R. v. Doer (D.), (1999) 133 Man.R.(2d) 161 (QB)

• Judge: Steel, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: February 01, 1999
• Jurisdiction: Manitoba
• Citations: (1999), 133 Man.R.(2d) 161 (QB)

R. v. Doer (D.) (1999), 133 Man.R.(2d) 161 (QB)

MLB headnote and full text

Temp. Cite: [1999] Man.R.(2d) TBEd. FE.015

Her Majesty The Queen (appellant) v. David Doer (respondent)

(CR 97-01-19071)

Indexed As: R. v. Doer (D.)

Manitoba Court of Queen's Bench

Winnipeg Centre

Steel, J.

February 1, 1999.

Summary:

The accused was charged with 35 counts of selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act. The accused operated a tobacco store in Ontario, which solicited mail orders for cigarettes from Manitoba residents. All non-Ontario purchasers sent in order forms designating the accused as their attorney for the purposes of purchasing cigarettes in Ontario. The accused was acquitted on 32 counts because the trial judge was not sat­isfied that the Crown proved beyond a rea­sonable doubt that the cigarettes involved had been marked for sale in Ontario (i.e., that the cartons were marked for sale in Ontario). The accused was acquitted of the remaining three counts on the basis that there was no "sale" given the agency rela­tionship. The Crown appealed.

The Manitoba Court of Queen's Bench allowed the appeal in part. The court affirmed acquittal on 32 counts for failure to prove the cigarettes were marked for sale in Ontario, because the trial judge's finding was reasonably supported by the evidence. How­ever, the court substituted convictions on the remaining three counts. The cigarettes involved in those counts were marked for sale in Ontario, were sold by the accused to Manitoba consumers and the sale occurred in Manitoba, not Ontario. The court held that s. 97.1 did not infringe upon the province's property and civil rights power and did not violate s. 121 of the Constitution Act.

Constitutional Law - Topic 2506

Determination of validity of statutes or Acts - General principles - Seeking inter­pretation which avoids invalidity - The Manitoba Court of Queen's Bench stated that "it is the duty of the court in cases involving the constitutionality of statutes to declare them valid, if possible ... Thus judicial restraint should be a governing precept. This judicial restraint may be expressed in terms of a 'presumption of constitutionality in favour of the legislation at issue' ... This presumption carries three legal consequences: (1) 'in choosing between competing, plausible characteriz­ations of a law, the court should normally choose that one that would support the validity of the law'; (2) 'where the validity of a law requires a finding of fact ..., that finding of fact need not be proved strictly by the government; it is enough that there be a "rational basis" for the finding; (3) 'where a law is open to both a narrow and a wide interpretation, and under the wide interpretation the law's application would extend beyond the powers of the enacting legislative body, the court should "read down" the law so as to confine it to those applications that are within the power of the enacting legislative body.'" - See para­graphs 98 to 99.

Constitutional Law - Topic 5670

Federal jurisdiction (s. 91) - Regulation of trade and commerce - Interprovincial trade (incl. provincial import tax) - The accused was charged with selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act - The accused submitted that s. 97.1 violated s. 121 of the Constitution Act, 1867 (interprovincial trade) - The Manitoba Court of Queen's Bench held that s. 97.1 did not violate s. 121 - Section 121 was aimed at taxes in the nature of custom duties or trade regulations whose purpose related to provincial boundaries - In this case, the tax was not a charge on goods as a condition of entry - A provision re­specting the taxing of a product at the place of sale did not violate s. 121 - There was no ulterior purpose (forcing western provinces to lower tobacco tax rates to help combat smuggling) - See paragraphs 119 to 137.

Constitutional Law - Topic 5761

Federal jurisdiction (s. 91) - Taxation - General - The accused was charged with selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act - The accused submitted that s. 97.1 was ultra vires the federal govern­ment, because it intruded upon the provin­cial power over property and civil rights under the Constitution Act, 1867 - The Manitoba Court of Queen's Bench held that s. 97.1 was intra vires the federal government - The pith and substance of s. 97.1 was to protect the federal govern­ment's ability to collect taxes imposed on tobacco - Section 97.1 was remedial - It prohibited the evasion of taxes imposed by the Act - Any incidental effect on prop­erty and civil rights was irrelevant - There was no ulterior motive in enacting s. 97.1 and it was rationally and functionally related to the purpose of the Excise Tax Act - See paragraphs 100 to 118.

Constitutional Law - Topic 7284.1

Provincial jurisdiction (s. 92) - Property and civil rights - Regulatory statutes - Regulation of smuggling - [See Constitu­tional Law - Topic 5761 ].

