Clement,
DJ:—In
this
action
the
plaintiffs-appellants
(whom
I
will
call
the
Administrators)
claim
relief
from
taxation
under
the
Income
Tax
Act
by
virtue
of
subsection
70(6)
of
which
the
following
provisions
are
relevant:
(6)
Where
any
property
of
a
taxpayer
who
was
resident
in
Canada
immediately
before
his
death
that
is
a
property
to
which
paragraphs
(5)(a)
and
(c)
or
paragraphs
(5)(b)
and
(d),
as
the
case
may
be,
would
otherwise
apply
has
on
or
after
his
death
and
as
a
consequence
thereof,
been
transferred
or
distributed
to
(a)
his
spouse
who
was
resident
in
Canada
immediately
before
the
taxpayer’s
death,
or
if
the
property
can,
within
15
months
after
the
death
of
the
taxpayer
or
such
longer
period
as
is
reasonable
in
the
circumstances,
be
established
to
have
become
vested
indefeasibly
in
the
spouse
or
trust,
as
the
case
may
be,
not
later
than
15
months
after
the
death
of
the
taxpayer,
the
following
rules
apply:
...
The
essential
issue
is
whether
the
property
of
the
deceased
taxpayer
became
indefeasibly
vested
in
his
surviving
spouse
within
the
meaning
and
the
time
prescribed
by
the
section.
If
it
did,
the
effective
result
of
the
operation
of
the
rules
is
that
she
took
it
free
of
capital
gains
tax;
and
thereafter
any
gains
made
by
the
spouse
on
disposition
of
the
property
would
be
brought
into
assessment
to
tax.
The
result
is
for
convenience
called
a
rollover.
The
claim
was
dismissed
at
trial.
There
is
involved
in
the
issue
the
construction
and
operation
of
provincial
statutes,
and
of
the
Income
Tax
Act
(the
Act)
and
their
interaction
in
the
circumstances
of
the
case.
No
constitutional
issues
are
raised.
William
E
Hillis
was
a
taxpayer
resident
at
Macklin
in
the
Province
of
Saskatchewan,
Canada.
He
died
intestate
in
February,
1977
leaving
him
surviving
his
spouse
Winnifred
—one
of
the
Administrators
—
resident
at
Macklin,
and
two
sons
Irvin
and
Gerald.
Irvin
is
the
other
Administrator
and
is
also
resident
at
Macklin.
Letters
of
Administration
of
the
taxpayer’s
property
were
granted
to
the
Administrators
by
the
Surrogate
Court
at
Saskatoon
in
August,
1977.
The
assets
of
the
estate
comprised
real
and
personal
property
and
were
valued
for
administration
purposes
at
some
$530,000.
I
infer
from
the
record
that
for
all
practical
purposes
this
was
the
net
value.
The
Administrators
filed
a
terminal
T1
Individual
Income
Tax
Return
in
respect
of
the
1977
taxation
year
of
the
taxpayer
which
disclosed
no
tax
payable.
It
was
prepared
on
the
basis
of
the
claimed
operation
of
subsection
70(6)
of
the
Act.
However,
it
was
not
until
August,
1979
that
the
Minister
of
National
Revenue
gave
notice
of
reassessment
to
tax
in
the
amount
of
$44,460.40
and
interest
of
$4,897.95.
An
objection
to
the
assessment
was
filed
and
in
May,
1980
the
Minister
gave
a
further
notice
of
reassessment
to
tax
in
the
amount
of
$59,013.40
including
accrued
interest
and
some
upward
adjustment
of
the
earlier
assessment.
In
coming
to
these
reassessments
the
Minister
refused
to
apply
subsection
70(6)
and
assessed
capital
gain
on
deemed
dispositions
of
farm
land,
partnership
interests,
and
shareholdings.
The
application
for
Letters
of
Administration
had
not
been
prepared
by
a
lawyer:
none
practised
at
Macklin.
It
was
the
product
of
an
accountant
living
at
Saskatoon
some
175
miles
to
the
East.
As
time
went
on
the
Administrators
came
to
the
conclusion
that
he
was
doing
nothing
to
assist
them
in
forwarding
the
administration
of
the
estate,
particularly
towards
resolution
of
the
tax
issue.
It
may
well
have
been
that
this
was
beyond
his
competence:
in
any
case
the
administration
of
the
estate
could
not
very
well
go
forward
to
completion
until
the
issue
was
settled.
Eventually,
in
January,
1979
some
23
months
after
the
death
of
the
taxpayer,
the
Administrators
for
the
first
time
consulted
a
lawyer.
Thereafter,
steps
were
taken
that
were
thought
to
buttress
the
claim
of
the
spouse
to
rollover
in
respect
of
all
of
the
property
of
the
estate.
They
relate
to
provisions
of
the
provincial
statutes
to
which
I
have
alluded.
On
June
15,
1979
Irvin
Hillis
executed
a
disclaimer
by
deed
in
the
matter
of
the
estate
of
William
Hillis
in
the
following
terms:
I,
IRVIN
HILLIS,
of
Macklin,
in
the
Province
of
Saskatchewan,
am
his
lawful
son
and
one
of
his
next-of-kin
and
beneficiary
of
his
estate,
DO
HEREBY
DISCLAIM
any
interest
in
the
Estate
of
William
Edward
Hillis
and
do
hereby
declare
that
I
have
not
received
any
benefits
or
assets
of
the
said
estate
as
of
the
date
hereof.
The
interest
thereby
disclaimed
arose,
of
course,
by
virtue
of
the
death
intestate
of
the
deceased
taxpayer
and
the
operation
of
the
Intestate
Succession
Act
of
Saskatchewan.
On
July
4,
1979
the
other
son,
Gerald,
executed
a
disclaimer
by
deed
in
identical
terms.
On
December
14,
1979
the
spouse
(the
Administrator
Winnifred
Hillis)
applied
to
the
Court
of
Queen’s
Bench
for
Saskatchewan
for
an
order
under
the
Dependants’
Relief
Act
of
Saskatchewan.
The
material
in
support
was
comprehensive.
It
disclosed
amongst
other
things
that
the
matrimonial
home
property
(a
lot
in
Macklin
valued
at
$22,000)
had
been
transferred
to
the
spouse
at
some
earlier
time
which
I
infer
was
shortly
after
the
grant
of
Letters
of
Administrations.
Similarly
title
to
a
parcel
of
real
estate
had
been
made
to
a
purchaser
under
a
pre-existing
agreement
for
sale.
No
other
property
of
the
estate
had
been
transferred
to
any
beneficiary
but
the
remaining
real
property
had
been
transmitted
to
the
Administrators
and
Certificates
of
Title
issued
to
them
as
Administrators
on
November
4,
1977.
