J. Q.B.G. A.D. J.C. R. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF REGINA BETWEEN: HUSKY OIL OPERATIONS LTD. and MINISTER OF FINANCE, PROVINCE OF SASKATCHEWAN RESPONDENT Murray W. Douglas and for the appellant Jeffrey W. Estabrooks Garry J. Moran for the respondent JUDGMENT McINTYRE J. February 5, 1996 This is an appeal by Husky Oil Operations Ltd.("Husky") from a decision of the Board of RevenueCommissioners of Saskatchewan (the "Board"). The respondent, under the provisions of The Education and Health Tax Act, R.S.S. 1978, c. E-3, as am. (the "Act") and The Department of Revenue and Financial Services Act, S.S. 1983, c. D-22.02 as am. S.S. 1988-89, c. 42, s. 29 amending the title and chapter of the Act to read The Revenue and Financial Services Act, c. R-22.01, conducted an audit resulting in the assessment of sales tax in the amount of $37,842.07. Husky appealed to theBoard which upheld the assessment. The appeal to this Court arises under s. 21 of The Revenue and Financial Services Act which provides, in part: 21(1) Subject to subsection (2), person aggrieved by decision of the board made pursuant to section 20 may appeal to the court. (11) On appeal, the facts are deemed to have been conclusively established by the findings of the board, except where question is raised on the appeal that the finding of any particular fact or facts has been made by the board on evidence which does not warrant that finding. (12) At the hearing of the appeal, the court shall hear and consider the cause based on the material which was before the board at the hearing conducted before it and on any further material or evidence that the court may, on any terms that it considers appropriate, permit. (13) The court may: (a) affirm the decision of the board; (b) amend or reverse the decision of the board insofar as it is based on any error in law; or (c) refer the matter of assessment back to the minister for reconsideration. The Board's findings of fact included the following: 2.The assessment pertains to charges incurred by the Appellant in contract with Valtek Controls Ltd. of Alberta. Valtek supplied certain valves for use at the Appellants [sic] Upgrader project located in Lloydminster Saskatchewan. The valves, meeting the definition of tangible personal property as defined in the Act, were subject to Education and Health Tax which the Appellant paid. The Appellant did not pay taxon what is referred to as "Documentation charges". 3.The charges are for documentation specifically ordered by the Appellant from Valtek and consists of Certified Dimensional Drawings which include all valve parts and part numbers in metric units. The primary function of such documentation is ongoing technical support for the valves operation, maintenance, change of parts and modifications. This documentation is not supplied with or included in the price of valves as supplied by Valtek but was provided for in response to the Appellants [sic] specific request to meet its particular requirements. 4.The valves and documentation were ordered on the same purchase order and were identified as separate items. Clause 22 of the purchase order, terms and conditions, specifies that title passes upon payment. The documentation was separately invoiced. The payment and receipt of the documentation preceded the payment and receipt of the valves. Title to each item under contract passed from Valtek to the Appellant in Alberta at the time of each payment for the portion of the items invoiced. Title acquisition of the documentation was not conditional upon any action or status of the valves or vice versa. The documentation was designed for specific application as opposed to general application guide. 6.By letter of April 29, 1993 Valtek wrote the Appellant stating: "Enclosed is summary listing of all purchase orders issued by Husky Oil for the Bi-Provincial Project, their respective values, and the position that was allocated to "Documentation". The documentation charge amounts to 10% of the value of the order. Documentation refers to certified drawings, bills of material, test result records, CMTR's final inspection, release notes etc." The pertinent legislative provisions of the Act 3(1) In this Act: (b) "consideration" means money paid or agreed to be paid, property delivered or exchanged or agreed to be delivered or exchanged, things done or agreed to be done, rights or any other consideration whatsoever and includes service charge, transportation charge, or any other cost, or tax, levy or duty imposed by any level of government other than the tax imposed pursuant to Part IX of the Excise Tax Act (Canada), as amended from time to time, in respect of the sale of taxable service or tangible personal property whether or not the charge, cost, tax, levy or duty included is shown separately on any invoice or in the books of the seller or of the purchaser (n) "value" means, subject to subsections 5(1), (17), (17.1) and (17.2), the consideration given or agreed to be given by the consumer or user for taxable service or the transfer of the ownership of or title to tangible personal property and includes charges added for electrical energy under section 36 of The Power Corporation Act 5(9) Every person residing or ordinarily resident or carrying on business in Saskatchewan who brings into the province or who receives delivery in the province of tangible personal property for his own consumption or