MACDONALD, C.J.B.C.:—This is an appeal against an absolute order for mandamus obtained by a mining company commanding the Minister of Finance to forthwith ascertain and take into consideration the acquisition costs to the Pioneer Gold Mines of B.C. Ltd., of the properties acquired by them.
By virtue of the Income Tax Act, 1932 (B.C.), c. 53, see. 6(1), el. (o) enables the Commissioner of Income Tax to make certain deductions from the mine owners’ income tax on account of depletion of the mine. This involves the fixing of the costs to the taxpayer of the acquisition of the mines which is an essential feature in arriving at the tax to be paid. The Commissioner taxed the acquisition costs to the mining company (the respondent) at $100,000. The respondent being dissatisfied with this, appealed (under the Act) to the Minister of Finance who after a full hearing of the parties concerned dismissed the appeal. The respondent thereupon appealed under subsec. (4) of the said sec. 6 to the Lieutenant Governor in Council before whom the dispute was again heard in full. The Lieutenant Governor in Council increased the acquisition costs to $200,000—a gain for the respondent. Being still dissatisfied the respondent obtained this writ of mandamus.
In my opinion it is unnecessary to consider the merits of the case. Both tribunals dealt with the question of acquisition costs, and while one or both may have been wrong it is not a ease for a mandamus. There are at least several grounds upon any one of which that course is open, for instance it is open where a tribunal has refused or failed to adjudicate and if they have so refused or failed then mandamus may be the proper remedy. The granting of a writ is a discretionary one and if the applicant has so acted as to merit no exercise of discretion his application should be refused. In this case the respondent has sought two legal remedies provided by the statutes and failed in both. They now ask for an order to affirm the direction of the first of these tribunals which heard the case. The Minister of Finance in effect is to be ordered to give a judgment different from the one he has already given and also to ignore the order in appeal from him.
The learned Judge in the tribunal of first instance it is true exercised his discretion in respondent’s favour, but without referring to the matters above-mentioned. He considered merely whether a mandamus will lie against the Crown or a Crown officer. It may be in a proper case that it would, but in my opinion there is a matter of far greater importance involved in this case, the propriety of the multiplicity of proceedings taken as well as consideration of estoppel. Moreover said subsec.
(4) declares that the appeal to the Lieutenant Governor in Council shall be final and that fact, I think, also prevents proceedings by mandamus.
The learned Judge who granted the order for a mandamus I think was in error and the appeal should be allowed.
MARTIN, J.A.:—In concurring in the opinion that mandamus does not lie in the present case I do so for the three main reasons following, which briefly put, are:—
First: That in ‘‘determining the cost . . . of any mine” (sec. 6(3)) to the Pioneer Gold Mines Co. the Minister did, in considering its claim for ‘‘an allowance for depletion or exhaustion ‘ in fact apply his mind to the question of " * acquisition costs” and therefore even if he did come to a wrong conclusion nevertheless the requirement of the statute that he ‘‘shall take into consideration the following expenditures ‘ ‘ was satisfied, and as he was in that ‘‘determination’’ acting in a judicial capacity, mandamus is not the remedy for any error that may have arisen from his ‘‘consideration’’ of the matter.
Second: By subsec. (4) an appeal is given from any decision of the Minister to the Lieutenant-Governor in Council, who, it is directed ‘ ( after hearing the parties interested, may either confirm or amend the decision of the Minister and the decision of the Lieutenant Governor in Council shall be final’’.
This confers* an unusual appeal of the most plenary and final character, in fact and law, to a special and very high tribunal, no less than the provincial representative of His Majesty in Council, which constitutes, under the B.N.A. Act, an appeal to the provincial ‘‘foot of the Throne’’, and therefore to grant a mandamus when such exceptional facilities for the determination of the whole matter have been conferred by the Legislature would be without precedent.
But not only was the appeal so conferred, but the company took advantage of it and. brought an appeal to the nominated tribunal and secured a substantial success by having the determination of the Minister "‘amended’’ by raising his allowance of $100,000 to $200,000; and no case has been cited that would warrant us in sanctioning proceedings that would enable a litigant to approbate and reprobate the jurisdiction and decision of any tribunal, much less such a very high one as that which the company deliberately invoked for adequate relief.
Third: Though to my mind there is no doubt that the said special tribunal had complete jurisdiction over the matter in controversy, yet even if it had not, the company is in no better position, as regards mandamus at least, than if it had, because the result of the company’s actions and appeal was to put that tribunal in the position of an arbitrator to which both parties formally submitted their dispute for ‘‘determination’’ and having obtained a decision, or award, thereupon, neither of them can be permitted to avoid its consequences by seeking to invoke. the jurisdiction of another and entirely distinct tribunal.