There
is
no
direct
evidence
as
to
transmission
of
personal
property.
The
two
sons
appeared
and
did
not
oppose
the
application.
In
the
result
the
court
ordered:
.
.
.
THAT
the
assets
of
the
Estate
of
WILLIAM
EDWARD
HILLIS
are
hereby
granted
to
WINNIFRED
M
HILLIS,
of
Macklin,
in
the
Province
of
Saskatchewan.
It
further
ordered
the
Registrar
of
the
Land
Titles
Office
to
issue
to
her
Certificates
of
Title
to
the
real
property
of
the
estate.
The
provincial
statutory
provisions
that
require
consideration
are
these:
The
Intestate
Succession
Act,
RSS,
cap
1-13.
“2.
In
this
Act:
(c)
“net
value”
means
the
value
of
the
estate
wherever
situated,
both
within
and
outside
Saskatchewan,
after
payment
of
the
charges
thereon
and
the
debts,
funeral
expenses,
expenses
of
administration
and
succession
duty.
3.
This
Act
is
subject
to
any
order
affecting
the
estate
of
an
intestate
made
by
the
Court
of
Queen’s
Bench
or
the
Surrogate
Court
for
Saskatchewan
under
the
authority
of
The
Dependants’
Relief
Act.
4.
.
.
.
(2)
Where
the
net
value
exceeds
$10,000,
the
spouse
shall
be
entitled
to
$10,000
and
shall
have
a
charge
upon
the
estate
for
that
sum,
with
legal
interest
from
the
date
of
the
death
of
the
intestate.
(3)
Of
the
residue
of
the
estate,
after
payment
of
the
said
sum
of
$10,000
and
interest:
(b)
where
the
intestate
dies
leaving
a
spouse
and
children,
one-third
shall
go
to
the
spouse.”
The
Dependants’
Relief
Act,
RSS
cap
D-25
2.
(1)
In
this
Act:
(c)
“dependant”
means:
(i)
the
wife
or
husband
of
a
testator
or
an
intestate;
or
4.
(1)
Where
a
person
dies
leaving
a
dependant
or
dependants,
an
application
may
be
made
to
the
court
by
or
on
behalf
of
any
dependant
for
any
order
making
reasonable
provision
for
his
or
her
maintenance.
(2)
Where
an
application
is
made
under
subsection
(1)
by
or
on
behalf
of
a
dependant
of
an
intestate,
then,
for
the
purpose
of
this
Act,
the
intestate
shall
be
deemed
to
be
a
testator
and
to
have
provided
by
will
for
distribution
of
his
estate
as
on
an
intestacy,
and
this
Act
shall
be
construed
accordingly.
9.
(1)
If
upon
an
application
the
court
is
of
opinion
that
the
testator
has
by
will
so
disposed
of
real
or
personal
property
that
reasonable
provision
has
not
been
made
for
the
maintenance
of
the
dependant
to
whom
the
application
relates,
then,
subject
to
the
following
provisions
and
to
such
conditions
and
restrictions
as
the
court
deems
fit,
the
court
may,
in
its
discretion,
make
an
order
charging
the
whole
or
any
portion
of
the
estate,
in
such
proportion
and
in
such
manner
as
it
deems
proper,
with
payment
of
an
allowance
sufficient
to
provide
such
maintenance
as
the
court
thinks
reasonable,
just
and
equitable
in
the
circumstances.
(2)
No
allowance
ordered
to
be
made
to
the
wife
of
the
testator
shall,
in
the
opinion
of
the
court,
be
less
than
she
would
have
received
if
the
husband
had
died
intestate
leaving
a
widow
and
children.
(4)
The
allowance
may
be
by
way
of
an
amount
payable
annually
or
otherwise,
or
of
a
lump
sum
to
be
paid,
or
of
certain
property
to
be
transferred
or
assigned,
either
absolutely
or
for
life
or
for
a
term
of
years,
to
the
dependant,
or
for
the
use
and
benefit
of
the
dependant,
as
the
court
deems
fit.
If
a
transfer
of
property
is
ordered,
the
court
may
give
all
necessary
and
proper
directions
for
the
execution
of
the
transfer
either
by
the
executors
or
the
administrators
with
the
will
annexed
or
such
other
person
as
the
court
may
direct,
or
may
grant
a
vesting
order.
14.
(1)
Where
an
order
is
made
under
this
Act,
then
for
all
purposes,
including
the
purposes
of
enactments
relating
to
succession
duties,
the
will
shall
have
effect,
and
shall
be
deemed
to
have
had
effect
from
the
testator’s
death,
as
if
it
had
been
executed,
with
such
variations
as
are
specified
in
the
order,
for
the
purpose
of
giving
effect
to
the
provision
for
maintenance
made
by
the
order.
The
Devolution
of
Real
Property
Act,
RSS
cap
D-27
4.
(1)
Real
property
in
which
a
deceased
person
was
entitled
to
an
interest
not
ceasing
on
his
death
shall
on
his
death,
notwithstanding
any
testamentary
disposition,
devolve
upon
and
become
vested
in
his
personal
representative
from
time
to
time
as
if
it
were
personal
property
vesting
in
him.
(3)
The
personal
representative
shall
be
the
representative
of
the
deceased
in
regard
to
his
real
property
in
which
he
was
entitled
to
an
interest
not
ceasing
on
his
death
as
well
as
in
regard
to
his
personal
property.
(5)
Subject
to
the
powers,
rights,
duties
and
liabilities
hereinafter
mentioned,
the
personal
representative
of
a
deceased
person
shall
hold
the
real
property
as
trustee
for
the
persons
by
law
beneficially
entitled
thereto,
and
those
persons
shall
have
the
same
right
to
require
a
transfer
of
real
property
as
persons
beneficially
entitled
to
personal
property
have
to
require
a
transfer
of
such
personal
property.
9.
When
any
part
of
the
real
property
of
a
deceased
person
vests
in
his
personal
representative
under
this
Act,
the
personal
representative,
in
the
interpretation
of
any
Act
of
this
Legislature
or
in
the
construction
of
any
instrument
to
which
the
deceased
was
a
party
or
under
which
he
was
interested,
shall,
while
the
estate
remains
in
the
personal
representative,
be
deemed
in
law
the
heir
of
the
deceased,
with
respect
to
such
part,
unless
a
contrary
intention
appears,
but
nothing
in
this
section
affects
the
beneficial
right
to
any
property
or
the
construction
of
words
of
limitation
of
any
estate
in
or
by
any
deed,
will
or
other
instrument.
10.