use, or for the consumption or use of other persons at his expense, or on behalf of or as agent for principal who desires to acquire the property for consumption or use by the principal or other persons at his expense, shall immediately report the matter to the minister or his appointee and forward or produce to him the invoice, if any, in respect of the property and any other information required by him with respect to the property and shall pay the same tax in respect of the consumption or use of the property as would have been payable if the property had been purchased at retail in the province at the price that would have been paid in Saskatchewan if the tangible personal property had been purchased at retail in the province. (12) The expression "price" in subsections (9) and (9.2) includes the value of the tangible personal property, transportation costs and any other costs whatsoever incurred in bringing the property into Saskatchewan and in preparing the property for use or consumption in Saskatchewan, borne or to be borne by the user or consumer or any person at his expense or on his behalf or as his agent. 8(1) The following classes of tangible personal property and taxable services are exempt from the tax imposed by this Act when purchased by retain sale in the province: (f) books, magazines and periodicals. And the relevant portions of The Education and Health Tax Act Regulations, R.R.S. c. E-3 Reg. ("Reg. 1") include: 5(1) In subsection 8(1) of the Act and in these regulations: (b)"books" means: (i) books that are printed and bound with permanent bindings; (ii) unbound literary and technical papers; (iii) loose-leaf sheets or pages that are printed and punched for insertion in ring or post binder; that are published solely for educational, technical, cultural or literary purposes and that contain no advertising, but does not include: (iv) albums; (v) catalogues; (vi)directories; (vii) fashion books; (viii) financial reports; (ix) loose-leaf sheets or pages that are printed and punched for insertion in albums, catalogues, directories, fashion books, price lists, rate books and time tables; (x) paper ruled for accounting or bookkeeping purposes; (xi) post and ring binders; (xii) price lists; (xiii) rate books; (xiv) time tables; (xv) any other reading materials or articles that are similar, or used for purpose similar, to any of the classes of materials described in subclauses (iv) to (xiv) The parties had agreed that the documents in issue fall within the definition of tangible personal property as set out in the Act and would constitute technical papers that would have technical purpose. As result, the Board framed the issue before it as follows: 1. Was the documentation purchased by the Appellant part of the consideration attributable to the purchase of valves or was it an independent purchase? 2. If it is determined the purchase was an independent one is it exempt from tax by virtue of Section 8(1)(f) of the Act? In response to the first issue the Board found: In the board's opinion the Appellant purchased the subject documentation independent of the valves. It could be said the purchases are interrelated and the documentation would be of no value without the valves. However, the evidence clearly shows the valves and documentation were purchased separately and it was not condition that the supply of one was dependant on the supply of the other. Documentation was an additional purchase by the Appellant and one the Appellant would have been responsible for without purchase of the valves, although, it is highly unlikely the Appellant would have ordered the documentation without valve purchase because of their obvious relationship. As previously stated the valves were ordered and shipped to the job site in Lloydminster, Saskatchewan where they were installed in the Appellant's plant. The documentation which [sic] was not on site during installation. In fact they it [sic] not arrive at the site until well after valve installation which leads the board to conclude the purchase of the documentation was not required for preparing the valves for use but rather for the ongoing maintenance of the valves as submitted by the Appellant. In response to the first question the board determined the purchase of documentation was independent of the valves and therefore not consideration in establishing the final price of the valves. Thus, the documentation stands as tangible personal property and is subject to tax as such by virtue of Subsection 5(9) of the Act unless the Appellant can claim an exemption under Section 8(1)(f) of the Act. The respondent argues the Board erred in its conclusion that the purchase of the documentation was not required for preparing the valves for use in Saskatchewan. In the respondent's view the material before the Board was more consistent with the documentation charges being part of the purchase of the valves and one cannot avoid the tax consequence by allocating the price to alleged components or by separately invoicing various charges. The respondent's position is based upon the combined effect of ss. 3(1)(b), 3(1)(n) and 5(12) of the Act. The respondent's view of the affect of these sections is accurate. The Board, however, correctly identified the issue as one of whether or not the drawings were required for "preparing the property for use in Saskatchewan" as required by s. 5(12) of the Act. Subsection 21(11) of