Sales and Service Taxes - Topic 3842

Tobacco tax - Offences and penalties - Contraband, possession, sales, etc. - The accused was charged with 35 counts of selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act - The accused was acquitted on 32 counts (involving cartons of cigarettes) because the trial judge was not satisfied that the Crown proved beyond a reasonable doubt that the cigarettes involved had been marked for sale in Ontario in accordance with the Ontario Tobacco Tax Act and Regulations (s. 21(2)) - There was evi­dence that individual packages were marked for sale in Ontario, but no cred­ible evidence as to how the cartons were marked - The Crown submitted that the considerable corroborative evidence made the trial judge's finding unreasonable - The Manitoba Court of Queen's Bench dis­missed a Crown appeal on the ground that the verdict was not unreasonable or unsup­ported by the evidence - The trial judge did not err in finding that the Crown failed to prove an essential element of the offence beyond a reasonable doubt - See paragraphs 28 to 56.

Sales and Service Taxes - Topic 3842

Tobacco tax - Offences and penalties - Contraband, possession, sales, etc. - The accused was charged with 35 counts of selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act - The accused operated a tobacco store in Ontario, which solicited mail orders for cigarettes from Manitoba resi­dents - All non-Ontario purchasers sent in order forms designating the accused as their attorney for the purposes of purchas­ing cigarettes in Ontario - The accused was acquitted on three counts on the basis that the agency relationship precluded a finding that a "sale" occurred - The Mani­toba Court of Queen's Bench substituted con­victions - The accused was a buyer for resale, not an agent - The signing of the power of attorney was a sham to avoid the consequences of the Act - Substance had precedence over form to achieve the pur­poses of the Act where such interpretation was consistent with the wording and ob­jective of the Act as a whole - See para­graphs 57 to 75.

Sales and Service Taxes - Topic 3842

Tobacco tax - Offences and penalties - Contraband, possession, sales, etc. - The accused was charged with 35 counts of selling manufactured tobacco marked for sale in Ontario to a consumer in any other province, contrary to s. 97.1 of the Excise Tax Act - The accused operated a tobacco store in Ontario, which solicited mail orders for cigarettes from Manitoba resi­dents - All non-Ontario purchasers sent in order forms for the purposes of purchasing cigarettes in Ontario - The accused sub­mitted that the sale took place entirely in Ontario; that the transaction was complete when he delivered the cigarettes to the Ontario post office for delivery to Manito­ba consumers - The Manitoba Court of Queen's Bench rejected the postal delivery rule and held that the sale occurred in Manitoba - Given the advertising in Man­itoba, the orders from Manitoba and deliv­ery to Manitoba, there was a real and substantial link between the offence and Manitoba and the "sale" could be said to have occurred in Manitoba - See para­graphs 76 to 93.

Sales and Service Taxes - Topic 3842

Tobacco tax - Offences and penalties - Contraband, possession, sales, etc. - [See Constitutional Law - Topic 5670 and Topic 5761 ].

Cases Noticed:

R. v. Multitech Warehouse (Manitoba) Direct Inc. and McKenna (1995), 102 Man.R.(2d) 141; 93 W.A.C. 141; 100 C.C.C.(3d) 153 (C.A.), leave to appeal refused (1996), 198 N.R. 399; 110 Man.R.(2d) 160; 118 W.A.C. 160 (S.C.C.), refd to. [para. 30, Appendix].

R. v. Fast (M.) (1996), 113 Man.R.(2d) 52; 131 W.A.C. 52 (C.A.), refd to. [para. 31, Appendix].

R. v. Corbett, [1975] 2 S.C.R. 275; 1 N.R. 258; 14 C.C.C.(2d) 385, refd to. [para. 31, Appendix].

R. v. Burns (R.H.), [1994] 1 S.C.R. 656; 165 N.R. 374; 42 B.C.A.C. 161; 67 W.A.C. 161; 89 C.C.C.(3d) 193; 29 C.R.(4th) 113, refd to. [para. 55].

Aberdeen Railway Co. v. Blaikie Brothers (1854), 1 Macq. 461, refd to. [para. 65, Appendix].

Corporation Notre-Dame de Bon-Secours v. Quebec (Communaute Urbaine) et autres, [1994] 3 S.C.R. 3; 171 N.R. 161; 63 Q.A.C. 161; 95 D.T.C. 5017, refd to. [para. 72, Appendix].

Stubart Investments Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 536; 53 N.R. 24; 84 D.T.C. 6305, refd to. [para. 72].

R. v. Greyeyes (E.R.) (1997), 214 N.R. 43; 152 Sask.R. 294; 140 W.A.C. 294; 116 C.C.C.(3d) 334 (S.C.C.), refd to. [para. 75].