To the many cases referred to on the argument I add the very recent decision of the House of Lords in Stepney Borough Council v. John Walker c Sons Ltd. (1934) 50 T.L.R. 287; The King at the Prosecution of Evelyn Spain v. Special Corner of Income Tax [1934] Ir. 27; and Cave v. Mills, 7 H. & N. 913, at pp. 927-8 158 E.R. 740 in the last of which the Court said :—
‘“We are of opinion that both these principles apply to the present case. Indeed they are but variations of one and the same broad principle, that a man shall not be allowed to blow hot and cold—to affirm at one time and deny at another— making a claim on those whom he has deluded to their disadvantage, and founding that claim on the very matters of the delusion. Such a principle has its basis in common sense and common justice, and whether it is called ‘estoppel’, or by any other name, it is one which Courts of law have in modern times most usefully adopted.”
In the leading case of The Queen v. Churchwardens of All Saints (1876) 1 App. Cas. 611, at p. 620, Lord Chelmsford said:
“Now there appears to me to have been some little confusion upon this subject, which can easily be removed. A writ of mandamus is a prerogative writ and not a writ of right, and it is in this sense in the discretion of the Court whether it shall be granted or not. The Court may refuse to grant the writ not only upon the merits, but upon some delay, or other matter, personal to the party applying for it; in this the Court exercises a discretion which cannot be questioned.”
That language is most applicable to the present very unusual case, and as by our Court of Appeal Rule 4 it is our duty to give the judgment and make the order which ought to have been given and made below, I would also, therefore, in the exercise of my discretion upon the whole case, refuse the application for mandamus that, with respect, the learned Judge below granted upon insufficient grounds, and allow this appeal, despite the very commendable way in which respondent’s counsel presented his side of it.
McPHILLIPS, J.A. I After setting out the order for and terms of the writ of mandamus] :—Now upon the facts it is perfectly clear that the Minister of Finance did find the acquisition costs of the mine and did discharge his statutory duty in that regard.
It is convenient to here set out the pertinent statutory provisions governing the Minister of Finance in determining the acquisition costs of the mine, being clause (o) of see. 6(1) of the Income Tax Act, and it reads as follows :—
"‘Any allowance for depletion or exhaustion of a mine, except such proportional amount as may in the discretion of the Minister be allowed to be deducted from the income from the mine in any year, having regard to the anticipated life of the mine and to the total cost of the mine as determined by the Minister pursuant to the provisions of subsee. (3); and where full effect cannot be given to any such deduction in any year owing to their being no income for that year in excess of expenditures, or owing to the income in excess of expenditures being less than the deduction, the deduction or part of the deduction to which effect has not been given, as the case may be, shall, for the purpose of ascertaining the net income for the following year, be added to the amount of the deduction for that year, and be deemed to be part of that deduction, or, if there is no such deduction for that year, be deemed to be the deduction for that year, and so on for succeeding years, but no deduction shall be allowed for any year if the deduction, when added to the deductions allowed to the taxpayer on that account for any previous years, will make the aggregate amount of the deductions exceed the total cost of the mine as determined by the Minister.”
It is also convenient to here set forth subsec. (3) (a) of sec. 6 and subsec. (4) of sec. 6—all reading as follows :—
"(3) In determining the cost to any taxpayer of any mine in respect of which he claims an allowance for depletion or exhaustion under clause (o) of subsection (1), upon which cost any such allowance is to be computed, the Minister shall take into consideration the following expenditures, whether in- curred by the taxpayer or by and predecessor in title to the mine :
"‘(a) Acquisition costs incurred prior to the first day of April, 1928, together with all expenditures subsequent to the date of acquisition for exploration and development costs and any other expenses which the Minister may consider as directly related to and forming part of the cost of the mine, subject, in the case of any mine which was in active production prior to the first day of January, 1915, to a deduction therefrom of an amount to be determined by the Minister as representing the amount of depletion or exhaustion (if any) actually sustained prior to the first day of January, 1915 : Provided that any sum representing the cost to the taxpayer of the acquisition of any mine in excess of the total expenditures and allowances included in this clause shall not, unless incurred prior to the first day of April, 1928, be included in the total cost upon which the allowance for depletion or exhaustion is computed, unless the predecessor in title of the taxpayer has paid income tax at the rates provided in the " Taxation Act’ or in this Act on an amount of proceeds received by him from the disposition of the mine equal to the amount of such excess, or the taxpayer assumes liability for the payment of an amount equivalent to such income tax in a form and on terms satisfactory to the Minister. Where the taxpayer assumes liability for the payment of the tax in respect of the amount of the excess, the Minister in his descretion may permit the same to be paid in instalments, one instalment to be payable for each year during which ore is removed from the mine ; and in determining the amount of the instalment payable for any fiscal year the Minister shall have regard to the anticipated life of the mine and to the total amount of the liability so assumed; and the amount of instalment payable for any year shall for all purposes of this Act be deemed to be taxes of the taxpayer duly assessed and taxed for that year in respect of the mine in addition to all other taxes payable under this Act, and shall be deemed to be due and payable on the last day of that fiscal year. . . .