(1)
At
any
time
after
the
expiration
of
one
year
from
the
date
of
probate
or
of
letters
of
administration
if
the
personal
representative
has
failed,
on
the
request
of
the
person
entitled
to
any
real
property,
to
convey
the
real
property
to
that
person,
the
court
may,
if
it
thinks
fit,
on
the
application
of
that
person
and
after
notice
to
the
personal
representative,
order
that
the
conveyance
be
made,
and
in
default
may
make
an
order
vesting
the
real
property
in
such
person
as
fully
and
completely
as
might
have
been
done
by
a
conveyance
thereof
from
the
personal
representative.”
Turning
first
to
subsection
70(6)
of
the
Act,
the
issue
commences
with
the
meaning
and
scope
to
be
attributed
to
these
phrases:
if
the
property
can,
within
15
months
after
the
death
of
the
taxpayer
or
such
longer
period
as
is
reasonable
in
the
circumstances,
be
established
to
have
become
vested
indefeasibly
in
the
spouse
—
not
later
than
15
months
after
the
death
of
the
taxpayer,
Passing
by
for
the
moment
the
phrase
giving
jurisdiction
for
an
enlargement
of
time,
the
criterion
for
the
relief
intended
by
the
subsection
appears
in
these
terms:
if
the
property
can,
within
15
months
after
the
death
of
the
taxpayer
—
be
established
to
have
become
vested
indefeasibly
in
the
spouse
not
later
than
15
months
after
the
death
of
the
taxpayer,
In
this
context,
the
verb
form
“can”
takes
the
meaning
of
‘be
able
to”.
In
effect
the
spouse
must
be
able
to
establish
that
in
law
in
the
circumstances
of
the
case
the
property
vested
indefeasibly
in
her
within
the
prescribed
15
months.
In
the
whole
of
the
context
it
is
clear
that
it
is
not
necessary
that
actual
conveyance
of
the
property
to
her
shall
have
been
completed
within
that
time:
if
she
makes
the
required
proof,
then
in
law
the
conveyancing
must
follow
as
a
matter
of
course
and
of
right.
What
must
inevitably
occur
is
to
be
taken
as
having
occurred.
This
interpretation
affords
an
intelligible
reconciliation
of
the
phrase
with
the
preceding
phrase
which
speaks
of
property
that
has
on
or
after
the
death
been
transferred
or
distributed:
it
gives
some
recognition
to
the
difficulties
and
complexities
attendant
in
some
cases
on
the
due
administration
and
distribution
of
estate
and
which
may
have
to
be
resolved,
particularly
when
the
construction
and
operation
of
a
will
is
contested,
before
distribution
can
be
made.
Then
when
necessary,
the
provision
for
enlargement
of
time
may
be
invoked.
If
the
circumstances
warrant
it,
the
required
proof
may
be
made
within
a
reasonable
time
after
the
lapse
of
the
prescribed
15
months
whether
or
not
conveyancing
has
been
completed.
The
question
of
indefeasible
vesting
within
the
prescribed
period
is
to
be
determined
by
provincial
law,
subject
to
what
I
have
to
say
later.
The
Intestate
Succession
Act
is
necessarily
the
starting
point.
Section
4
in
imperative
terms
entitles
the
spouse
to
$10,000
and
secures
payment
to
her
by
a
charge
on
the
estate.
It
further
provides
that
one-third
of
the
residue
shall
go
to
her,
and
this
is
also
in
imperative
terms.
By
necessary
implication
the
remaining
two-thirds
of
the
residue
goes
to
the
children
in
similar
fashion.
In
themselves
these
provisions
allow
for
no
equivocation
or
subsequent
divesting
ab
initio:
no
doubt
the
interest
given
can
be
dealt
with
subsequently
but
not
on
the
basis
of
repeal
of
the
statutory
grant.
In
my
opinion
the
provisions
come
into
operation
upon
the
death
of
the
intestate
and
effect
an
indefeasible
vesting
in
the
beneficiary
of
the
interest
provided,
to
which
the
Administrators
must
give
effect
albeit
subject
to
dealings
with
the
vested
interest
by
the
beneficiary.
In
this
view,
the
vesting
of
the
interest
is
not
dependent
upon
an
order
of
the
court
granting
administration
of
the
intestate’s
estate:
it
takes
place
by
force
of
imperative
statutory
provision
operating
at
the
moment
of
death
of
an
intestate.
The
importation
of
the
Dependant’s
Relief
Act
made
by
section
3
brings
forward
consideration
of
the
provisions
of
that
statute.
Subsection
4(2)
thereof
is,
amongst
other
things,
apparently
designed
to
reconcile
the
administrative
provisions
and
operation
of
the
statute
in
respect
of
wills,
with
rights
in
the
estate
of
an
intestate
given
to
a
spouse
and
child
by
the
Intestate
Succession
Act.
In
any
event
its
operation
is
not
intended
to
derogate
from
the
operation
of
the
latter.
Subsection
9(2)
ordains
in
mandatory
terms
that
no
allowance
of
relief
to
a
spouse
shall
be
less
than
would
go
to
the
spouse
on
an
intestacy
and
this,
I
think,
expresses
public
policy
in
Saskatchewan
as
to
the
minimum
rights
of
a
spouse
in
the
deceased
spouse’s
estate
—
subject,
of
course,
to
restrictions
that
are
not
applicable
here.
No
order
under
this
statute
can
affect
adversely
the
vesting
effected
by
the
Intestate
Succession
Act.
But
this
does
not
end
the
contention.
The
spouse
claims
relief
not
only
in
respect
of
$10,000
and
one-third
of
the
net
estate,
but
of
the
whole
of
the
net
estate
by
virtue
of
the
order
made
in
December
1977,
supra,
under
the
Dependants’
Relief
Act.
The
Crown
does
not
dispute
the
vesting
in
the
widow
effected
by
the
order
(a‘nd
consequential
divesting
of
any
interest
the
two
sons
may
have
had
at
that
time),
but
submits
that
it
was
made
after
the
expiration
of
the
prescribed
15
month
period,
that
the
right
to
relief
provided
by
this
subsection
had
then
expired,
and
that
the
statute
cannot
be
construed
as
effecting
the
revival
of
a
federally
granted
right
to
relief
from
income
tax
that
had
expired
through
the
operation
of
the
terms
on
which
the
relief
was
granted.
Subsection
4(2)
of
this
statute
deems
the
existence
of
a
will
with
provisions
such
as
those
made
by
the
Intestate
Succession
Act.
But
this
fiction
does
not
have
force
until
an
application
for
relief
is
made
by
or
on
behalf
of
a
dependant,
and
then
only
for
the
purposes
of
the
statute
which
cannot
include
federal
income
tax.
