The King v. Chappelle / The King v. Carmack / The King v. Tweed

The King v. Chappelle / The King v. Carmack / The King v. Tweed
Collection
Supreme Court Judgments
Date
1902-11-18
Report
(1902) 32 SCR 586
Judges
Strong, Samuel Henry; Taschereau, Henri-Elzéar; Sedgewick, Robert; Girouard, Désiré; Davies, Louis Henry
On appeal from
Federal Court of Appeal
Subjects
Mines and minerals
Decision Content
Supreme Court of Canada
The King v. Chappelle And The King v. Carmack And The King v. Tweed (1902) 32 SCR 586
Date: 1902-11-18
His Majesty The King (Respondent)
Appellant
And
William Chappelle (Suppliant)
Respondent
His Majesty The King (Respondent)
Appellant
And
George W. Carmack (Suppliant)
Respondent
His Majesty The King (Respondent
Appellant
And
James Tweed And Charles Woog (Suppliants)
Respondents
1902: Oct. 23, 24, 27; 1902: Nov. 18.
Present:—Sir Henry Strong C.J. and Taschereau, Sedgewick, Girouard and Davies JJ.
Leave to appeal to the Privy Council his been granted.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Mining law—Royalties—Dominion Lands Act—Publication of regulations—Renewal of license—Payment of royalties—Voluntary payment—R. S. C., c. 54, ss. 90, 91.
The Dominion Government, by regulations made under The Dominion Lands Act, may validly reserve a royalty on gold produced by placer mining in the Yukon though the miner, by his license, has the exclusive right to all the gold mined. Taschereau and Sedgwick JJ. dissenting.
The "exclusive right" given by the license is exclusive only against quartz or hydraulic licensees or owners of surface rights and not against the Crown. Taschereau and Sedgwick JJ. dissenting. The provision in sec. 91 of the Dominion Lands Act that regulations made thereunder shall have effect only after publication for four successive weeks in the Canada Gazette means that the regulations do not come into force on publication in the last of the four successive issues of the Gazette but only on the expiration of one week therefrom. Thus where they were published for the fourth time in the issue of September 4th they were not in force until the 11th and did not affect a license granted on September 9th.
Where regulations provided that failure to pay royalties would forfeit the claim, and a notice to that effect was posted on the claim and served on the licensee, payment by the latter under protest was not a voluntary payment.
One of the regulations of 1889 was that "the entry of every holder of a grant for placer mining had to be renewed and his receipt relinquished and replaced every year."
Held, per Girouard and Davies JJ., Sedgewick J. dissenting, that the new entry and receipt did not entitle the holder to mine on the terms and conditions in his original grant only but he did so subject to the terms of any regulations made since such grant was issued.
The new entry cannot be made and new receipt given until the term of the grant has expired. Therefore, where a grant for one year was issued in December, 1896, and in August, 1897, the renewal license was given to the miner, such renewal only took effect in December, 1897, and was subject to regulations made in September of that year.
Regulations in force when a license issued were shortly after cancelled by new regulations imposing a smaller royalty.
Held, that the new regulations were substituted for the others and applied to said license.
Judgment of the Exchequer Court [(7 Ex. C. R. 414) Reversed in part.*
Appeals from judgments of the Exchequer Court of Canada[1], in favour of the suppliants.
The respective suppliants by petition of right sought to recover from the Crown the amounts paid under protest for royalties on the products of their placer mining operations in the Yukon Territory. The several grounds on which they claimed that the royalties were illegally exacted were as follows:— In Chapelle's case, that the regulations imposing the payment of royalties were not published for four successive weeks in the Canada Gazette.
In all the cases, that when the royalties were exacted the licenses under which the suppliants operated were renewals of the original grant and not subject to regulations made since said grant issued; that the licenses gave the miners the exclusive right to all the proceeds realized from their claims and the regulations could not derogate from the grant; and that while the licenses were in force the regulations governing them (if they did govern them) were cancelled by new regulations which could not apply as they were made subsequent to the grant and the old regulations could not as they did not exist.
In the Exchequer Court judgment was given for each of the suppliants for the amount claimed. The Crown appealed.
The Attorney General for Canada and H. S. Osier, K. C. for the appellant. The publication was complete on insertion in the fourth issue of the Gazette. Coe v. Township of Pickering[2].
The payment was voluntary and could not be recovered back. See Bain v. City of Montreal[3]; Ex parte Lewin[4]; Benjamin v. County of Elgin[5]; Langley v. Van Allen[6].
As to the regulations that affect a renewal, see Smylie v. The Queen[7]. And see Dalloz, vo. "Mines."
Armour K.C. and J. Travers Lewis for the respondents. The license to mine gave the miners the property in the minerals taken out. See Gowan v. Christie.[8]; Duke of Sutherland v. Heathcote[9]; Osborne v. Morgan[10]. Bainbridge on Mines p. 288.
The grant is a lease from year to year and the terms are in force as long as it is renewed. Bulmer v. The Queen[11]. Preston on Conveyancing, pp. 76-77.
As to the right of the Crown to make regulations taking away the miners' property, see Les Ecclésiastiques de St: Sulpice v. City of Montreal[12]; and for the primary meaning of "royalty," Mercer v. Attorney General for Ontario[13].
THE CHIEF JUSTICE.—I am of opinion that the appeal in the case of The King v. Chapelle should be allowed and the Petition of Eight dismissed as to the sum of $1,637; that the appeal should be dismissed as to the sum of $10,429, and that there should be no costs of the principal appeal to either party. Further that the cross-appeal should be allowed with costs.
In the case of The King v. Carmack, I am of opinion that the appeal should be allowed and the Petition of Right dismissed with costs, the Crown to have the costs of the appeal.
In the case of The King v. Tweed and Woog, I am of opinion that the appeal should be allowed with costs and the Petition of Right dismissed with costs.
TASCHEREAU J. (dissenting).—As I view this case (The King v. Chappelle), it is not a complicated one.
By the two licenses of 1897 the Crown, for consideration, granted to the respondent for one year, not only the exclusive right of entry upon the mining claims therein described, but also, in express terms, the exclusive right to all the proceeds realised therefrom during that year, in accordance with both the regulations of 1889 (sec. 23,) and the regulations of the 21st of May, 1897, (secs, 17 and 23,) then in force.
The Crown now contends that these documents do not mean what they say, and that the respondent was not entitled to the exclusive right to all the proceeds he realised from the said mining claim, though that was the right granted to him in so many words. That contention is based upon the ground that the grant was made subject to the provisions of the mining regulations, by which regulations, as amended on the 29th of July, 1897, a royalty was imposed upon the proceeds of the said mining claims and was therefore, as it is contended, due by the respondent and rightly collected by the Crown. In my opinion, that contention cannot prevail.
Assuming that the Crown had the right to reserve or impose a royalty in the respondent's said licenses, it did not do so. And I cannot accede to the proposition that, having expressly granted all the proceeds of the mines without restriction, such a wide construction should be given to the words "subject to the mining regulations" as to give to the Crown the right to derogate from that grant or cut it down entirely. What is subject to the mining regulations? The exclusive right to all and every particle of gold taken from the claim. It cannot be implied, in my opinion, that by reserving the right to regulate the grant to all the gold extracted the Crown, thereby, reserved the right to curtail or diminish the grant itself, nay, to extinguish it in whole or in part.
By section thirty-seven of the regulations of the 18th of January, 1898, a royalty is now specially reserved, and in all licenses issued thereafter the grant is made upon the express condition that the royalty prescribed by the regulations shall be paid, (so by section thirty-seven of the regulations of March, 1901,) but the respondent's licenses contain no such restriction.