"‘(4) An appeal from any decision of the Minister under clause (m), (n), (0), (p) or (q) of subsection (1) may be taken to the Lieutenant Governor in Council, who, after hearing the parties interested, may either confirm or amend the decision of the Minister, and the decision of the Lieutenant- Governor in Council shall be final.’’
The facts show that the Minister of Finance in plain pursuance of his statutory duty did fix the acquisition costs of the mine at $100,000 and an appeal was taken under the existent statute law by the company to the Lieutenant Governor in Council and it was decided on the appeal that the acquisition costs be increased by $100,000 more than that allowed by the Minister of Finance—that is the Lieutenant Governor in Council, following the hearing of the appeal, fixed the acquisition costs at $200,000.
With the appeal had and taken and considering the existent statute law—it would occur to me that it is idle to contend that any case could be made out for the issue of a writ of mandamus. In saying this I do so with the greatest respect for the learned trial Judge who thought otherwise. Having chosen to appeal, it would seem to me that it is unanswerable in the face of the statute law, viz., as above set forth.
"(4) An appeal from any decision of the Minister under clause (m), (n), (0), (p) or (q) of subsection (1) may be taken to the Lieutenant Governor in Council, who, after hearing the parties interested, may either confirm or amend the decision of the Minister, and the decision of the Lieutenant Governor in Council shall be final.’’
This appeal was very ably presented and argued by learned counsel on both sides, but, with every deference to counsel and the industry displayed in the citation of the authorities thought to be relevant, I cannot refrain from saying that it is not a ease for the application of cases—but the plain application of the constraining and compellable statute law. I can quite see that for certainty sake the Legislature was desirous of settling at an early date what the acquisition costs should be allowed at—as otherwise the Income Tax Act could not be speedily implemented and the taxes arrived at—as against a large body of taxpayers coming within the purview of the Act—mining being a very considerable industry in the Province of British Columbia—and contributing large sums to the revenue of the Province and the acquisition costs being once settled are settled: for all time and as set forth in the Act "‘the decision of the Lieutenant Governor in Council shall be final.’’ After all the Legislature is the highest Court in the land when legislating within its constitutional powers—and here under the B.N.A. Act, sec, 92(2), "‘Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes’’ and ‘‘ (13) Property and Civil Rights in the Province’’, is the statutory authority exercised.
The company invoking by way of appeal the action of the Lieutenant Governor in Council must, in my opinion, be held to be concluded and bound by the result of that appeal.
I would allow the appeal.
Macdonald, J.A.:—Appeal from an order of a writ of mandamus to the Minister of Finance commanding him to ascertain the acquisition cost to Pioneer Gold Mines of B.C. Ltd. of the properties acquired by it under an agreement of March 30, 1928, as directed by the Income Tax Act, sec. 6. The property was acquired from David Sloan for the consideration of $1,600,000 paid by the allotment of 1,600,000 fully paid shares of the company at $1 a share. This it was submitted was, if not an undervaluation, the real acquisition cost of the property to the company. Sloan acquired the property under a working bond on July 16, 1924, for $100,000 and the Minister fixed this amount, paid by a predecessor-in-title, as the real acquisition cost to the company when it purchased from Sloan in 1928. He decided, rightly enough, that the issue of any special number of shares might not indicate actual cost and because the property was originally acquired by Sloan, representing a syndicate, and the syndicate in effect merely transferred their holdings to a new company, substantially the acquistion cost to the latter was $100,000.
We are not on the question of law arising concerned with his logic or the accuracy of his findings of fact. The point is— did he address his mind to the problem of ascertaining acquisition cost to Pioneer Gold Mines of B.C. Ltd. or merely to the cost to Sloan, a predecessor in title, a subject he was not concerned with under the wording of the Act? Mr. Clark recognized that from his viewpoint it was essential to show that the Minister did not in fact, or in substance, 4 ‘take into consideration’’, as required in express terms by sec. 6(3) the acquisition cost to the company.