And
by
subsection
14(1)
it
is
not
until
an
order
is
made
that
the
fictional
will,
modified
as
to
the
court
may
seem
proper
in
the
circumstances
having
regard
to
the
purposes
and
directives
of
the
statute,
is
to
have
effect.
Then,
the
deemed
will
is
deemed
to
have
effect
from
the
date
of
death
of
the
intestate.
These
provisions
are
stated
to
be
for
all
purposes,
but
obviously
that
can
mean
only
for
all
provincial
purposes.
They
cannot
be
taken
to
intrude
fictions
for
provincial
purposes
into
the
interpretation
and
operation
of
the
Act.
The
latter
takes
its
operation
in
the
realities
of
the
circumstances,
subject
only
to
such
directives
as
it
may
itself
prescribe.
It
was
upon
this
basis
that
Fordham,
QC
decided
the
appeal
in
LaFlair
v
MNR
15
Tax
ABC
439;
56
DTC
451.
In
so
far
as
Bains
v
MNR,
[1975]
CTC
2178;
75
DTC
135
and
Howard
v
The
Queen,
[1974]
CTC
857;
75
DTC
6607
are
relevant
to
the
the
issue
here,
I
decline
to
apply
the
conclusions
reached
by
them
to
the
foregoing
considerations.
Beyond
this,
it
may
be
observed
that
there
was
no
certainty
within
the
prescribed
15
month
period
that
any
part
of
the
estate,
beyond
that
already
vested
in
her
by
the
Intestate
Succession
Act,
would
be
the
subject
of
a
relief
order
nor
what
terms
the
court
might
impose.
During
that
period
the
two
sons
had
not
disclaimed
and
the
disclaimers
do
not
appear
to
have
been
brought
to
the
attention
of
the
court
making
the
relief
order:
they
are
not
part
of
the
supporting
evidence
nor
are
they
referred
to
in
the
recital
to
the
order.
When
a
relief
order
is
made
it
operates
to
affect
the
expectations
or
vesting
arising
out
of
a
testamentary
disposition
(whether
actual
or
deemed)
and
in
order
to
the
relief
of
dependants
but
by
way
of
charge
on
the
estate.
In
so
far
as
an
order
may
incorporate
vesting
provisions
at
variance
with
an
actual
or
deemed
will,
such
will
is
deemed
to
have
had
effect
from
the
deemed
testator’s
death
(as
would
an
actual
will
in
law)
“for
the
purpose
of
giving
effect
to
the
provisions
for
maintenance
made
by
the
order”.
By
no
stretch
can
this
language
import
a
deemed
will
into
another
statute
or
act
for
a
different
purpose.
Additionally,
a
power
to
divest
property
has
in
contemplation
property
that
has
already
vested
and
by
which
a
dependant
is
deprived
of
the
means
of
sufficient
support.
A
subsequent
order
divesting
property
of
this
nature
and
vesting
it
in
a
dependant
operates
on
the
continuing
existence
up
to
that
time
of
the
original
vesting,
and
the
statute
does
not
support
the
view
that
the
property
is
upon
the
making
of
the
order
deemed
to
have
vested
in
the
dependant
ab
initio.
The
spouse
cannot
claim
through
this
route.
The
disclaimers
are
put
forward
as
having
an
independent
operation.
Argument
was
directed
to
the
effective
date
of
operation
of
a
disclaimer
(said
to
be
ab
initio),
a
matter
on
which
the
jurisprudencejails
a
little
short
of
certainty.
In
any
event,
the
decided
cases
deal
with
disclaimer
of
testamentary
gifts
and
these
do
not
necessarily
apply,
at
least
as
to
their
legal
effect
and
consequences,
to
imperative
statutory
gifts.
The
disclaimer
cannot
effect
an
amendment
to,
or
modification
of,
the
operation
of
the
Intestate
Succession
Act.
What
the
two
sons
divested
by
their
disclaimers
were
interests
that
had
vested
in
them
by
force
of
statute
on
the
death
of
the
taxpayer.
They
could
not
legally
change
that:
they
could
only
deal
with
it
ex
post
facto.
I
do
not
deny
that
they
could
disclaim,
but
the
purpose
of
such
a
disclaimer
could
not
be
that
usually
assigned
to
disclaimers
of
a
testamentary
gift:
the
burden
of
estate
debts.
There
is
no
justification
or
need
to
assign
to
these
disclaimers
a
retrospective
operation,
they
took
effect
in
reality
upon
their
execution
which
was
posterior
to
the
prescribed
15
month
period.
The
effect,
in
my
view,
was
an
accretion
to
the
interest
of
the
spouse
of
whatever
net
estate
might
then
be
left,
but
at
a
time
when
the
spouse’s
right
to
relief
from
tax
had
already
crystalized
under
the
provision
of
the
Intestate
Succession
Act.
I
conclude
that
the
part
of
the
property
of
the
estate
with
which
this
discussion
is
concerned
did
not
vest
indefeasibly
in
the
spouse
within
the
prescribed
15
months.
The
Devolution
of
Real
Property
Act
postulates
concepts
which
in
my
opinion
do
not
affect
the
conclusions
I
have
reached
above.
It
deals
with
real
property
and
assimilates
it
to
personal
property
for
the
purpose
of
devolution.
By
section
4
real
property
devolves
upon
and
is
vested
in
the
personal
representative,
a
designation
that
includes
executors
as
well
as
administrators.
By
subsection
(5)
the
personal
representative
holds
real
property
in
trust
for
“the
persons
by
law
beneficially
entitled
thereto”
and
those
persons
are
given
the
same
right
to
require
a
transfer
to
them
of
the
realty
as
they
would
have
if
it
were
personalty.
Then,
section
9
puts
the
personal
representative
temporarily
in
the
place
of
the
heir
of
the
testator
for
the
purpose
of
interpreting
other
provincial
statutes
until
conveyancing
is
actually
made;
and
by
subsection
10(1)
if,
after
the
expiration
of
one
year,
conveyancing
is
not
made
the
beneficiary
is
given
a
remedy.
This
provision
relates
to
the
opinion
expressed
above
that
for
an
interest
to
have
vested
indefeasibly
in
a
spouse
it
is
not
necessary
to
show
actual
conveyance
if
in
the
end
conveyance
is
legally
inevitable.
The
statute
as
I
see
it
bears
only
on
an
administration
of
real
property
and
does
not
of
itself
in
any
relevant
way
purport
to
affect
the
vesting
of
realty
by
testamentary
disposition,
operation
of
law,
or
otherwise.