Though, previous to the issue of the respondent's licenses, the said royalty had been imposed, yet the regulation giving all the gold to the licensee without restriction and the form of the license itself to that effect were then left in force. And though it may well be argued that the regulation imposing such royalty should be taken as an amendment to the previously existing ones, yet if the Crown, notwithstanding its right to impose it, contracted with the respondent that it would not do so, but that he would have the exclusive right to all the gold extracted from his claim, as theretofore, I cannot see upon what ground those contracts can be construed as not granting to the respondent, according to their unambiguous terms, the right to all that gold, exclusive from the grantor; for the word "exclusive" therein must extend to the Crown. The Crown cannot be permitted to contend, it seems to me clear, under the most elementary rules on the construction of contracts, that, as this one reads, the exclusive right of the grantee to the thing granted admits of the right of the grantor to diminish or take away the thing granted. The power to regulate implies the continued existence of that which is to be regulated. The City of Toronto v. Virgo[14].
The words "subject to the mining regulations" must be construed as if followed by the words "not inconsistent with the grant of the exclusive right to all the minerals." A grant implies a contract not to revoke or impair the grant. It is a transfer of all the rights of the grantor implying a covenant by him not to reassert those rights in any shape or form. Any reservation by the grantor to the contrary must appear in clear and unambiguous terms. Here the Crown, by claiming the royalty in question, seeks to revoke pro tanto the grant to the respondent. Is that regulating it?
It is pleaded for the Crown, in the statement of defence, that if these licenses are to be construed as not imposing this royalty upon the respondent, they have then been issued improvidently and were ultra vires of the Gold Commissioner. Now, so to repudiate the Act of the Gold Commissioner, after having acted upon it and treated these grants as in full force till this petition of right was brought in, is, I am sure, a position that will not be insisted upon on the part of the Crown, assuming it to be well founded in law and open to the Crown in this case.
Then, under our statutes, it must not be lost sight of, the rule respondeat superior applies with as much force almost between subject and the Crown as between subject and subject. It was under these licenses exclusively that the Crown claimed the right to this royalty; it was under these licenses that this royalty was paid and received, and, if they did not entitle the Crown to the said royalty, if it was therefore illegally imposed upon the respondent, the moneys he paid should be refunded to him. The Commissioner had to issue those licenses as they read. The regulations by the Crown obliged him to do so. How then can it be contended that he acted ultra vires and that the respondent was a trespasser upon this property and is not entitled to a particle of the gold he extracted therefrom?
It is further contended on the part of the Crown that even if the money has been illegally collected under these licenses, yet the Crown is entitled to keep it because, the respondent being an alien, the grant to him is void. I am not surprised that the Attorney-General refrained from relying at bar upon that part of the Crown's factum.
As to the contention that the money has been paid voluntarily, I would not interfere with the finding of fact of the Exchequer Court upon this part of the case. The respondent had no option but to pay or be ejected.
I would dismiss the appeal with costs. The cross appeal I would allow with costs. As to the two other cases, I am bound by the judgment of the court in the Chappelle Case and do not dissent.
SEDGEWICK J.—One William Chappelle, one George W. Carmack and James Tweed and Charles Woog, each filed a petition of right in the Exchequer Court to obtain the relief therein asked. These petitions were heard together, and judgment given in the suppliants' favour. The Crown appeals from these judgments.
The importance of the present appeals is enhanced by the fact that there are upwards of 54 other similar Petition-of-Right suits—a number of which have received the fiat and been filed—involving like claims aggregating upwards of $300,000. The determination of these other cases, for the sake of avoiding multiplicity of suits it has been agreed between the Crown and the several suppliants, shall depend on the final decision in these three cases now in appeal, the documentary evidence being admittedly the same, and the law common to all.
The litigants mentioned are all pioneer miners of 1896—relatively few in number—the gold in the Klondike having been first discovered by the Suppliant Carmack on 17th August, 1896.
There are no disputed facts and hence no conflict of evidence. The Crown called no witnesses, and adduced no documentary evidence in defence, except some title papers produced by the suppliants. These cases turn, therefore, principally upon the true construction of the suppliants' grants and upon the proper interpretation of the various mining regulations in force in the Yukon, coupled with the evidence of the suppliants and their witnesses.
All evidence—oral and documentary—adduced in any of the three cases, was by agreement at the trials made evidence in all.
The suppliants oppose the Crown's appeal, and cross-appeal against the reference permitted by the judgment of the Exchequer Court—the suppliants contending that they should have judgment absolutely without any reference.
The case of Chappelle v. The King is reported in 7 Exchequer Court Reports, at page 414, where some of the arguments in the Court below are shortly stated—the judgment of Mr. Justice Burbridge being printed at pp. 427 et seq. of the report.
Part of the judgment of the Exchequer Court, now appealed against by the Crown, is expressed in the head-note of the reported case[15], as follows:—
The Suppliant by right of discovery, under the provisions of The Dominion Lands Act and The Dominion Mining Regulations of 1889 made thereunder, obtained a grant of a certain gold mining claim in the Yukon district in December, 1896. His grant, inter alia, gave him, for the term of one year from its date, the exclusive right to all the proceeds realized therefrom; and the rights which it conferred upon him were, it was declared, those laid down in The Dominion Mining Regulations, and no more, and were subject to all the provisions thereof whether the same were expressed in the grant or not. During the currency of the original grant, an order-in-council was passed making grants of gold mining claims in the district generally subject to a royalty. Afterwards, namely, on the 7th December, 1897, the snppliant's grant was renewed in the same terms as those expressed in the original grant.
Held, that the terms of the renewal should be construed by reference to their meaning in the original grant; and that the renewal was not subject to the royalty imposed by the order-in-council. The operative words of the order-in-council imposing the royalty were "a royalty shall be levied and collected.
Held, that the expression quoted contained apt words for the imposition of a tax, but that such a tax could not be levied without legislative authority therefor.
The evidence showed that the suppliant had paid the amount of the royalty claimed by the Crown under protest, and in the belief that payment was necessary to protect his rights.
Held, that he was entitled to recover it back.
Before the trials in the Exchequer Court, counsel for the Crown and for the suppliant Chappelle agreed upon a chronological statement which will prove useful for reference in considering the following facts.
The material facts in Chappelle's case, and the legislation and documentary evidence upon which it is based, may be stated, in somewhat abridged form, as follows:—
By the British North America Act, 1867, sec. 146, the Queen, with the advice of the Imperial Privy Council, was authorized to admit the North-western Territory into the Canadian Union, on address from both Houses of the Canadian Parliament,
on such terms and conditions as are in the addresses expressed and as the Queen thinks fit to approve, subject to the provisions of this Act.
Accordingly, by Imperial order-in-council of the 23rd June. 1870, it was ordered
that from and after the 15th day of July, 1870, the North-western Territory shall be admitted into and become part of the Dominion of Canada, upon the terms and conditions set forth in the first hereinbefore recited address, and that the Parliament of Canada shall, from the day aforesaid, have full power and authority to legislate for the future welfare and good government of the said Territory.
The joint Address of the Senate and House of Commons of Canada of December, 1867, upon the terms and conditions whereof the North-western Territory was admitted into and became part of Canada is scheduled to this Imperial order-in-council, and recites (amongst other things) that the development of the mineral wealth which abounds in the Northwest, and the extension of commercial intercourse through the British possessions in America from the Atlantic to the Pacific, are alike dependent on the establishment of a stable government for the maintenance of law and order in the North-western Territories,
and prays Her Majesty
to unite Rupert's Land and the North-western Territory with this Dominion, and to grant to the Parliament of Canada authority to legislate for their future welfare and good government; and we most humbly beg to express to Your Majesty that we are willing to assume the duties and obligations of government and legislation as regards these Territories, (and) that in the event of Your Majesty's Government agreeing to transfer to Canada the jurisdiction and control over the said region, the Government and Parliament of Canada will be ready to provide that the legal rights of any corporation, company, or individual within the same shall be respected, and placed under the protection of courts of competent jurisdiction.
By the Revised Statutes of Canada, ch. 22, sec. 4, it is enacted that
the Minister of the Interior shall have the control and management of all Crown Lands which are the property of Canada.
By sec. 3 of The Dominion Lands Act, Revised Statutes of Canada, 1886, ch. 54, the said Act is made applicable
to the public lands included in Manitoba and the several Territories of Canada;
and, by sec. 47, it is enacted that:—
47. Lands containing coal or other minerals, whether in surveyed or unsurveyed territory, shall not be subject to the provisions of this Act respecting sale or homestead entry, but shall be disposed of in such manner and on such terms and conditions as are, from time to time, fixed by the Governor-in-Council, by regulations made in that behalf.