R. v. Bigelow (1982), 69 C.C.C.(3d) 204 (Ont. C.A.), leave to appeal refused (1982), 45 N.R. 534 (S.C.C.), refd to. [para. 84, Appendix].

R. v. Trudel; Ex parte Horbas and Myhaluk, [1969] 3 C.C.C. 95 (Man. C.A.), leave to appeal refused [1969] S.C.R. ix, refd to. [para. 86, Appendix].

R. v. McKenzie (W.) Securities Ltd. et al., [1966] 4 C.C.C. 29 (Man. C.A.), refd to. [para. 88, Appendix].

R. v. Libman, [1985] 2 S.C.R. 178; 62 N.R. 161; 12 O.A.C. 33; 21 C.C.C.(3d) 206, refd to. [para. 89, Appendix].

Benson and Hedges (Canada) Ltd. et al. v. British Columbia (Attorney General) (1972), 27 D.L.R.(3d) 257 (B.C.S.C.), refd to. [para. 98, Appendix].

Nova Scotia Board of Censors v. McNeil, [1978] 2 S.C.R. 662; 19 N.R. 570; 25 N.S.R.(2d) 128; 36 A.P.R. 128; 84 D.L.R.(3d) 1, refd to. [para. 98, Appen­dix].

Whitbread v. Walley et al., [1990] 3 S.C.R. 1273; 120 N.R. 109; 77 D.L.R.(4th) 25; [1991] 2 W.W.R. 195; 52 B.C.L.R.(2d) 187, refd to. [para. 101, Appendix].

City National Leasing Ltd. v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332; 58 D.L.R.(4th) 255, refd to. [para. 110].

Friends of the Oldman River Society v. Canada (Minister of Transport and Min­ister of Fisheries and Oceans), [1992] 1 S.C.R. 3; 132 N.R. 321; [1992] 2 W.W.R. 193; 88 D.L.R.(4th) 1, refd to. [para. 111, Appendix].

Alberta Natural Gas Tax Reference, [1982] 1 S.C.R. 1004; 42 N.R. 361; 37 A.R. 541; 136 D.L.R.(3d) 385, refd to. [para. 111, Appendix].

Canada (Attorney General) v. Alberta (Attor­ney General) et al. (1992) - see Reference Re Goods and Services Tax.

Reference Re Goods and Services Tax, [1992] 2 S.C.R. 445; 138 N.R. 247; 127 A.R. 161; 20 W.A.C. 161; [1992] 4 W.W.R. 673, refd to. [para. 112, Appen­dix].

Papp v. Papp et al., [1970] 1 O.R. 331 (C.A.), refd to. [para. 115].

R. v. Zelensky, [1978] 2 S.C.R. 940; 21 N.R. 372, refd to. [para. 115].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181; 138 D.L.R.(3d) 1; 18 B.L.R. 138, refd to. [para. 115].

R. v. Johnson et al., [1994] 3 S.C.R. 965; 174 N.R. 321; 76 O.A.C. 241; 94 C.C.C.(3d) 385, refd to. [para. 115].

R. v. Laba - see R. v. Johnson et al.

Gold Seal Ltd. v. Dominion Express Co. (1921), 62 D.L.R. 62 (S.C.C.), refd to. [para. 127, Appendix].

Atlantic Smoke Shops Ltd. v. Conlon and Canada (Attorney General), [1943] 3 W.W.R. 113 (P.C.), refd to. [para. 128, Appendix].

Murphy v. Canadian Pacific Railway (1958), 15 D.L.R.(2d) 145 (S.C.C.), refd to. [para. 129, Appendix].

R. v. People's Wine & Spirit Brokers (1917), 10 Alta. L.R. 535 (C.A.), refd to. [Appendix].

Voyager Petroleums Ltd. v. Vanguard Petroleums Ltd., [1982] 2 W.W.R. 36; 47 A.R. 14 (Q.B.), refd to. [Appendix].

Poitras v. R. (1972), 6 C.C.C. 559 (Man. C.A.), affd. (1973), 12 C.C.C.(2d) 337 (S.C.C.), refd to. [Appendix].

Preston v. R. (1949), 93 C.C.C. 81 (S.C.C.), refd to. [Appendix].

MacKay (Eddy) Building Co. and MacKay v. Nova Scotia (Attorney General) (1982), 52 N.S.R.(2d) 495; 106 A.P.R. 495 (T.D.), refd to. [Appendix].

Magann v. Auger (1901), 31 S.C.R. 186, refd to. [Appendix].