The evidence and the decision of the Minister was fully reviewed by counsel. Without referring to it in detail my conclusion is that the Minister did direct his mind to the proper point, viz., acquisition cost to the company and decided, rightly or wrongly, that under the special circumstances the best indicia of actual cost was found in the amount paid by Sloan for the working bond. He might be entirely wrong in this conclusion
—I think he was—but at least he applies his mind to the real point in issue. Nor, as a matter of law, are we affected by the fact that he may have overlooked a new element, viz., additional claims transferred to the company not included in the Sloan option or, rightly or wrongly, concluded that evidence of value in respect of them was not conclusive. We are not concerned with possible errors in findings of fact. He cannot be directed to make a finding that $1,600,000 in shares or any other sum represent the real acquisition cost to the company. If in fact he exercised bona fide the discretion given the Courts cannot interfere. There must of course be a real hearing directed to the point in issue not to some other point, e.g., the cost to a predecessor. If his mind was directed to the latter point as an end in itself then the Minister never entered upon the real inquiry.
"This conclusion may be drawn from decided cases, that there is no refusal to hear and determine unless the tribunal or authority has in substance shut its ears to the application which was made to it, and has determined upon an application which was not made to it.”’
Rex v. Port of London Authority, Ex. p. Knoch Ltd. [1919] 1 K.B. 176, at p. 183.
In Rex v. Board of Education [1910] 2 K.B. 165, at p. 179, Farwell, L.J. said :
"" If the tribunal has exercised the discretion entrusted to it bona fide, not influenced by extraneous or irrelevant considerations, and not arbitrarily or illegally, the Courts cannot interfere; they are not a Court of Appeal from the tribunal, but they have power to prevent the intentional usurpation or mistaken assumption of a jurisdiction beyond that given to the tribunal by law, and also the refusal of their true jurisdiction by the adoption of extraneous considerations in arriving at their conclusion or deciding a point other than that brought before them, in which cases the Courts have regarded them as declining jurisdiction. ‘ ‘
That the Minister, however mistakenly, acted bona fide I have no doubt. Consideration too of the $100,000 paid for the working bond in its relation to the determination of the cost to the ultimate purchaser, was not extraneous or irrelevant.
The question, however, is settled beyond doubt inasmuch as appellant, not satisfied with the decision of the Minister, exercised its right of appeal to the Lieutenant Governor in Council under subsec. (4) of sec. 6. This appeal was successful to the extent of a $100,000 increase in the amount allowed, showing again that attention was,necessarily directed to the point in issue, viz., cost to the company; not to the predecessor in title. By this subsection the decision of the Lieutenant Governor in Council is final. Appellant, although invoking the right to appeal, now contends that it was in fact nugatory—that there is under the Act no appeal from a decision fixing once and for all acquisition costs. I think there was a right of appeal. The Minister acts, in arriving at a decision under sec. 6(1) (o) pursuant to, or in accordance with, directions given in subsec. (3) and an appeal from any decision by the Minister under sec. 6(1) (o) is given by subsee. (4).
It follows that by vesting authority in the Minister to determine acquisition costs subject to appeal to the Lieutenant Governor in Council the legislation in itself * 4 made provision for working out the system specified in that Act’’ and that the prerogative writ of mandamus is not available, assuming that otherwise it might be resorted to (Rex v. London Assessment Committee [1907] 2 K.B. 764, at p. 782). Even ‘‘assuming that there is no right of appeal, that fact does not necessarily lead us to the conclusion that a mandamus ought to issue, for the Legislature may well have provided that which it intended to be a sufficient and convenient remedy” (p. 786). Here once the right of appeal to the council is established, the matter ends as the decision of that body is final.
The conclusion is clear. There was no refusal, or conduct amounting to a refusal, on the part of the Minister to exercise the jurisdiction conferred to determine the real point in dispute and for any error a convenient remedy by way of appeal was provided.
I would allow the appeal.
MCQUARRIE, J.A. (dissenting) :—I would dismiss the appeal.
I am of opinion that the Minister did not determine the acquisition costs to the respondent but to its predecessor in title. I do not think that the respondent was estopped from appealing from the decision herein.
In the answer of the Minister of Finance to the writ of mandamus he said:
" " In deference to what I believe to be the reasons of the Hon. Mr. Justice D. A. McDonald for granting this Writ, I hereby further state that if the basis for determining the said acquisition costs were not a matter for my personal judgment, but that I am legally bound to rule that the acquisition costs consisted of the value which the shares given in consideration for the said mine acquired after the said Pioneer Gold Mines of B.C. Ltd. had received title to the said properties, then I would find the said acquisition costs of the said properties were the sum of $1,600,000.”
Counsel for the Minister during his argument stated that the Minister did not wish to rely on technicalities but desired a decision on the merits.
I consider that the acquisition costs should be fixed at $1,600,000.
Appeal allowed.