Accordingly, by regulations known as "The Dominion Mining Regulations," approved by order-in-council of 9th November, 1889, it is provided, by sec. 1, that said regulations "shall be applicable to all Dominion lands containing gold, silver, &c.;" while sec. 2 of these regulations of 1889 provides that:— 2. Any person or persons may explore vacant Dominion lands, not appropriated or reserved by the Government for other purposes, and may search therein, either by surface or subterranean prospecting, for mineral deposits, with a view to obtaining under these regulations a mining location for the same; but no mining location, or mining claim, shall be granted until actual discovery has been made of the vein, lode or deposit of mineral or metal within the limits of the location or claim.
Then, by sec. 4 of these regulations of 1889, it is further provided that:—
4. Any person having discovered a mineral deposit may obtain a mining location therefor under these regulations, &c.
After providing, by clause (b) that the miner having marked out on the ground the location he desires, shall within sixty days file a declaration with the Dominion Lands Agent, and pay a fee of $5.00, sec. 4, s.s. (c), provides as follows:—
(c). The agent, upon such payment being made, shall grant a receipt according to the form B in the schedule to these regulations. This receipt shall authorize the claimant, his legal representatives or assignees, to enter into possession of the location applied for; and subject to its renewal from year to year as hereinafter provided, during the term of five years from its date, to take therefrom and dispose of any mineral deposit contained within its boundaries provided that during each of the said five years after the date of such receipt he or they shall expend in actual mining operations on the claim at least one hundred dollars, &c.
Then, by sec. 17 of these regulations of 1889, it is provided:
17. The regulations hereinbefore laid down in respect of quartz-mining shall be applicable to placer mining, so far as they relate to entries, entry fees, assignments, marking of locations, agents' receipts, and generally where they can be applied, save and except as otherwise herein provided.
The following further sections of the regulations of 1889 are also of importance on this appeal:—
Sec. 19. The forms of application for a grant for placer mining, and the grant of the same, shall be those contained in Forms H and I in the schedule hereto. Sec. 20. The entry of every holder of a grant for placer minin must be renewed and his receipt relinquished and replaced every year, the entry fee being paid each time.
Sec. 23. Every miner shall, during the continuance of his grant, have the exclusive right of entry upon his own claim, for the miner-like working thereof, and the construction of a residence thereon, and shall be entitled exclusively to all the proceeds realized therefrom; but he shall have no surface rights therein; and the Superintendent of Mines may grant to the holders of adjacent claims such right of entry thereon as may be absolutely necessary for the working of their claims, upon such terms as may to him seem reasonable.
Sec. 25. A claim shall be deemed to be abandoned and open to occupation and entry by any person when the same shall have remained unworked on working days by the grantee thereof for the space of seventy-two hours, unless sickness or other reasonable cause be shown, or unless the grantee is absent on leave.
Sec. 26. A claim granted under these regulations shall be continuously and in good faith worked, except as otherwise provided, by the grantee thereof or by some person on his behalf.
Sec. 77. Any miner or miners shall be entitled to leave of absence for one year from his or their diggings, upon proving to the satisfaction of the Superintendent of Mines, that he or they have expended on such diggings, in cash, labour, or machinery, an amount of not less than $200 on each of such diggings without any return of gold or other minerals in reasonable quantities for such expenditure.
It will be observed that there is no provision in the Dominion Mining Regulations reserving any royalty whatever. Yet it is noteworthy that the corresponding (but earlier) Mining Regulations governing Indian Lands, dated 15tn September, 1888 (printed in Bligh's Orders-in-Council, p, 199), from which these Dominion Mining Regulations of 1889 were otherwise practically copied, do provide for a reservation of a royalty to the Crown of four per cent as follows:
Sec. 81. The patent for a mining or mineral location shall reserve to the Crown, forever, a royalty of four per cent on the sales of the products of all mines therein, in trust for the Indians interested in the lands patented.
But the Dominion Mining Regulations of 1889, now under consideration, omit all reference to a royalty of any kind, and do not reserve or provide for any such payment.
By Order-in-Council of 24th December, 1894, the length of the creek claims in the Yukon District was increased to 500 feet, and the fee to be charged for an entry for a claim was increased to $15; and the Dominion Mining Regulations of 9th November, 1889, were thereby made applicable in all other respects to the Yukon District.
As will be seen by reference to Chappelle's own evidence, the suppliant Chappelle went into the Yukon country in the spring of 1896, and ultimately staked Fractional Claim No. 3 A below "Discovery" on Hunker Creek in that year, under the above Dominion Mining Regulations of 1889, made applicable to the Yukon by the above mentioned order-in-council of 24th December. 1894.
Chappelle says that he had to go 75 miles to record this claim at Fort Cudahay, at the Government offices in charge at headquarters of Captain Constantine of the North-west Mounted Police. Constantine, accordingly, on the 7th December, 1896, issued a grant to Chappelle, in the form of Schedule I to the Dominion Mining Regulations of 1889, for this Fractional Claim on Hunker Creek of 185 feet. This 1896 grant of No. 3-A Lower Hunker is filed as an Exhibit. It read as follows:—
No. 370. Form I.
GRANT FOR PLACER MINING.
DEPARTMENT OF THE INTERIOR,
DOMINION LANDS OFFICE,
YUKON AGENCY. 7th December, 1896.
In consideration of the payment of five and a-half dollars, being the fee required by the provisions of the Dominion Mining Regulations, sections 4 and 20, by William Chappelle, of Dawson, accompanying his application No. 370, dated 7th December, 1896, for a mining claim in the Throndik Mining Division of the Yukon District, more particularly described as Fractional Mining Claim No. 3-A below "Discovery" on Hunker Creek, in the aforesaid Mining Division, said claim being 185 feet or so.
The Minister of the Interior hereby grants to the said William Chappelle, for the term of one year from the date hereof the exclusive right of entry upon the claim for the miner-like working thereof and the construction of a residence thereon, and the exclusive right to all the proceeds realized therefrom.
The said William Chappelle shall be entitled to the use of so much of the water naturally flowing through or past his claim, and not already lawfully appropriated, as shall be necessary for the due working thereof, and to drain his claim, free of charge.
This grant does not convey to the said William Chappelle any surface rights in the said claim, or any right of ownership in the soil covered by the said claim; and the said grant shall lapse and be forfeited unless the claim is continuously and in good faith worked by the said William Chappelle, or his associates.
The rights hereby granted are those laid down in the aforesaid Mining Regulations, and no more, and are subject to all the provisions of the said regulations, whether the same are expressed herein or not.
C. CONSTANTINE,
Agent of Dominion Lands.
About three months previous to this, one Louis Emkins, on the 9th September, 1896, similarly obtained from Captain Constantine a grant of a claim of 500 feet in length, known as claim No. 7 on Eldorado Creek (in form also as provided by schedule I of the 1889 r gulations), which original grant is in precisely the same terms—mutatis mutandis—as Chappelle's grant of of No. 3-A Lower Hunker, printed above.
Louis Emkins sold an undivided half interest in this claim No. 7 on Eldorado to the suppliant Chappelle and the ten per cent royalty tax was subsequently collected from Chappelle, on 16th July, 1898, in respect of $104,290 of gold mined in 1897-8 on this claim, as well as on the $16,370 of gold mined on the claim he had himself staked on Hunker Creek. No. 3-A, Lower Hunker.
In May, 1897, the Governor decided to issue a new set of regulations governing placer mining in the Yukon. The section of the Dominion Lands Act (Revised Statutes of Canada, ch. 54, above quoted) enabling regulations to be thus made, had been amended in 1892,[16] since the issue of the 1889 regulations, and then read (in 1897) as follows:
Lands containing coal or other minerals * * * shall not be subject to the provisions of this Act respecting sale or homestead entry, but the Governor-General-in-Council may, from time to time, make regulations for the working and development of mines on such lands, and for the sale, leasing, licensing, or other disposal thereof. * * *
Accordingly, new regulations governing placer mining in the Yukon were promulgated, dated 21st May, 1897, the publication of which, under sec. 91 of the Act, was completed on the 9th July, 1897.