R. v. Bermuda Holdings Ltd. (1969), 9 D.L.R.(3d) 595 (B.C.S.C.), refd to. [Appendix].

R. v. Dawood, [1976] 1 W.W.R. 262 (Alta. C.A.), refd to. [Appendix].

Holwell Securities Ltd. v. Hughes, [1974] 1 All E.R. 161 (C.A.), refd to. [Appen­dix].

Saskatchewan (Attorney General) v. Canada (Attorney General), [1949] A.C. 110 (P.C.), refd to. [Appendix].

Bank of Toronto v. Lambe (1887), 12 App. Cas. 575 (P.C.), refd to. [Appen­dix].

Reference Re Alberta Accurate News and Information, [1939] A.C. 117 (P.C.), refd to. [Appendix].

Alberta (Attorney General) v. Canada (Attorney General) - see Reference Re Alberta Accurate News and Information.

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1995] 3 S.C.R. 199; 187 N.R. 1; 127 D.L.R.(4th) 1, refd to. [Appendix].

R. v. Pickering, [1996] 6 W.W.R. 291 (Man. Prov. Ct.), refd to. [Appendix].

Voigts v. Saskatchewan Government In­sur­ance et al., [1993] 6 W.W.R. 329; 108 Sask.R. 313 (Q.B.), refd to. [Appendix].

Black & Co. v. Law Society of Alberta, [1989] 1 S.C.R. 591; 93 N.R. 266; 96 A.R. 352; [1989] 4 W.W.R. 1, refd to. [Appen­dix].

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

R. v. Helfenstein, [1981] 5 W.W.R. 571 (Alta. Prov. Ct.), refd to. [Appendix].

Anti-Inflation Act, Re, [1976] 2 S.C.R. 373; 9 N.R. 541, refd to. [Appendix].

Canadian Pacific Airlines Ltd. and Pacific Western Airlines Ltd. v. British Colum­bia, [1989] 1 S.C.R. 1133; 96 N.R. 1, refd to. [Appendix].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120; [1990] 2 W.W.R. 193, refd to. [Appen­dix].

R. v. Milne, [1992] 1 S.C.R. 697; 135 N.R. 202; 125 A.R. 135; 14 W.A.C. 135; [1992] 3 W.W.R. 97; 85 Alta. L.R.(2d) 257; 12 C.R.(4th) 175; 70 C.C.C.(3d) 481, refd to. [Appendix].

R. v. Smith (J.J.) (1992), 59 O.A.C. 390; 77 C.C.C.(3d) 182 (C.A.), refd to. [Appendix].

Reference Re Validity of Section 5(a) of Dairy Industry Act (Margarine Case), [1949] S.C.R. 1; [1949] 1 D.L.R. 433, affd. [1950] 4 D.L.R. 689; [1951] A.C. 179 (P.C.), refd to. [Appendix].

British Columbia (Attorney General) v. Canada (Attorney General), [1937] A.C. 377 (P.C.), refd to. [Appendix].

R. v. Williams (1982), 66 C.C.C.(2d) 234 (Ont. C.A.), refd to. [Appendix].

R. v. Morgentaler, [1993] 3 S.C.R. 463; 157 N.R. 97; 125 N.S.R.(2d) 81; 349 A.P.R. 81, refd to. [Appendix].

Neuman v. Minister of National Revenue (1998), 225 N.R. 190 (S.C.C.), refd to. [Appendix].

Statutes Noticed:

Constitution Act, 1867, sect. 121 [para. 119].

Criminal Code, R.S.C. 1985, c. C-46, sect. 476 [para. 83].

Excise Tax Act, R.S.C. 1985, c. E-15, sect. 97.1 [para. 76].

Tobacco Tax Act Regulations (Ont.), Reg. 1034, sect. 21(2), sect. 21(3), sect. 21(4) [para. 34].

Authors and Works Noticed:

Black's Law Dictionary (5th Ed. 1979) [para. 53, Appendix].

Bowstead on Agency (15th Ed. 1985), generally [Appendix]; pp. 21 [para. 66]; 159 [para. 65].

Hogg, Peter W., Constitutional Law of Canada (3rd Ed. 1992), pp. 15 to 20 [Appendix]; 376 [para. 100]; 384 [para. 102]; 390 [para. 99]; 405 [para. 111].

Magnet, Joseph E., Constitutional Law of Canada: Cases, Notes and Materials (4th Ed.), vol. 1, p. 350 [para. 119].

Rose, V. Gordon, Parties to an Offence (1982), generally [Appendix].

Counsel:

Darrin Davis and Tracey Harwood-Jones, for the Crown/appellant;

Ron Schmalcel, for the accused/respondent.

This appeal was heard before Steel, J., of the Manitoba Court of Queen's Bench, Win­nipeg Centre, who delivered the following judgment on February 1, 1999.