The Revenue and Financial Services Act provides that on an appeal the facts are deemed to have been conclusively established by the findings of the Board unless made on evidence which does not warrant that finding. The respondent argues that the application of the statutory requirements in this instance whether the documentation was required for preparing the property for use in Saskatchewan to the evidence before the Board is question of law reviewable by this Court. Alternatively, the respondent argues the evidence did not warrant the findings made by the Board. The respondent's argument requires review of the role and jurisdiction of the Court on an appeal of this nature. The role of the Court is in the nature of judicial review. In Kroma Color Photo Labs Inc. v. Saskatchewan (Minister of Finance) (1993), 1981 CanLII 2186 (SK CA), 11 Sask. R. 28 (C.A.) the chambers' judge who had been hearing an appeal under s. 21 of The Revenue and Financial Services Act had taken the view that the board had not made determination as to whether certain items had been purchased for resale and it was therefore open to him to reach his own decision on this question. The Court of Appeal stated at pp. 29 and 30: The view of the Chambers judge that there was no factual determination by the Board is not accurate as the Board's decision contained the following statements: "4. Kroma Kolor Photo Labs used the above-named items in the normal course of business. "2) other items are provided as service and are not sold to the customer and therefore attracts tax pursuant to section 49 of the Education and Health Tax Act. These items include sleeving, masks, plastimounts and slide boxes." (emphasis added) This indicates the Board addressed the question of whether the three items were purchased for resale and concluded they were not. Section 22 of the Revenue and Financial Services Act requires that findings of fact made by the Board are to be accepted and applied in any further judicial review of the Board's decision. It is of no consequence but might say find no difficulty in accepting the Board's conclusion on this important factual determination. [Emphasis added] The Court's role is supervisory in nature. Questions of law are within the purview of the Court. On questions of fact the Court's role is restricted to circumstances where the evidence does not warrant findings of fact made by the Board. By this take the legislators to mean that the Court is not to substitute its view of the evidence for that of the Board simply because it may be of different view. The observations of H. W. R. Wade in his text Administrative Law, 4th ed. (Oxford: Clarendon Press, 1977) at pp. 274 and 275 are, in my view, appropriate to the jurisdiction conferred by s. 21(11) of The Revenue and Financial Services Act on this Court insofar as issues of fact are concerned. Findings of fact are the domain where deciding authority or tribunal can fairly expect to be master in its own house. Just as the courts look jealously on decisions by other bodies on matters of law, so they look indulgently on their decisions on matters of fact. But the limit of this indulgence is reached where findings are based on no satisfactory evidence at all. It is one thing to weigh conflicting evidence which might justify conclusion either way. It is another thing altogether to make insupportable findings. "No evidence" does not mean only total dearth of evidence. It extends to any case where the evidence, taken as whole, is not reasonably capable of supporting the finding; or where, in other words, no tribunal could reasonably reach that conclusion on that evidence. In terms of the evidence before the Board on thismatter there was evidence which could support eitherinterpretation of the facts. There was not an absence of evidence such that the Board could not reasonably reach the conclusion which it did. Insofar as the respondent argues that the Board's application of the statutory requirement (that the documents were required to prepare the valves for use in Saskatchewan) to the evidence is question of law, disagree. The respondent's argument is in essence to distinguish between findings of primary fact based upon an assessment of the evidence before the Board and the application of statutory provision to those primary facts, characterizing the latter as question of law open to review by this Court. That gives rise to the question as to when is determination by the Board one of fact and when is it one of law? Bayda C.J.S. dealt with the dilemma in Re Peters et al. and University Hospital Board (1983), 1983 CanLII 2066 (SK CA), 147 D.L.R. (3d) 385 at 395 (C.A.): The answer to the question whether particular set of facts falls within the scope or purview of term in statute is one of fact or law depends largely upon the term itself. Where the term is simple and ordinary, and, as it were, can be reduced no further in simplicity or definition, and which to define would require words that themselves need definition, the question is one of fact. The terms "resident" and "insulting" are good examples. Where the term gives rise to some complexity, or has acquired special or technical meaning, the question is likely, but not always one of law. This view was ratified by the Court of Appeal in its subsequent decisions in Re Saskatchewan Human Rights Commission et al. and Canadian Odeon Theatres Ltd. (1985), 18 D.L.R. (4th) 93 