Hon. Charles P. McTague, K.C.,
220 Bay Street, Toronto 1, Canada, April 17th, 1950.
The Honourable Stuart Garson,
Minister of Justice, .
Department of Justice, *
Re: Broker Dealers Association.
As counsel for the Broker Dealers Association of Ontario and acting only in that capacity and not for any individuals concerned, I wish to put before you certain submissions with respect to the action of the Post Office Department stopping the mails to people in, or remotely associated with, the security business here in Toronto.
In the first place, my submission is that under the rule of law, to which we lawyers continually pay lip service, the procedure followed in the Post Office Department is totally without justification.
The powers of the Post Office generally in so far as they appear to be relevant to the matter alleged to be involved here are, I think, to be found in the Post Office Act, Sec. 7 (d) permitting the making of regulations, "for marking on the covering of letters, circulars or other mailable matter suspected to concern illegal lotteries, so-called gift concerts, or other illegal enterprises of like character, offering prizes,, or concerning schemes devised or intended to deceive or defraud the public, for the purpose of obtaining money under false pretences, whether such letters, circulars or other mailable matter are addressed to or received by mail from places within or without Canada, a warning that they are suspected to be of a fraudulent character and for returning such letters, circulars or other mailable matter to the senders".
The relevant regulations pursuant to Sec. 7 (d) appear to be 204 and 206, reading as follows:
204-"If it be established to the satisfaction of the Postmaster General that any person is engaged or represents himself as engaged in the business of publishing any obscene or immoral books, pamphlets, pictures, prints, engravings, lithographs, photographs or other publication, matter or thing of an indecent, immoral, seditious, disloyal, scurrilous or libellous character or in the business of an illegal lottery, so called gift concerts, or other similar enterprise offering prizes or concerning schemes devised or intended to deceive or defraud the public for the purpose of obtaining money under false pretences, or in the business of selling or in any wise disposing of counterfeit money or what is commonly called "Green Goods," or of drugs, medicines, instruments, books, papers, pamphlets, recipes, prescriptions, or other things with the object or with the pretended object of preventing conception or procuring abortion, and if such person shall, in the opinion of the Postmaster General, endeavour to use the Post Office for the promotion of such business, or if it be established to the satisfaction of the Postmaster General that any persons are using, or endeavouring to use the
Post Office for any fraudulent or illegal purpose, then, in any such case, it is hereby declared that no letters, packet, parcel, newspaper, book or other thing sent or sought to be sent through the Post Office by or on behalf of or to or on behalf of such person, shall be deemed mailable matter."
206-"The Postmaster General has power, under the statute, to mark or cause to be marked upon the covers of letters, circulars, or other mail matter suspected to concern schemes devised or intended to deceive or defraud the public for the purpose of obtaining money under false pretences, whether such letters, circulars or other mail matter are addressed to or received by mail from places within or without Canada, 'suspected to be of a fraudulent character,' and to return such letters, circulars or other mail matter to the senders."
I think you will agree that it is trite law that the regulations cannot be extended beyond the authority given in the statute to make them. For the purpose of my submission to you I am not arguing that these regulations go beyond the statutory authority for them, but I do submit as strongly as I can that the Deputy Postmaster General has gone far beyond what is provided for in the regulations or the statute in the most arbitrary way.
Without any warning whatever, and on the strength of representations made by the United States Post Office Department at the behest of the United States Securities and Exchange Commission and entirely ex parte, without the person suspected having any opportunity to be heard, the mails have not only been arbitrarily cut off, but have been required to be forwarded to Ottawa where they are held for an indefinite period without any commitment or statement of intention to prefer any charges in the courts. Not only that, but in
separate hearings of aggrieved persons before the Deputy Postmaster General, their mail has been released upon the exaction of undertakings that they will not further deal in specified securities, or that they will agree to modify the language and terms of circulars sent in the future. The whole procedure is in substance a conviction by the Deputy Postmaster General without a hearing, punishment by cutting off the mails and the exaction of undertakings as a condition on which the penalty will be suspended.
If there is anything in the Post Office Act justifying such procedure, I am unable to locate it. In addition to that, I cannot conceive of any government putting forward legislation to justify such action by way of amendment to the Post Office Act, and I cannot conceive of any parliament enacting such legislation if it were put forward.
Mr. Turnbull seems to take undue comfort, in my opinion, in the Literary Publications Case, I think it is, in British Columbia, (58 C.C.C. 385), in giving him the right to do anything and considering that whatever he does is not reviewable by the courts. He does not seem to realize that the court in that case simply held that there was a right to exercise a discretion under the statute and the discretion having been duly and properly exercised, the courts would not review it. That case concerned an action for damages following an acquittal after a prosecution under the Criminal Code. It appears to me to be no authority for the proposition that the Post Office Department can legislate through the process of administration and in fact set up what amounts to a Star Chamber.