In
so
far
as
the
interest
of
the
spouse
in
the
estate
includes
an
interest
in
real
property,
this
statute
does
not
add
to
the
matters
to
be
taken
into
account
in
determining
the
issue.
Finally,
I
come
to
the
jurisdiction
given
in
subsection
70(6)
of
the
Act
to
enlarge
the
time
of
15
months
within
which
this
spouse
must
otherwise
establish
her
claim
to
relief.
The
only
way
that
the
vesting
in
her
can
be
effectively
established
for
the
purposes
of
the
Act
when
a
dispute
exists,
is
by
the
judgment
of
this
Court.
The
judgment
of
a
Court
of
Appeal
is
that
which
the
trial
division
ought
to
have
given:
that
is
to
say,
having
effect
on
the
date
of
its
pronouncement
which
in
this
case
was
June
1982.
However,
the
action
was
commenced
in
June
1980
and
I
disregard
the
time
taken
to
proceed
to
trial
and
judgment.
Between
the
expiration
of
the
prescribed
period
of
15
months
and
June
1980
there
is
a
spread
of
some
26
months.
This
is
the
measure
of
the
enlargement
of
time
that
was
denied
by
the
trial
judge
and
which
the
widow
asks
this
Court
to
find
reasonable
in
the
circumstances.
Let
me
say
at
the
outset
that
I
consider
determination
of
what
is
a
reasonable
extension
of
time
in
the
circumstances
of
a
case,
to
be
a
matter
of
judgment
for
the
Court,
not
the
exercise
of
a
discretion
which
an
Appeal
Court
does
not
lightly
disturb.
What
is
reasonable,
whether
of
conduct
when
liability
in
tort
is
in
issue,
or
the
time
that
should
be
extended
in
taking
a
step
in
a
proceeding,
or
for
filing
an
instrument,
or
any
of
the
other
matters
in
respect
of
which
reasonableness
is
prescribed
by
law,
must
of
necessity
and
justice
be
determined
by
a
fair
consideration
of
all
of
the
relevant
circumstances:
the
nature
of
the
matter
to
which
the
time
limitation
applies
and
its
purpose
as
well
as
the
effects
of
an
enlargement
of
time,
to
name
but
three
that
are
obvious.
It
is
upon
such
matters
that
judgment
must
depend
and
an
Appeal
Court
is
as
fully
qualified
for
this
function
as
is
a
trial
judge.
It
is
empowered
to
correct
error
when
such
appears
to
have
occurred.
The
purpose
of
subsection
70(6)
is
to
give
a
measure
of
tax
relief
to
the
Surviving
spouse
of
a
family
unit.
This
is
laudable.
One
can
well
understand
the
reasons
and
motives
that
moved
Parliament
to
its
enactment.
They
set
the
spouse
apart
from
the
commercial
aspects
of
the
tax.
What
is
enacted
is
a
remission
of
tax
burdens
arising
on
the
death
of
a
taxpayer
that
would
otherwise
fall
upon
a
surviving
spouse.
She
(or
he)
is
to
be
helped.
The
enlargement
of
time
jurisdiction
should
be
given
a
generous
operation
so
that
this
purpose
is
not
lightly
defeated:
it
should
not
be
construed
stringently
and
unsympathetically
to
the
purpose.
The
result
of
the
enlargement
is
no
more
than
to
enable
the
spouse
to
obtain
the
same
tax
relief
which
was
available
to
her
in
the
beginning.
Nothing
new,
nothing
offensive
to
the
intent
of
Parliament.
The
time
limit
for
establishing
the
case
for
relief
is
no
doubt
a
departmental
concern
in
bringing
it
to
finality,
but
Parliament
has
recognized
that
there
are
cases
in
which
15
months
is
inadequate.
We
are
not
dealing
here
with
procrastination
on
the
part
of
the
spouse.
I
must
say
that
I
gave
little
weight
to
the
reasons
put
forward
for
the
elapse
of
time
between
the
death
of
the
taxpayer
and
the
engagement
of
a
lawyer.
To
do
so
might
well
open
a
Pandora’s
box
to
trouble
other
litigation.
What
is
of
more
significance
is
the
time
required
by
the
Minister
to
come
to
his
reassessment:
August
1979,
some
29
months
after
the
death
of
the
taxpayer.
This
length
of
time
for
consideration
reflects
the
complexities
of
the
case
with
which
the
spouse
was
also
faced.
It
was
not
until
then
that
the
spouse
could
be
certain
that
her
claim
had
been
rejected,
even
that
arising
out
of
the
Intestate
Succession
Act
upon
which
the
Minister
even
yet
remains
intransigent.
And
then
in
May
1980,
some
9
months
later
again,
the
Minister
upon
further
consideration
made
another
and
upward
reassessment.
I
do
not
put
these
facts
forward
as
matter
of
recrimination
but
only
to
point
out
that
it
took
the
Minister
29
months
to
come
to
a
firm
decision
and
when
the
notice
of
reassessment
was
given
to
the
spouse
she
acted
with
reasonable
diligence
in
the
circumstances
to
establish
her
claim
in
a
way
that
would
be
binding
on
the
Minister
if,
or
to
the
extent,
it
were
to
prevail.
Action
was
commenced
within
a
year.
It
can
well
be
said
that
the
spouse
could
in
law
have
commenced
the
action
within
the
prescribed
15
months.
Had
she
done
so
I
would
think
that
the
result
would
have
been
not
less
favourable
to
her
than
reached
by
this
judgment,
but
the
fact
is
that
she
did
not
and
we
must
decide
whether
the
required
months
of
grace
are
reasonable
in
all
of
the
circumstances.
Taking
them
into
account
and
weighing
them
in
the
light
of
the
considerations
I
have
mentioned,
I
hold
that
the
spouse
has
established
her
claim
to
the
extent
defined
above
within
a
reasonable
time
after
the
expiration
of
the
prescribed
15
month
period.
The
appeal
should
be
allowed
in
part
with
costs
throughout
and
the
reassessment
remitted
to
the
Minister
for
further
reassessment
on
the
basis
that
the
property
given
to
the
spouse
by
the
operation
of
the
Intestate
Succession
Act
became
indefeasibly
vested
in
her
within
15
months
after
the
death
of
the
taxpayer.
Pratte,
J:—The
appellants
are
the
administrators
of
the
estate
of
William
Edward
Hillis.
They
appeal
from
a
judgment
of
the
Trial
Division
dismissing
their
appeal
from
a
reassessment
of
the
income
tax
owing
by
the
late
Mr
Hillis
for
the
1977
taxation
year.
William
Edward
Hillis
was
domiciled
in
Saskatchewan.
He
died
intestate
on
February
21,
1977.
