta, for the intervenor, the Attorney General of Alberta.

This appeal was heard on April 27, 1998, before Lamer, C.J.C., L'Heureux-Dubé, Gonthier, Cory, McLachlin, Iacobucci, Major, Bastarache and Binnie, JJ., of the Supreme Court of Canada. The decision of the court was delivered in both official languages on October 22, 1998, and the following opinions were filed:

Major, J. (Lamer, C.J.C., L'Heureux-Dubé, Cory and Iacobucci, JJ., concur­ring) - see paragraphs 1 to 49;

Binnie, J., concurring in part (McLach­lin, J., concurring) - see paragraphs 50 to 57;

Bastarache, J., dissenting (Gonthier, J., concurring) - see paragraphs 58 to 69.