Pratte, J.:—Ms. Lloyd and Ms. Burns, we do not need to hear you. We are all of opinion that this appeal must fail.
The appellant Svend Krag-Hansen is the sole shareholder of the other appellant, Krag-Hansen Enterprises Ltd., a company incorporated under the laws of British Columbia which, pursuant to a direction made by the Minister of National Revenue under subsection 247(2) of the Income Tax Act (S.C. 1970-71-72, c. 63, as amended), was deemed to be associated with certain other companies for the taxation years 1980 and 1981. Their appeal is directed against a judgment of the Trial Division dismissing an application that they had made pursuant to sections 24 and 52 of the Canadian Charter of Rights and Freedoms for an order declaring
(1) that subsections 247(2) and (3) of the Income Tax Act infringe their rights under the Charter and
(2) that, as a consequence, the direction issued by the Minister of National Revenue with respect to the corporate appellant is of no effect.
The contention of the appellants is that the direction made by the Minister pursuant to subsection 247(2) deprived them of their “right to life, liberty and security of the person” within the meaning of section 7 of the Charter and was not made in accordance with the principles of fundamental justice. According to the appellants, the Minister's directive, as well as the statutory provisions under which it was made, violate those principles of fundamental justice in two respects:
(1) in that paragraph 247(2)(a) is so vague and uncertain that it cannot be regarded as law, and
(2) in that, under subsection 247(3), the taxpayer appealing from an assessment made pursuant to a direction of the Minister may contest only part of that direction.
In order to dispose of those contentions, it is not necessary to rule on the appellant's contention that the obligation to pay income tax at a higher rate infringes on a taxpayer's liberty within the meaning of section 7 of the Charter, nor is it necessary to decide whether certainty of the law is a necessary ingredient of fundamental justice. Indeed, even if those two questions were resolved in the appellant’s favour, their appeal should still be dismissed since, in our opinion, paragraph 247(2)(a) is not vague and subsection 247(3) affords the taxpayer a full opportunity to contest the whole of the Minister's decision.
The appellants’ submission on the vagueness of paragraph 247(2)(a) is based on their interpretation of that provision according to which the Min- ister has to determine whether the separate existence of the corporations was for the purpose of carrying out business in a manner that the Minister himself considers to be the most effective. That interpretation is wrong. Under that paragraph, the Minister must determine whether those who were responsible for the separate existence of the corporations had, as their sole purpose, the intention that the business of the corporations be carried out in what they considered to be the most effective manner. If paragraph 247(2)(a) is given that interpretation, it cannot be said to be vague or uncertain.
As to the appellants’ contention that the right of appeal under subsection 247(3) does not enable the taxpayer to fully challenge the direction of the Minister, it is based on a misinterpretation of subsection 247(2). Indeed, the appellants construe that subsection as requiring the Minister to base his directive on two distinct determinations: first, the Minister would have to satisfy himself, as required by paragraph 247(2)(a), that the separate existence of the corporation is not solely for the purpose of carrying out the business of the corporation in the most effective manner, and, second, he would have to satisfy himself, as required by paragraph 247(2)(b) that one of the main reasons for the separate existence of the corporation is to reduce the amount of taxes payable under the Act. In our opinion, the two paragraphs of subsection 247(2) require the Minister to make what is in substance only one determination, namely that the existence of the various corporations is not solely for the purpose of carrying out business in the most effective manner because one of the main reasons for the existence of separate corporations is to reduce the amount of tax payable under the Act.
For those reasons, the appeal will be dismissed with costs.
Before parting with this matter, we wish to mention that the manner in which the proceedings were commenced in the Trial Division has not escaped our attention. Normally, under the Rules, a proceeding for declaratory relief under section 18 of the Act must be brought by way of an action rather than by way of a motion (see Rule 603). In view of our conclusion, it is not necessary for us to determine whether that requirement applies to a proceeding made under section 24 of the Charter.
Appeal dismissed.