These new regulations of 1897 were in terms substituted, so far as placer mining were concerned, for the regulations of 1889 (under which the suppliants had previously obtained grants) but the form of the grant (schedule I) was not altered thereby, and (by the last clause of the new regulations of May, 1897) it was expressly provided that
if any cases arise for which no provision is made in these regulations, the provisions of the regulations governing the disposal of mineral lands other than coal lands, approved by His Excellency on the 9th November, 1889, shall apply.
The 1889 regulations were thus kept alive.
No provision was made in these new regulations of 1897 for either the imposition or the reservation of a royalty, and its material sections are practically the same as those relating to Placer Mining in the original regulations of 1889.
As an important example, sec 8 of the new regulations is identical with sec. 19 of the regulations of 1889, as follows:
8. The forms of application for a grant for placer mining and the grant for the same shall be those contained in forms H and I in the schedule hereto. And, again, sec. 14 of the new regulations is likewise identical with sec. 20 of the 1889 regulations, thus:
14. The entry of every holder of a grant for placer mining must be renewed and his receipt relinquished and replaced every year, the entry fee being paid each time.
The new regulations also repeated the provisions of section 23, of the regulations of 1889, by providing in section 17 that;—
Every miner shall, during the continuance of his grant, have the exclusive right of entry upon his own claim, for the miner-like working thereof and the construction of a residence thereon, and shall be entitled exclusively to all the proceeds realized therefrom.
It will be remembered that the 1896 grant for Claim No. 7 on Eldorado Creek was issued on the 9th September, 1896, and hence had to be renewed on or before 9th September, 1897,—while the other grant in question herein, for Fractional Claim No. 3-A on Lower Hunker, had similarly to be renewed before the 7th December, 1897.
But, before the arrival of these dates, namely, on 29th July, 1897, the Government passed an order-in-council purporting to impose a royalty tax on all gold mined in the Yukon. This order-in-council was framed in apt words for the imposition, levy, and enforced collection of a tax of ten per cent on the gold itself, and, in some circumstances, of twenty per cent; but without any antecedent legislative authority, as is now admitted.
The material clauses of this order-in-council of 29th July, 1897, purporting to impose the tax in question, are as follows:—
That upon all gold mined on claims referred to in the regulations for the governance of placer mining along the Yukon River and its tributaries, a royalty of ten per cent shall be levied and collected by officers to be appointed for the purpose, provided that the amount mined and taken from a single claim does not exceed $500 per week; and, in case the amount mined and taken from any single claim exceeds $500 per week, there shall be levied and collected a royalty of ten per cent upon the amount so taken out up to $500, and upon the excess or amount taken from any single claim over $500 per week, there shall be levied and collected a royalty of twenty per cent, such royalty to form part of the consolidated revenue, and to be accounted for by the officers who collected the same in due course;
That the times and manner in which such royalty shall be collected, and the persons who shall collect the same shall be provided for by regulations to be made by the Gold Commissioner, and that the Gold Commissioner be and he is hereby given authority to make such regulations and rules accordingly;
That default in payment of such royalty, if continued for ten days after notice posted upon the claim in respect of which it is demanded, or in the vicinity of such claim, by the Gold Commissioner or his agent, shall be followed by cancellation of the claim;
That any attempt to defraud the Crown by withholding any part of the revenue thus provided for, by making false statements of the amount taken out, may be punished by cancellation of the claim in respect of which fraud or false statements have been committed or made;
And that in respect of the facts as to such fraud or false statement, or non-payment of royalty, the decision of the Gold Commissioner shall be final.
JOHN J. McGEE,
Clerk of the Privy Council.
But before the spring wash-up in 1898, the Government decided to repeal all existing placer mining regulations (including the order imposing the royalty tax), and to issue a new and amended set of regulations. Accordingly, this was done by order of the 18th January, 1898, which enacted that the placer mining regulations
established by order-in-council, dated 21st May, 1897, and subsequent orders of the Governor-in-Council, shall be and the same are hereby cancelled, and the following regulations * * * substituted in lieu thereof.
These new regulations did not become effective by publication until the 11th March, 1898. Their most important provisions, which are relevant or material. to the present issues, are that by section 37, the rights of miners under mining grants are modified, by making the same—for the first time—subject to the payment of royalty. Sec. 37, of these new regulations of 1898, reads as follows:–
37. Every free-miner shall, during the continuance of his grant, have the exclusive right of entry upon his own claim for the miner like working thereof, and the construction of a residence thereon, and shall be entitled exclusively to all the proceeds realized therefrom, upon which however the royalty prescribed by these regulations shall be payable. (The words in italics are new).
These new 1898 regulations also, for the first time, altered the form of mining grant, to correspond with foregoing sec. 37; and thus for the first time providing by contract for payment by the grantee of the royalty.
As already mentioned, these new 1898 regulations in terms repealed the 1897 order purporting to impose the royalty tax; and, by secs. 30 and 31, purported to impose instead a straight tax of 10 per cent on all gold mined, and thus abandoned the more excessive 20 per cent tax provided for in the repealed 1897 order. These new 1898 regulations, secs. 30 and 31 (under which, be it noted, the royalty in question herein was subsequently collected from the suppliant Chappelle and from the other 1896 miners), read as follows:—
(30). A royalty of ten per cent on the gold mined shall be levied and collected on the gross output of each claim. The royalty may be paid at banking offices to be established under the auspices of the Government of Canada, or to the Gold Commissioner, or to any Mining Recorder authorized by him. The sum of $2,500 shall be deducted from the gross annual output of a claim when estimating the amount upon which royalty is to be calculated, but this exemption shall not be allowed unless the royalty is paid at a banking office or to the Gold Commissioner or Mining Recorder.
When the royalty is paid monthly or at longer periods, the deductions shall be made ratable on the basis of $2,500 per annum for the claim. If not paid to the bank, Gold Commissioner or Mining Recorder, it shall be collected by the customs officials or police officers when the miner passes the posts established at the boundary of a district. Such royalty to form part of the consolidated revenue, and to be accounted for by the officers who collect the same in due course. The time and manner in which such royalty shall be collected shall be provided for by regulations to be made by the Gold Commissioner.
(31). Default in payment of such royalty, if continued for ten days after notice has been posted on the claim in respect of which it is demanded, or in the vicinity of such claim by the Gold Commissioner or his agent, shall be followed by cancellation of the claim. Any attempt to defraud the Crown by withholding any part of the revenue thus provided for, by making false statements of the amount taken out, shall be punished by cancellation of the claim in respect of which fraud or false statements have been committed or made. In respect to the facts as to such fraud or false statements or non-payment of royalty, the decision of the Gold Commissioner shall be final.
It will be observed that this new tax of ten per cent was, as formerly, on the gold itself. It might be paid to the bank; but, if not
it shall be collected by the customs officials or police officers when the miner passes the posts established at the boundary of a district.
The tax thus collected was to form part of the consolidated revenue, and the method of collection was to be provided by regulations to be made by the Gold Commissioner. The consequence of default in payment— after ten days notice of demand had been posted on or in the vicinity of any mining claim by the Gold Commissioner or his agent—was the cancellation or forfeiture of the claim itself—the decision of the Gold Commissioner to be final.
As has been observed, in 1898 there admittedly existed no legislative authority or Act of Parliament which, directly or indirectly, authorized or justified the imposition or collection of such a tax.
It ought to be here added that these new placer mining regulations of 1898 (effective, as we have seen, on 11th March, 1898) also took care to provide, by sec. 40, that:— 40. If any cases arise for which no provision is made in these regulations, the provisions of the Regulations governing the disposal of Mineral Lands other than coal lands, approved by His Excellency the Governor-in-Council on the 9th November, 1889, or such other regulations as may be substituted therefor, shall apply;
thus perpetuating and keeping alive the old 1889 regulations under which the miners got their original grants.