and Re Pasqua Hospital and Harmatiuk (1988), 1987 CanLII 981 (SK CA), 42 D.L.R. (4th) 134. In my view the determination of whether the documents were required for preparing the property for use in Saskatchewan is question of fact. There is nothing complex or technical about the statutory requirement. The words used are simple and ordinary. The Board determined as finding of fact that the documentation was not required for preparing the valves for use in Saskatchewan and there was evidence before the Board upon which it was open to them to come to that conclusion. The issue raised by Husky on the appeal was theinterpretation adopted by the Board of the word "published" asused in s. 5(1)(b) of Reg. 1 when defining the word "books". This goes to the second issue before the Board. If, as theBoard found, the purchase of the drawings was an independenttransaction, was it exempt from tax by virtue of s. 8(1)(f) ofthe Act? The Board had the following to say: The Appellant and Respondent agree the subject documentation would constitute "technical papers" and accordingly fall within the definition of "books". The only obstacle remaining then is to qualify for an exemption under Section 8(1)(f) is that the technical papers must be published and that they contain no advertising. The board notes and accepts the definition of "publish" set out on page of the Respondents [sic] submission. The supplier, Valtek, according to the facts, shipped the documents to Engineering and Procurement Contractors offices in Calgary for use in preparing other documentation and then to the Appellant's Calgary office. Late in 1991 the Appellant shipped the documentation to its BPU site in Saskatchewan. It is apparent from the evidence submitted the supplier, Valtek, never published the documents. They were merely shipped to the destination designated by the Appellant which in the boards [sic] view would not represent the requirement of being "published" as provided for in the Act. Accordingly, it is the board's finding that the Appellant fails to meet the requirements of Section 8(1)(f) of the Act and is therefore not entitled to claim an exemption. Husky argues the word "published" is not meant to restrict the meaning of those words which precede it, that is (i) books; (ii) unbound literary and technical papers; (iii) loose-leaf sheets or pages; but rather it is an introduction to the purposes outlined solely for educational, technical, cultural or literary purposes. Alternatively the appellant argues the word "published" is to be interpreted broadly, i.e., the act of communicating to the public where the public can be one person or more. The respondent argues you cannot have publication in the context of papers passing between two private parties pursuant to contract. Publication contemplates distribution or availability to more than one person. The respondent relies upon the decision in Re Edmonton Journal and Attorney-General for Alberta et al. (1985), 1985 CanLII 1233 (AB QB), 22 D.L.R. (4th) 446 at 452 (Alta. Q.B.) which provided the following definition of "published", which was the definition adopted by the board herein: Dictionaries define "publish" as follows: Websters Third New International Dictionary: 1a: to declare publicly: make generally known 3a: to place before the public (as through mass medium) Blacks Law Dictionary, 5th ed.: To make public; to circulate; to make known to people in general. To issue; to put into circulation. To utter; to present (e.g. forged instrument) for payment. To declare or assert, directly or indirectly, by words or actions, that forged instrument is genuine. An advising of the public or making know [sic] of something to the public for purpose. The respondent argued that the Court could look to administrative policy as factor which may be considered in cases of doubt about the meaning of legislation. See Gene A. Nowegijick v. R. et al., 1983 CanLII 18 (SCC), [1983] S.C.R. 29 at 37. In that regard Husky noted that every province with sales tax exempts books. Most of the wording is very similar to Saskatchewan's exemption, but there are small variances in the structure of the wording and the punctuation. Nova Scotia and New Brunswick, it was noted, used wording very close to Saskatchewan's except that they do not use the word "published". Instead they introduce the restriction on books with the words "that are solely for educational, technical, cultural or literary purposes ." Despite not using the word "published" in the legislation, Nova Scotia's "Vendor Guide G1035" which is virtually the same as Saskatchewan's Information Bulletin No. EH-9 describes exempt books as "Books that are printed and bound and are published solely for educational, technical, cultural or literary purposes". Husky suggested that the term "published" in the context of the Nova Scotia sale tax does not have particular meaning other than to introduce the restrictions on the type of books that are exempt. Husky also noted that in the New Brunswick Sales Tax Guide No. 0008, the word "publication" is defined as follows: K. "Publication" means the printing and distribution, usually for sale, of books, magazines, newspapers, etc. Husky concludes that in New Brunswick publication does not require public distribution or sale to the public. In fact, it does not necessarily involve sale in all circumstances. If the word "published" restricts the words which precede it