He
was
survived
by
his
wife,
Winnifred
M
Hillis,
and
his
two
sons,
Irvin
and
Gerald,
who
were
all
entitled
to
share
in
his
estate
under
the
Intestate
Succession
Act
of
Saskatchewan.*
Letters
of
Administration
were
granted
to
the
plaintiffs
on
August
4,
1977.
On
June
15,
1977,
Irvin
Hillis
signed
and
sealed
a
document
whereby
he
disclaimed
any
interest
in
the
estate
of
his
father;
on
July
4,
1979,
his
brother,
Gerald,
did
likewise.
As
a
result
of
these
two
disclaimers,
Mrs
Hillis
became
entitled
to
the
whole
estate.
On
November
29,
1979,
for
reasons
that
need
not
be
explained,
Mrs
Hillis
applied
to
the
Court
of
Queen’s
Bench
of
Saskatchewan
under
the
Dependants’
Relief
Act
of
that
province
for
an
order
granting
her
the
entire
estate.**
The
Court
granted
the
application
and
pronounced
the
order
sought
on
December
14,
1979.
The
Minister
of
National
Revenue
reassessed
the
income
tax
payable
by
the
late
William
Edward
Hillis
for
the
year
1977
on
the
basis
that
the
exceptional
rule
found
in
subsection
70(6)
of
the
Income
Tax
Act
did
not
apply.
That
view
was
confirmed
by
the
Trial
Division.
The
issue
on
this
appeal,
therefore,
is
whether
subsection
70(6)
of
the
Income
Tax
Act
applied
in
this
case.
Subsection
70(6)
must
be
read
with
subsection
70(5).
The
relevant
parts
of
these
two
subsections
read
as
follows:
70.
(5)
Where
in
a
taxation
year
a
taxpayer
has
died,
the
following
rules
apply:
(a)
the
taxpayer
shall
be
deemed
to
have
disposed,
immediately
before
his
death,
of
each
property
owned
by
him
at
that
time
that
was
a
capital
property
of
the
taxpayer
(other
than
depreciable
property
of
a
prescribed
class)
and
to
have
received
proceeds
of-
disposition
therefor
equal
to
the
fair
market
value
of
the
property
at
that
time;
(c)
any
person
who,
by
virtue
of
the
death
of
the
taxpayer,
has
acquired
any
particular
capital
property
of
the
taxpayer
(other
than
depreciable
property
of
a
prescribed
class)
that
is
deemed
by
paragraph
(a)
to
have
been
disposed
of
by
him
at
any
time
shall
be
deemed
to
have
acquired
it
immediately
after
that
time
at
a
cost
equal
to
its
fair
market
value
immediately
before
the
death
of
the
taxpayer;
(6)
Where
any
property
of
a
taxpayer
who
was
resident
in
Canada
immediately
before
his
death
that
is
a
property
to
which
paragraphs
5(a)
and
(c)
...
would
otherwise
apply
has,
on
or
after
his
death
and
as
a
consequence
thereof,
been
transferred
or
distributed
to
(a)
his
spouse
who
was
resident
in
Canada
immediately
before
the
taxpayer’s
death,
.
.
.
if
the
property
can,
within
15
months
after
the
death
of
the
taxpayer
or
such
longer
period
as
is
reasonable
in
the
circumstances,
be
established
to
have
become
vested
indefeasibly
in
the
spouse
.
.
.
not
later
than
15
months
after
the
death
of
the
taxpayer,
the
following
rules
apply:
(c)
paragraphs
5(a)
to
(d)
are
not
applicable
to
the
property;
(d)
the
taxpayer
shall
be
deemed
to
have
disposed
of
the
property
immediately
before
his
death
and
to
have
received
proceeds
of
disposition
therefor
equal
to,
(ii)
in
any
other
case,
the
adjusted
cost
base
to
the
taxpayer
of
the
property
immediately
before
his
death,
and
the
spouse
.
.
.
shall
be
deemed
to
have
acquired
the
property
for
an
amount
equal
to
those
proceeds;
.
.
.
It
is
common
ground
that
William
Edward
Hillis
owned
properties
of
the
kind
described
in
subsection
70(6)
which
were,
“after
his
death
and
as
a
consequence
thereof”,
transferred
to
his
wife.
What
is
in
dispute
is
whether
the
other
requirements
of
subsection
70(6)
were
met:
did
those
properties
become
vested
indefeasibly
in
Mrs
Hillis
within
15
months
after
her
husband’s
death
and,
in
the
affirmative,
could
that
fact
be
established
within
the
same
period
of
15
months
or
such
longer
period
as
was
reasonable
in
the
circumstances?
The
Trial
Division
answered
both
these
questions
in
the
negative;
it
is
the
position
of
the
appelants
that
they
should
be
answered
affirmatively.
In
support
of
his
contention
that
the
properties
here
in
question
became
vested
in
Mrs
Hillis
within
15
months
after
the
death
of
her
husband,
counsel
for
the
appellants
argued
that,
by
virtue
of
section
4
of
the
Intestate
Succession
Act,
Mrs
Hillis,
immediately
upon
the
death
of
her
husband,
became
entitled
to
a
sum
of
$10,000
and
to
one-third
of
the
residue
of
the
estate.
In
so
far
as
those
rights
were
concerned,
said
counsel,
they
became
vested
in
Mrs
Hillis
at
the
time
of
the
death
of
her
husband.
As
to
the
other
two-thirds
of
the
residue
of
the
estate,
they
were
acquired
by
Mrs
Hillis,
said
he,
by
virture
of
the
order
made
by
the
Court
of
Queen’s
Bench
under
the
Dependants’
Relief
Act
and,
also,
by
virtue
of
the
disclaimers
executed
by
the
two
sons.
True,
the
order
was
pronounced
and
the
disclaimers
were
signed
more
than
15
months
after
the
death
of
Mr
Hillis;
but,
according
to
counsel,
this
was
of
no
consequence
since,
under
the
law
of
the
province,
the
order
made
under
the
Dependants’
Relief
Act
and
the
disclaimers
had
a
retroactive
effect
to
the
date
of
Mr
Hillis’
death.
Counsel
concluded
that,
because
of
that
retroactive
effect,
the
two-thirds
of
the
estate
that
Mrs
Hillis
acquired
pursuant
to
the
disclaimers
and
the
order
made
under
the
Dependants’
Relief
Act
had
become
indefeasibly
vested
in
her
at
the
time
of
her
husband’s
death.
I
will
deal,
first,
with
the
part
of
the
appellants’
argument
that
relates
to
the
rights
that
Mrs
Hillis
acquired
pursuant
to
the
disclaimers
and
the
order
of
the
Court.