Yet one important fact admittedly stands out clearly, namely, that the original order purporting to impose the royalty tax in the first instance in September, 1897, was effectively cancelled and repealed by the Order and Regulations of March, 1898, before anything was ever done under it. Not a dollar was. ever collected under the 1897 order, which was thus repealed in 1898, before the spring wash-up of that year. The collection of the ten per cent royalty tax, complained of in these suits, was in all cases made under and by virtue of secs. 30 and 31 of the 1898 regulations— which could not, by any conceivable construction, be made to apply to the then current renewal grants, issued in 1897.
Meanwhile, during the winter working season of 1897-8, Chappelle had mined a large quantity of gold bearing gravel from both his Eldorado and Hunker Creek claims, which he subsequently sluiced and washed up, in the early summer of 1898, realizing from his Hunker Fraction $16,370 (in gross), and from the Eldorado Claim $104,290.
It will be remembered that, up to the spring of 1898, Captain Constantine, of the North-west Mounted Police, had been the chief executive officer of the Government in the Yukon region, and had, with Gold Commissioner Fawcett, administered law and justice throughout the Territory. During the summer of 1898, however, Major Walsh (who had arrived at Dawson on 21st May, 1898), was appointed by order-in-council as
Chief Executive Officer of the Government of the Yukon Territory, to be known as the Commissioner of the Yukon Territory, "with the fullest authority over all the officials in the various departments of the Government," and "in full command of the North-west Mounted Police Force," with "power to vary, alter, or amend any mining regulations issued under the authority of His Excellency-in-Council governing the granting of mining claims, where such change may, in his opinion, be necessary in the public interest.
This order appointing Commissioner Walsh also made provision that the Commissioners should make a full report to the Minister; and this Major Walsh did, on the 15th August, 1898.
In this report, Major Walsh mentions that
Gold Commissioner Fawcett had reported that little royalty could be collected this year (1898), owing to the best paying claims being renewed under the old regulations, and that the mines which were being worked under the new regulations would be unable to pay royalty, as their expenses would be greater than their output this year. Under these circumstances, Major Walsh continues, it appears to me that my place was at the coast, where so many matters had to be attended to.
Again, the government's chief executive officer reports as follows:
On arrival at Dawson (21st May, 1898), I found a great many questions awaiting solution, which could only be disposed of by the authority of the commissioner. For instance, the question of royalty, over which there had been considerable discussion, appeared to be somewhat mixed. I immediately announced that royalty would be collected on all claims the leases of which were renewed subsequent to the date when the law came into force. Nearly all the leaseholders of the larger prospected claims showed a disposition to respect the collection of royalty. Others, however, were not so tractable; their principal objection being that their leases were granted for one year; and that, once being granted, subsequent restrictions could not be placed upon them. I pointed out to the leaseholders that collection of royalty was necessary for the maintenance of courts of justice, for police protection, mail communication, and other public services. While acknowledging the force of these reasons, they submitted that a more thorough examination of the real cost of out-putting the gold would convince the Government that the royalty is a severe tax, and expressed a hope that next year would see it removed. Royalty was not collected from any claim which had not got into good working order, or which could not show a profit after paying royalty, and this would represent a large sum.
Again the Commissioner continues,
more than half the leases were exempted from royalty on account of having been renewed previous to the date of the law requiring the payment of royalty coming into force. The collection of royalty will amount to about half a million dollars.
After mentioning that the Canadian Bank of Commerce and the Bank of British North America had opened branches in Dawson City, the Commissioner continues, in his report, as follows:
Officials of any Government entering into a new and isolated district, where the people are not closely restricted by law and are free from taxation, have almost invariably met with just such an experience as we have had. The introduction and enforcement of law and taxation naturally made us unpopular with the older residents, who were unaccustomed to that sort of thing.
Parliament prorogued in 1898 on the 13th June, on which day the new Yukon Territory Act (61 Vict. ch. 6) was assented to and became law. It is here worth mentioning that, by section 8 of The Yukon Territory Act, empowering the Governer-in-Council to make ordinances for the peace, order, and good government of the Yukon Territory, it is specially provided also that
no ordinance made by the Governor-in-Council or the Commissioner-in-Council shall impose any tax.
Notwithstanding, this, however, the Government officers four days later, on 17th June, 1898, collected $1,637 for Government royalty from the suppliant Chappelle, for gold mined on his Hunker Creek Fraction, and later, on the 16th July, 1898, in like manner, collected from the suppliant Chappelle $10,429 government royalty, in respect of gold mined on Claim No. 7 on Eldorado Creek.
It will be remembered that the royalty regulations of 1898 pr6vided that the method and manner of collecting the royalty was to be prescribed by regulations to be made by the Gold Commissioner. It seems, however, that Gold Commissioner Fawcett did not promulgate any formal regulations on the subject, but he made a report thereon to Government which is printed.
Gold Commissioner Fawcett's report must be read in the light of Regulation No. 31 of 1898, which provided that
default in payment of such royalty, if continued for ten days after notice has been posted on the claim in respect of which it is demanded, or in the vicinity of such claim, by the Gold Commissioner or his agent, shall be followed by cancellation of the claim.
Accordingly, Gold Commissioner Fawcett reported that, during the summer of 1898,
notices were posted at intervals all along these creeks, through which claim-owners were informed that the royalty should be paid on the 1st and 15th of each month to the Mining Inspectors at the Forks of Eldorado, or at the Bank of Commerce in Dawson. On Hunker Creek, the miners were notified to report at the Commissioner's office, Dawson, on the 1st of each month. These reports were required, whether royalty was payable or not. On Bonanza and Eldorado, the Mining Inspectors examined the claims to ascertain if all who were working had reported. On Hunker, a policeman was appointed to that duty by Commissioner Walsh.
When a claim was found that was being worked, for which returns had not been made, a notice was posted on the claim allowing the delinquent ten days in which to report, and drawing his attention to the penalty for non-compliance, referred to in sec. 31 of the regulations governing placer mining in the Territory * * * The Commissioner (Commissioner Walsh) himself superintended to a great extent the collection of royalty.
As to valuation, I may say that one-tenth of the dust was taken as royalty. This would be the proper proportion, whatever the gold would assay, and is independent of the valuation. * * * * The collection of the royalty this year is in the hands of the North-west Mounted Police, and I think they can be depended upon to see that none are missed.
In spite of the foregoing evidence, and notwithstanding the fact that the tax was thus collected from the miners under the stress and threat of the exercise by the Gold Commissioner of the power of summarily forfeiting to the Crown the mining claims of any delinquent miners—who were without means of redress or relief in the then very remote and isolated region of the Klondike—the Crown has pleaded that Chappelle and his fellow-suppliants paid the royalty tax voluntarily, and hence cannot recover it. And this, in spite of the fact that the Gold Commissioner was not only Tax-Collector-in-Chief, but also himself the sole judicial and executive functionary empowered to cancel placer gold mining grants for non-payment of the said tax, and whose decisions thereon it was expressly provided should be conclusive and final.
The Yukon Territory Act of 1898 was subsequently amended in 1899 (62 & 63 Vict, ch. 11), whereby Parliament again affirmed by section 8 (c), "nor shall any tax be imposed except as in this Act provided," referring to municipal taxation therein mentioned.