and requires an element of distribution or availability to the public, Husky argues it is sufficient if the documents are delivered to one member of the public and relies upon Re Peel Board of Education and et al. (1987), 59 O.R. (2d) 654 at 659 (H.C.J.) and R. v. Liversidge (1970), 73 W.W.R. 29 at 38 (B.C.C.C.). In Husky's view publication is an act of communication from one to another and the word public includes one person or more. The first question to be determined is whether the word "published" qualifies the words which precede it or whether it relates to the purposes for which the book, literary or technical papers or loose-leaf sheets were published. If the word "published" qualifies the preceding words, it draws distinction between published and unpublished books or published and unpublished technical papers and exempts from tax only those which are published. To take it one step further, if the interpretation adopted by the Board is correct, the Minister in determining whether an item is published book or technical paper, he must determine whether the production, distribution or availability is sufficiently public or broadly available so as to constitute published versus an unpublished technical paper. The alternative does not focus upon the extent to which the book or technical paper is produced, distributed or available to sufficiently broad audience but rather the purpose for which it was produced, distributed or made available, i.e., solely for educational, technical, cultural or literary purposes. find the latter consistent with the context in which the word "published" is used in s. 5(1)(b) of Reg. 1. Technical papers by their nature, are often going to be directed to narrow audience. To focus upon the extent towhich technical papers are directed at a public audience so asto determine their taxability makes no sense and is at oddswith the very proposition that technical papers can be exemptfrom tax. If the word "published" is intended to focus upon purpose that is, items produced, distributed or available solely for educational, technical, cultural or literary purposes, it is far more consistent and harmonious with the context in which the words appear and far more precise in terms of criteria to determine taxability. Having determined that the word "published" isintended to speak to purpose and not the extent of theaudience, it is probably not necessary to comment upon thedefinition adopted by the Board. would note, however, that the definition adopted does give rise to the artificiality noted earlier i.e. determining whether technical papers are produced, distributed or available to sufficiently broad audience. Is it one, two, ten? There is no guideline or criteria for the taxing authority to apply. If the word "published" were intended to qualify the preceding words, then would agree with Husky that an audience of one is sufficient. This eliminates having to focus upon whether the audience is sufficiently broad which as noted, is anomalous when one considers its application to technical papers. The broad interpretation eliminates this anomaly. In conclusion, the appeal is allowed and the decisionof the Board reversed. The appellant shall have its costs of the appeal.
The respondent conducted an audit resulting in the assessment of sales tax. Husky Oil appealed the decision by the Board of Revenue Commissioners which held Husky liable to pay tax on documentation charges. The primary function of the documentation was ongoing technical support for the valves operation, maintenance and modifications. The valves and documentation were identified as separate items on the same purchase order and arrived at the job site separately. The Board decided that the appellant purchased the documentation independent of the valves and were subject to tax under ss.5(9) unless exempted under ss.8(1)(f). The parties agreed the documents fell within the definition of tangible property as set out in the Act. At issue was the interpretation by the Board of the word 'published' as used in ss.5(1)(b) of eg. 1 when defining the word 'books' and whether the drawings were exempt from tax. HELD: The appeal was allowed and the decision of the Board reversed. Costs were awarded to the appellant. 1)The role of the Court was in the nature of judicial review and supervisory in nature. The Court's role on questions of fact is restricted to circumstances where the evidence does not support findings of fact. 2)There was evidence which could support either interpretation of the facts.  3)The determination of whether the documents were required for preparing the property for use in Saskatchewan is a question of fact. There was nothing technical about the statutory requirement. The words used are simple and ordinary. It was open to the Board to determine as a finding of fact that the documentation was not required for preparing the valves for use. 4)Technical papers by their nature are often going to a narrow audience. To focus upon the extent to which technical papers are directed at a public audience so as to determine their taxability makes no sense and is at odds with the proposition that technical papers can be exempt from tax. The broad interpretation eliminates this anomaly.  5)Having determined that the word published is intended to speak to purpose and not to extent of the audience it was not necessary to comment upon the definition adopted by the Board.