I
will
assume,
for
the
sake
of
discussion,
that
the
order
and
the
disclaimers
had
the
effect
of
vesting
indeafeasibly
the
properties
here
in
question
in
Mrs
Hillis;
I
will
also
assume
that,
under
the
law
of
Saskatchewan,
the
disclaimers
as
well
as
the
order
made
under
the
Dependants’
Relief
Act
had
a
retroactive
effect
to
the
date
of
Mr
Hillis’
death.
On
the
basis
of
these
two
assumptions,
when
did
the
estate
become
indefeasibly
vested
in
Mrs
Hillis?
In
my
view,
when
the
disclaimers
were
executed
and
when
the
order
was
pronounced
since
the
effects
of
the
disclaimers
and
the
Court
order,
in
spite
of
their
retroactivity,
did
not
exist
as
long
as
the
disclaimers
were
not
executed
and
the
Court
order
was
not
pronounced.
It
is
only
when
the
disclaimers
were
executed
and
the
Court
order
was
pronounced
that
Mrs
Hillis
became
entitled
to
the
whole
of
her
husband’s
estate
with
retroactive
effect
to
the
date
of
his
death.
If,
therefore,
the
disclaimers
and
the
Court
order
had,
as
contended
by
the
appellants,
the
effect
of
vesting
the
estate
in
Mrs
Hillis,
that
effect
did
not
take
place
within
15
months
after
the
death
of
Mr
Hillis.
There
remains
to
be
disposed
of
the
first
contention
of
the
appellants
according
to
which
the
rights
to
which
Mrs
Hillis
was
entitled
under
the
Intestate
Succession
Act
(i.e.,
$10,000
plus
one-third
of
the
residue
of
the
estate)
became
indefeasibly
vested
in
her
at
the
time
of
her
husband’s
death.
In
order
to
appreciate
that
argument,
it
is
necessary
to
bear
in
mind
that
subsection
70(6)
applies
when
some
particular
properties
of
the
kind
described
in
the
subsection
have
been
transferred
to
a
widow
as
a
consequence
of
her
husband’s
death,
if
those
properties
became
vested
indefeasibly
in
the
widow
within
15
months
of
the
death
of
her
husband.
In
order
for
subsection
70(6)
to
apply,
therefore,
the
widow
must,
within
the
15
months,
have
become
vested
indefeasibly
with
the
properties
that
were
later
transferred
to
her;
it
is
not
sufficient
for
the
wife
to
have
acquired,
within
the
time
prescribed,
rights
in
the
estate
of
her
husband.
Under
the
Intestate
Succession
Act,
Mrs
Hillis
became
entitled,
on
the
death
of
her
husband,
to
a
sum
of
$10,000.00
and
to
one-third
of
the
residue
of
his
estate.
However,
all
the
property
of
the
deceased
devolved
and
was
vested
in
his
personal
representatives.*
As
Mrs
Hillis’
rights
under
the
Intes
tate
Succession
Act
were
merely
rights
to
a
sum
of
money
and
to
a
share
of
the
residue
of
the
estate,
she
had
no
specific
interest
in
any
of
the
property
comprising
in
the
residue
until
that
residue
had
been
ascertained
in
due
course
of
administration.*
From
the
mere
fact,
therefore,
that
Mrs
Hillis,
on
the
death
of
her
husband,
acquired
rights
under
the
Intestate
Succession
Act,
it
cannot
be
inferred
that
she,
thereby,
became
vested
indefeasibly
with
the
properties
that
were
later
transferred
to
her.
I
would,
therefore,
dismiss
the
appeal
with
costs.
Heald,
J.:—I
have
read
the
reasons
for
judgment
of
my
brother
Pratte,
J.
However,
I
find
it
necessary
to
come
to
a
different
conclusion.
Mr
Justice
Pratte
has
summarized
the
essential
facts
and
I
see
no
need
to
repeat
them.
As
stated
by
him,
the
issue
in
this
appeal
is
whether
subsection
70(6)
of
the
Income
Tax
Act
applies
in
the
circumstances
of
this
case
to
relieve
the
appellants
from
the
provisions
of
subsection
70(5)
of
the
Income
Tax
Act.
The
relevant
parts
of
these
two
subsections
read
as
follows:
70.
(5)
Where
in
a
taxation
year
a
taxpayer
has
died,
the
following
rules
apply:
(a)
the
taxpayer
shall
be
deemed
to
have
disposed,
immediately
before
his
death,
of
each
property
owned
by
him
at
that
time
that
was
a
capital
property
of
the
taxpayer
(other
than
depreciable
property
of
a
prescribed
class)
and
to
have
received
proceeds
of
disposition
therefor
equal
to
the
fair
market
value
of
the
property
at
that
time;
(c)
any
person
who,
by
virtue
of
the
death
of
the
taxpayer,
has
acquired
any
particular
capital
property
of
the
taxpayer
(other
than
depreciable
property
of
a
prescribed
class)
that
is
deemed
by
paragraph
(a)
to
have
been
disposed
of
by
him
at
any
time
shall
be
deemed
to
have
acquired
it
immediately
after
that
time
at
a
cost
equal
to
its
fair
market
value
immediately
before
the
death
of
the
taxpayer;
(6)
Where
any
property
of
a
taxpayer
who
was
resident
in
Canada
immediately
before
his
death
that
is
a
property
to
which
paragraphs
5(a)
and
(c)
...
would
otherwise
apply
has,
on
or
after
his
death
and
as
a
consequences
thereof,
been
transferred
or
distributed
to
(a)
his
spouse
who
was
resident
in
Canada
immediately
before
the
taxpayer’s
death,
..
.
if
the
property
can,
within
15
months
after
the
death
of
the
taxpayer
or
such
longer
period
as
is
reasonable
in
the
circumstances,
be
established
to
have
become
vested
indefeasibly
in
the
spouse
.
.
.
not
later
than
15
months
after
the
death
of
the
taxpayer,
the
following
rules
apply:
(a)
paragraphs
5(a)
to
(d)
are
not
applicable
to
the
property;
(d)
the
taxpayer
shall
be
deemed
to
have
disposed
of
the
property
immediately
before
his
death
and
to
have
received
proceeds
of
disposition
therefor
equal
to,
(ii)
in
any
other
case,
the
adjusted
cost
to
the
taxpayer
of
the
property
immediately
before
his
death,
and
the
spouse
.
..
shall
be
deemed
to
have
acquired
the
property
for
an
amount
equal
to
those
proceeds;
.
.
.