But this was not all. After these petition-of-right suits had been tried in the Exchequer Court and judgment given for the suppliants, Parliament awakened to the necessity of legalizing the future levy of taxation of Yukon gold; and by an Act passed in 1902 (2 Edw. VII., ch. 34, sec. 3) the Yukon Territory Act of 1898 was again amended and the following new clause enacted:—
8. Subject to the provisions of this Act, the Governor-in-Council may make ordinances for the peace, order and good government of the Territory, and of His Majesty's subjects and others therein; but no such ordinance shall— (a) for the enforcement of any ordinance, impose any penalty exceeding five hundred dollars;
(b) alter or repeal the punishment provided in any Act of the Parliament of Canada in force in the Territory for any offence;
(c) appropriate any public land or other property of Canada without authority of Parliament, or impose any duty of customs or any excise;
Nor shall any fax be imposed by ordinance except as in this Act provided; Provided always that the Governor-in-Council may make ordinances—
(d) imposing a tax or royalty (not exceeding five per cent thereof) upon gold and silver the output of mines in the Territory, to be levied from and after the date of the ordinance imposing it;
(e) prescribing and regulating the place and manner of collection of such tax or royalty, and the methods of securing and enforcing the payment thereof;
(f) providing for the confiscation and forfeiture of gold and silver upon which such tax or royalty has not been duly paid, as well as for the confiscation and forfeiture of any vessel, vehicle, cart, or other receptacle containing it, or used or intended to be used for the transportation thereof;
(q) giving to any officer of the Crown, in respect of searches, examinations, and other proceedings for the enforcement of the provisions of any such ordinance, all such powers, rights, privileges, and protection as officers of customs have under the provisions of The Customs Act.
2. Every ordinance made under the authority of this section shall remain in force until the day immediately succeeding the day of prorogation of the then next session of Parliament, and no longer, unless during such session of Parliament such ordinance is approved by resolution of both Houses of Parliament.
3. Every ordinance made by the Governor-in-Council under the provisions of this Act shall have force and effect only after it has been published for four successive weeks in The Canada Gazette; and all such ordinances shall be laid before both houses of Parliament within the first fifteen days of the session next after the date thereof.
Thus, on the 15th May, 1902, or nearly four years after the illegal levy and collection of the royalty tax complained of in this action, Parliament for the first time by statute authorized taxation of this sort in the future, but took care also to provide for the present litigants by enacting, in section 6 of the above Act of 1902:—
6. Nothing in this Act or in any ordinance made thereunder shall prejudice or affect or apply to any claim, matter or suit now pending in any court of competent jurisdiction, nor to the claims of any person against the Crown heretofore made by petition of right and lodged for fiat, nor to any claim or cause of action heretofore accrued.
As an immediate result of this Act of 1902, an ordinance was passed by the Governor-in-Council the following week, dated 21st May, 1902, repealing and rescinding the obnoxious regulations in question herein, which purported without legislative authority to impose a royalty or tax on the gold mined, and instead now enacting (under the legislative authority of the 1902 Act) that an export duty of 2½ per cent ad valorem should be thereafter collected on all gold shipped away from the Yukon—and that
all ordinances or orders-in-council heretofore passed, in so far as they relate to or provide for the collection of any tax or royalty on gold mined in the Yukon Territory, or to be taken or shipped therefrom, are hereby rescinded.
In the foregoing, I have substantially stated what is contained in the suppliant Chappelle's factum, which I found, upon careful examination, contained an accurate statement both of the facts and of the statutes and regulations therein in part recited.
The pivotal fact in this case is that the levy or exaction of the 10 per cent royalty was made under the regulations of 1898, while the grants, or leases, or licenses, or by whatever name they maybe called, under which the suppliants held their original title, were made under the regulations of 1889. The instruments of title, called in the regulations of 1898 "grants," partake in part of all these characters. So far as they transfer the property in the gold when mined, they are grants. So far as they give possession or occupation for a specified term, they are in the nature of leases. And so far as they give right of entry, they are licenses; and, if licenses, irrevocable, since they are coupled with an interest. I shall describe the instrument, pursuant to the term used in the regulations, as a grant.
Now, the contention of the appellant, the Crown, in these appeals is that this grant is but a license for a year, and for one year only; that the grantee has no right to obtain, and that the Crown is under no obligation to give a renewal grant; and that, whether that be so or not, any renewal thereof must be governed, not by the regulations of 1889 under which the original grant was obtained by the miner, but on the contrary by any regulations which were in existence at the time that the renewal grant was issued or obtained.
There is not much difference of opinion as to the nature and extent of the original discovery grants issued in 1896, under the regulations of 1889. The Crown admits that any change in the regulations, made during the currency of the first or original grants, would not in any way affect the rights thereunder of the grantees respectively. One of the main questions in controversy, however, is whether the suppliants' discovery grants of 1896 were renewable grants—whether the suppliants were entitled to renew their original grants. I entertain no doubt as to their right to renew. It is unnecessary here to decide whether their right of renewal extends to five years from the date of the discovery grant, or whether it extends until the mining claim is worked out or exhausted. It must be remembered that the rights of the suppliants in this regard do not depend alone upon the terms of the grant as above set out, being form 1 of the regulations of 1889. That instrument is not the measure of their rights, inasmuch as there must be read into it, so far as necessary, the regulations of 1889 and the provisions of the parent Act, the Dominion Lands Act, under authority of which the regulations were made.
The grant, it is true, includes a license for one year, but there is nothing in it to indicate that it may not be renewed. It purports to be issued under the regulations of 1889 then subsisting; and, if these regulations provide for a renewal, then the holder is entitled to such renewal. These regulations of 1889, denominated "The Dominion Mining Regulations," were made operative in the Yukon Territory in 1894, and, in the year 1896, when the discovery grants in question herein were issued, contained the whole mining code, both with regard to quartz mining and placer mining. The regulations respecting placer mining were, subsequently, mechanically separated from the Dominion Mining Regulations of 1889, by the issue of the 1897 placer mining regulations (effective 9th July, 1897), which also however, by the concluding clause thereof, expressly kept alive the original 1889 Dominion Mining Regulations.
To my mind, a perusal of the 1889 regulations will clearly indicate the renewable character of the 1896 grants now under consideration. The general policy of the regulations, as indicated by many of their provisions, affords cogent evidence that the grantee was entitled to renew his grant. I will indicate a few of them. Before so doing, it is noteworthy that the Crown, in its defence in the Chappelle case, pleads that Chappelle was entitled to his grant for a further period, in other words, was entitled to a renewal of his 1896 discovery grant. (See also paragraph 7 of the Crown's defence). The law officers of the Crown, when delivering this defence, must then have considered that a right of renewal was part of the suppliant's contract. To particularize, however, the sections in the 1889 regulations from which a right of renewal of the grant must reasonably be implied:—
(a) Section 20 of the 1889 regulations (as well as section 14 of the 1897 placer regulations), provides that the entry of every holder of a grant for placer mining must be renewed every year, the entry fee being paid each time, otherwise the miner would lose his mining claim. The word here used is "must." It is not "may," but "must." The word "may" is facultative and permissive, but "must" is the most uncompromisingly imperative word in our language. "Shall" is even sometimes construed as futuritive only, and hence permissive; but "must" is dominant and compulsory.
(b) Section 77 of the regulations of 1889 provides that any miner shall be entitled to leave of absence for one year from his diggings, on proving an expenditure of $200 on such diggings. Does not this provision clearly contemplate an interest extending beyond one year?
(c) Then, the order-in-council of the 24th December, 1894 (making the Regulations of 1889 effective in the Yukon), recites the fact that "it takes two seasons to make a start on the work" on placer claims, the length of which is thereby increased to 500 feet. Can it be supposed for a moment that, when the Government made its regulations of 1889 effective in the Yukon in 1894, whereby all persons the world over were invited to come in and explore, and take for their own exclusive benefit, all that they could find in any mining claims discovered by and granted to them, it was intended that all that the discoverers should get, was a right to extract the gold from their mining claims for one year only? (d) Section 40 of the Regulations of 1889 enables the Minister of the Interior to grant
exclusive rights of way through and entry upon any mining ground, for any term not exceeding five years
for drainage purposes. Does not this provision necessarily contemplate that the holder is entitled to a renewal of his mining grant for a period at least co-terminous with such drainage grant?
(e) By section 45 of the regulations, the Minister is empowered to "grant to any person, for any term not exceeding five years," the right to divert water and to construct flumes and ditches, and .
every such grant shall be deemed to be appurtenant to the mining claim in respect of which it has been obtained.
The expression "claim" is defined in the interpretation clauses of the regulations as the "personal right of property in a placer grant or diggings," as distinguished from the word "location," which is there interpreted as referring only to quartz mining areas. If the Crown's contention be correct, that the regulations do not entitle the miners to a renewal of their grants as a matter of right, subject otherwise to the performance of the conditions under which the grants are held, then the minister can, under this section 45, grant an appurtenance to a placer claim for a period four years longer in duration than the life of the claim itself. The form of this flume grant, set out in the regulations, makes it appurtenant to the mining claim, and provides that the same shall cease and determine, not at the expiry of the first year's holding, but "whenever the said claim shall have been worked out."
(f) Section 17 of the 1889 regulations, which as before stated include the whole mining code both for placer and quartz mining, makes the Dominion Mining Regulations of 1889 applicable to placer mining, so far as they relate to entries, entry fees, assignments, marking of locations, agent's receipts, and generally where they can be applied,
except as therein otherwise provided. The word "entries" there includes all those things necessary to be done, both by the discoverer or applicant on the one hand, and by the mining recorder on the other, in order to entitle the applicant to a legal right to his claim. In fact, were it not for that provision, there would be no machinery at all for obtaining an entry for any placer mining claim. Section 4 previously points out how a location may be acquired, by staking (after discovery), and making the necessary affidavit and entry, and paying the fee; and then proceeds to provide that the entry shall be subject to renewal from year to year during the term of five years from its date. It is, in my view, very plain that this provision, giving the right of renewal to the quartz miner, gives the same right of renewal to the placer miner.
(g) Sec. 12 of 1897 placer mining regulations provides that
an entry fee of $15 shall be charged the first year, and an annual fee of $100 for each of the following years. This provision shall apply to locations for which entries have been already granted.
These 1897 placer mining regulations became effective on the 9th July, 1897, and the concluding words of sec. 23 thereof provide that the 1889 Dominion regulations shall still continue to apply to all cases unprovided for. Thus the 1889 regulations were perpetuated and kept alive.
(h) Sec. 23 of the 1889 regulations, as well as sec. 17 of the 1897 placer regulations, provides that
every miner shall, during the continuance of his grant, have the exclusive right of entry upon his own claim for the miner-like working thereof, and shall be entitled exclusively to all the proceeds realized therefrom. The miner's exclusive rights, therefore, subsist during the continuance of his grant. The word "continuance" is employed, not "currency" or "term" It imports a prolongation of existence, and implies that the grant might be continued, or in other words "renewed."
(i) Sec. 22 of the 1889 regulations, as also sec. 16 of the placer regulations of 1897, provides that
any miner or miners may sell, mortgage, or dispose of his or their claims provided such disposal be registered, &c.
Thus, viewed only as a mere license, it is assignable, and therefore not revocable.
(j) The form of grant for placer mining provides for a term of one year, "subject to all the provisions of the Dominion Mining Regulations," and the rights thus acquired are in terms stated to be "those laid down in the aforesaid mining regulations," which regulations, as I have before stated, must therefore be all read into the form of grant. These regulations include the foregoing provisions, which evidence the right of renewal from year to year, "until the claim shall have been worked out."
For these reasons it appears to me that the 1896 grants must be held to be renewable grants.
Assuming, however, that the miner is entitled to a renewal of his discovery grant, under what terms should he obtain it? It is elementary law that if a lease be renewable from year to year, every subsequent year is part of the same term. Shepherd's Touchstone, 270 n.(c); 3 Preston's Conveyancing, 76, 77; Legg v Strudwick[17]; Harris v. Evans[18]. Then, if a renewable lease is to be renewed, it must be renewed at the former rent, if not otherwise agreed; Doe d. Bromley v. Bettison[19], and a reservation of a rent or royalty must be made by the contract at the time of the making of the lease; Bacon's Abridgement, tit. "Rent," D. 1, 141.
But the Crown contends that the suppliant miners' future rights were cut down, during the currency of the 1896 discovery grants held by them, by the passing of the order-in-council imposing a royalty (operative if otherwise valid, on the 11th September, 1897), so as to make any renewal grants claimed by the miners in the autumn of 1896 subject to this new royalty impost. It is upon this contention alone that the Crown seeks to justify the Government in exacting from the miners, in the summer of 1898, ten per cent of the gross proceeds realized from the mining claims, during the working winter season of 1897-98, notwithstanding that, by the express terms of the miners' original and renewal grants, they were to have the exclusive right of entry upon their own claims and also the exclusive right to all the proceeds realized therefrom. In other words, the Crown's position is this: that although the Crown made a contract with a miner, by which it gave to him the exclusive right of entry upon a placer mining claim, and also the exclusive right to all the proceeds realized therefrom, yet, notwithstanding such contractual rights, the Crown is entitled to exact and deduct, in invitum, from such proceeds realized therefrom, 10 or 20 per cent thereof; or, in other words, to take possession and convert to the Crown's use whatever percentage of the gross proceeds of such mining claim the Crown may think fit to exact by promulgation of an order-in-council. But this would be equivalent to supporting confiscation or taxation under the guise of regulating the gold fields.
The placer mining regulations of 1897 (in which there is no reference to or provision for payment of any royalty) became effective by publication on the 9th July, 1897. As already mentioned, the royalty order-in-council was passed and published subsequently; and became effective, if valid, on the 11th September, 1897. If the placer regulations of 1897 are to govern the conditions upon which the 1896 discovery grants were renewable, then it is significant that these 1897 regulations themselves provided for a form of grant or license in almost exactly the same terms as the form of grant under the regulations of 1889. Hence it is found that every renewal given, after the expiration of the first year, contained in the body of the renewal itself the same specific grant to the miner of the exclusive right of entry and the exclusive right to all the proceeds realized from the claim. Even, therefore, if the renewal of the 1896 discovery grants was not obligatory, the miners at all events did renew them, in the autumn of 1897, in the only form then possible or legal, and by which form of renewal grant no royalty was reserved. Section 8 of the 1897 regulations provides that the form of a grant for placer mining shall be that contained in the schedule; thus imperatively prescribing the form of grant to be used, and leaving the Gold Commissioner no discretion in the matter.
The royalty order-in-council of 1897 did not purport to abridge or modify the then subsisting exclusive rights of the miners, by reserving a royalty to the Crown as was subsequently done in 1898, both in the regulations of that year and in the form of future grants thereby provided. The Gold Commissioner was thus bound to use the form he did, when renewing the grants in the autumn of 1897, and to do so until the form then prescribed was expressly altered or modified by apt amending regulations, as was subsequently done in 1898. It would have been ultra vires of the Gold Commissioner to have changed the imperatively prescribed form of grant in the autumn of 1897, by making it subject to a royalty, which had not then been in apt terms reserved to the Crown either by regulation or contract.
The subsequent regulations of 1898, which do not govern the renewal grants in question, whereby a royalty was specifically reserved by way of reddendum in the case of future grants, may be intra vires; but the royalty thereunder would be payable, not by virtue of any taxing power, but by reason of a contractual relationship existing between the Crown and the miners under such future grants expressly reserving a royalty. But, in so far as the royalty order of 1897 purports to limit or add a term to the original contracts between the parties, the order is ultra vires of the authority which purported to pass it, and can have no retroactive operation.
But the Crown contends also that the royalty impost by order-in-council on the 11th September, 1897, affected and attached to the suppliants' renewal grants of 1897, and must be read into the suppliants' renewal grants, because the concluding clause of the grants provides that
the rights hereby granted are those laid down in the aforesaid mining regulations, and no more, and are subject to all the provisions of said regulations, whether the same are expressed herein or not.
It is urged that these last words rendered the 1897 renewal grants subject to the royalty impost, and it is contended that there is thus an implied contract on the part of the suppliants to pay the royalty. But the earlier and operative portion of the 1897 renewals, expressly and for valuable consideration, grants to the miner both exclusive rights of entry and the exclusive right to all the proceeds realized from the mining claim; and this later and repugnant general provision should not be construed to affect or modify the earlier and specific terms of the grant itself. Generalia specialibus non derogant. The only effect of the concluding general words above quoted is to incorporate into the grant all of the regulations, consistent with the specific and operative terms of the instrument, "and no more."
Moreover, if the royalty impost of September, 1897, was in form and effect ultra vires of the authority which promulgated it, not as a reservation of a royalty but as a species of tax, then no contract on the part of the miner, to be thus implied from the above quoted concluding general words of the 1897 grant, could avail the Crown anything. The miner would only be bound by intra vires regulations, in any event; and cannot on such an alleged constructive contract render himself subject to pay royalty imposed by a regulation clearly ultra vires; Waugh v. Morris[20]; per Lord Blackburn, at page 208; Anson on Contracts (9 ed.) p. 217.
It is further contended, however, on behalf of the Crown, that these amending regulations have legislative force and effect; and that, notwithstanding the prohibition contained in the Yukon Territory Act against imposing any tax by ordinance, the Governor-in-Council had authority under section 47 of the Dominion Lands Act to effectively pass the royalty regulation in question. But that Act does not clothe these regulations with the force or effect of law; and it has been repeatedly held that unless the parent Act states either that regulations thereunder "shall have the force of law," or "shall have force or effect as if they formed part of the Act" (or like expression), such regulations can be judicially called in question, if they plainly transcend the scope of the parent Act, or if they are repugnant to the Act itself or the law of the land or if they purport to deal with matters which Parliament has prohibited; Institute of Patent Agents v. Lockwood[21]; Hardcastle's Statutory Law (3 ed.) p. 286. In certain cases (e. g., Orders-in-Council under the Extradition Acts) the statutory power provides that the validity of the statutory orders shall not be questioned in any legal proceedings whatever. But where the statute does not contain this or a similar provision, the court can canvass a regulation, and can determine whether or not it was within the power of those who made it: (per Lord Herschel, (1); Attorney General v. Sillem[22].
The Crown cannot, therefore, impose new burdens on current grants, by making or amending regulations which have not any legislative force per se. The nature of the royalty regulations of 1897 is essentially derogatory to the grants of 1896, and is not within the original contemplation of the parties. Such a regulation would have to be proved in Court like any other by-law; and it is not entitled, under the parent Act, to judicial cognizance. It is undisputed, in the present case, that the royalty order of 1897 did not even reach the Gold Commissioner at Dawson until the 29th September, 1897, before which date neither the government officers in the Yukon nor the miners themselves had any notice whatever of the passage or existence of such an impost.
Regulations having been made in 1889 under the Act, upon which grants were issued and vested rights had accrued, the Crown ceases to be a legislator quoad such grants, and becomes a contractor; and the Crown cannot afterwards purport to legislate by regulation so as to affect such contracts during their continuance, unless such right be expressly reserved: The City of Toronto v. The Canadian Pacific Railway Co.[23].
It is noteworthy that no evidence is to be found in the parent Act that Parliament intended to reserve any royalty on minerals. Section 47 is silent on this point; whereas sections 66 and 74, relating to timber berths, specifically provide for and contemplate payment of royalties, and empower the Governor-in-Council to make regulations "respecting royalties and other dues which shall be paid in connection therewith." Expressio unius, exclusio alterius. In fact, neither by the Act itself, nor by the regulations of 1889 or 1897, is there any intention apparent to reserve any royalty on minerals. The regulations of 1889 were practically copied from the earlier Indian Land Mining Regulations of 1888 [Bligh's Orders-in-Council, p. 199], which do provide, by section 81, for an express reservation of a four per cent royalty on sales of the product of mines. But this particular reservation was significently omitted from the Dominion Regulations of 1889, now under review. Again, in the new quartz regulations of 1898, sec. 53 (a) provides for payment of a royalty by way of reddendum; and, again, the Dominion Mining Regulations of 1889, now under review, themselves provide, by section 82, for payment of a five per cent royalty on quarried stone. The maxim just quoted applies here also, with added force. Further, in a license for valuable consideration, imposing mutual obligations, a right to revoke or to derogate therefrom will not be implied: Wood v. Leadbitter[24]; Guyol v. Thomson[25], where this whole subject is fully discussed.
In Bainbridge on Mines (5 ed.), 282, it is said that the license to work may be in such a form as effectually to vest in the grantee the sole and exclusive right to the minerals; and, if it appear to be the intention of the deed, whereby the license is granted, that the grantee shall be solely and exclusively entitled to work the minerals, the license will be an exclusive one, and the grantor will be precluded from afterwards abridging or derogating from the grant.
If the grantor intend to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant, founded on a maxim which is as well established by authority as it is consonant to reason and common sense, viz.: that a grantor shall not derogate from his grant: Wheeldon v. Burrows,[26] per Thesiger, L.J.
As I have already stated, if the Crown could take one-tenth of the gold as a royalty, under a regulation subsequently passed, the Crown could also (by parity of reasoning) pass the title thereto to any one else, or could grant 10 per cent, or any other per cent, of the total proceeds of a mining claim to a third person, notwithstanding that the exclusive right thereto during the continuance of the license had been already granted to the original grantee.
It was urged on behalf of the Crown in argument that these discovery grants were gratuitous and without consideration; but in my opinion the discovery in each case is, not only the root of the title (as held in the analogous case of Collom v. Manley)[27], but also one of the chief considerations for the grant, as indicated in sec. 2. of the 1889 regulations. Again, the discoverer was obliged to pay a $15 entry fee for the first year, and $100 "for each of the following years." In addition thereto, the grantee was under obligation subsequently to develop his claim, to constantly and actively occupy it, except when on leave of absence (sec 25), and to effectively work it, on pain of forfeiture by abandonment (secs. 74 and 86).
It appears clear that the 1897 renewal grants related back to the 1896 discovery grants, thus obtained for valuable considerations. In the three cases before us, the 1897 renewal grants in terms refer to the miners' applications made in 1896. There were no new applications made in 1897 on the obtaining of the renewals, and no new affidavits were required. The applicants could not purport in 1897 to rediscover their original claims. Again, the size of the original discovery claims of 1896 was 500 feet in length. On the 16th August, 1897, the length of placer claims was reduced to 100 feet by an amendment of the regulations, yet the evidence is that, when the suppliants renewed their 1896 discovery claims in the autumn of 1897, the size of the claims remained the same, viz.: 500 feet, pursuant to their original 1896 discovery grants.
As already mentioned, the first royalty order of 1897 did not purport to reserve a royalty by way of reddendum. A regulation thus purporting to impose a new burden, without the consent of the miner, is essentially a tax. In the final repeal of the royalty in 1902, it is called a tax; and up to the time of the commencement or these proceedings it has always been deemed to have been nothing but a tax, so far as I can find. It certainly contains all the characteristics and machinery for the enforced collection of taxes for the benefit of the consolidated revenue.
Adverting to the more general questions above considered, the observation of Lord Watson in Osborne v. Morgan[28] may be usefully referred to. The Court was there dealing with the Mining Act and regulations made thereunder in the Colony of Queensland, Australia, the Act in question being very similar to the Act and regulations in question here. At p. 231, Lord Watson says:
The general policy of the Act is to encourage gold mining within the Colony, by giving a certain fixity of tenure to all persons who are willing, either by virtue of a "Miner's Right," or under a lease from the Crown, to occupy Crown land for that purpose, and to work efficiently and continuously.
And, at p. 232:
"Miners' .Eights" are documents in the nature of a license, which are issued by the warden of the goldfield to any person applying for the same, and may be kept in force for ten years by his making an annual payment of the same amount for that period. The effect given to it, by the statute and regulations, is that, when the holder has by virtue of it lawfully occupied and duly worked in quest of gold a certain area of Crown land within the limits of the goldfield (called a "claim "), he thereby acquires a right to remain in undisturbed occupation of the claim, and an absolute proprietary right to all the gold which it contains, these rights being indefeasible, unless forfeited by hi3 contravention of the Act of the statutory regulations.
In Hollyman v. Noonan[29] at p. 606, the Privy Council held that
the holder of a miner's right must, during the continuance of such right, be deemed to be the owner of the claim occupied by him, and that all gold in and upon such claim must be deemed to be the absolute property of such owner.
And at p. 610, the court held also that the rights and interests of the parties to that case,
which were created before the making of the rules of 1868, or the rules of 1870, must be determined with reference to the rules of 1866, the only rules w