The
answer
to
this
question
depends,
in
turn,
on
whether
(a)
subject
properties
became
vested
indefeasibly
in
the
widow,
the
appellant
Winnifred
M
Hillis,
within
15
months
after
February
21,
1977
(the
date
of
death
of
her
husband,
William
Edward
Hillis),
and
(b)
if
so,
could
that
indefeasible
vesting
be
established
within
15
months
after
the
husband’s
death
or
within
such
longer
period
as
is
reasonable
in
the
circumstances.
The
appellants
rely
on
the
following
provisions
of
the
Dependants’
Relief
Act
of
Saskatchewan,
RSS
1978,
chapter
D-25:
4.
(1)
Where
a
person
dies
leaving
a
dependant
or
dependants,
an
application
may
be
made
to
the
court
by
or
on
behalf
of
any
dependant
for
an
order
making
reasonable
provision
for
his
or
her
maintenance.
(2)
Where
an
application
is
made
under
subsection
(1)
by
or
on
behalf
of
a
dependant
of
an
intestate,
then,
for
the
purpose
of
this
Act,
the
intestate
shall
be
deemed
to
be
a
testator
and
to
have
provided
by
will
for
distribution
of
his
estate
as
on
an
intestacy,
and
this
Act
shall
be
construed
accordingly.
RSS
1965,
c
128,
3.4;
1967,
c
23,
s
3.
14.
(1)
Where
an
order
is
made
under
this
Act,
then
for
all
purposes,
including
the
purposes
of
enactments
relating
to
succession
duties,
the
will
shall
have
effect,
and
shall
be
deemed
to
have
had
effect
from
the
testator’s
death,
as
if
it
had
been
executed
with
such
variations
as
are
specified
in
the
order,
for
the
purpose
of
giving
effect
to
the
provision
for
maintenance
made
by
the
order.
15.
No
order
shall
be
made
unless
on
an
application
made
within
six
months
from
the
grant
of
probate
of
the
will
or
of
administration,
but
the
court
may,
if
it
deems
it
just,
allow
an
application
to
be
made
at
any
time
as
to
any
portion
of
the
estate
remaining
undistributed
at
the
date
of
the
application.
RSS
1965,
c
128,
s
15.
Pursuant
to
subsection
4(2)
supra,
when,
as
in
this
case,
an
application
has
been
made
under
that
Act
for
relief,
the
intestate
is
deemed
to
be
a
testator
and
to
have
provided
by
will
for
distribution
of
his
estate
as
on
an
intestacy.
Pursuant
to
section
4
of
the
Intestate
Succession
Act
of
Saskatchewan,
RSS
1978,
chapter
1-13*,
the
appellant
widow
was
entitled,
on
intestacy,
to
the
sum
of
$10,000
with
legal
interest
thereon
from
February
21,
1977
together
with
one-third
of
the
remainder
of
the
estate.
On
November
29,
1979
she
applied
to
the
Court
of
Queen’s
Bench,
pursuant
to
subsection
4(1)
of
the
Dependant’s
Relief
Act
for
an
order
granting
her
the
entire
estate
of
her
deceased
husband.
Mr
Justice
Noble
of
that
Court
granted
her
application
by
order
dated
December
14,
1979.
It
is
not
mentioned
in
the
Court’s
order,
but
in
my
view,
it
is
implicit
in
the
order
that
the
learned
Motion’s
Judge,
pursuant
to
section
15
of
that
Act,
granted
the
applicant
an
extension
of
time
for
making
the
application.
I
agree
with
the
appellant’s
counsel
that
the
wording
of
subsection
70(6)
of
the
Income
Tax
Act
contemplates
the
disposition
of
property
other
than
by
will,
as
well
as
by
will,
since
it
deals
with
the
transfer
or
distribution
of
property
after
the
death
of
a
taxpayer
and
.
.
as
a
consequence
thereof
.
..”.
This
wording,
in
my
view,
makes
it
clear,
that
Parliament
contemplated
that
the
law
of
the
provinces
in
respect
of
the
disposition
of
property
on
or
after
death,
being
matters
relating
to
property
and
civil
rights,
would
apply
so
as
to
control
the
application
of
subsection
70(6)
in
accordance
with
the
law
of
the
particular
province
concerned.
A
further
indication
of
the
intention
of
Parliament
is
to
be
found
in
the
provisions
of
subsection
70(6.1)
of
the
Income
Tax
Act."
Subsection
(c)
of
that
subsection
specifically
refers
to
a
Court
order
of
the
kind
made
by
the
Saskatchewan
Court
of
Queen’s
Bench
in
this
case.
On
this
basis,
it
is
necessary
to
have
regard
to
the
applicable
provisions
of
the
Dependants’
Relief
Act
of
Saskatchewan.
Subsection
4(2)
deems,
on
the
facts
of
this
case,
the
intestate
taxpayer
to
be
a
testator
providing
for
the
distribution
of
his
estate
as
on
an
intestacy.
Subsection
14(1)
provides
that
where,
as
here,
a
Court
order
has
been
made,
the
deemed
disposition
by
will
(pursuant
to
subsection
4(2))
..
shall
have
ef-
fect,
and
shall
be
deemed
to
have
had
effect
from
the
testator’s
death,
as
if
it
had
been
executed
with
such
variations
as
are
specified
in
the
order,
for
the
purpose
of
giving
effect
to
the
provision
for
maintenance
made
by
the
order”.
The
Queen’s
Bench
order
in
this
case
ordered,
inter
alia:
“.
.
.
that
the
assets
of
the
Estate
of
William
Edward
Hillis
are
hereby
granted
to
Winnifred
M
Hillis
.
..”.
In
view
of
the
provisions
of
subsections
4(2)
and
14(1)
supra,
I
conclude
that
subject
order
vested
the
entire
estate
of
the
deceased
taxpayer
in
the
widow
which
vesting
is
deemed
to
have
had
effect
from
the
taxpayer’s
death.
I
do
not
subscribe
to
the
view
that
the
taxpayer’s
estate
became
indefeasibly
vested
in
the
widow
only
from
and
after
the
date
of
the
Court
order.
To
accept
that
view
is
to
ignore
the
provisions
of
subsection
14(1)
supra.
That
subsection
uses
the
words:
“shall
be
deemed”.
Blacks
Law
Dictionary,
5th
edition
defines
“deem”
as:
“To
hold;
consider;
adjudge;
condemn;
determine;
treat
as
if;
construe”.
I
interpret
this
as
meaning
that
subject
Court
order
shall
be
construed
and
treated
as
if
it
was
made
on
the
date
of
the
taxpayer’s
death.
In
the
case
of
Barclays
Bank
Ltd
v
Inland
Revenue
Commissioners,
[1961]
AC
509,
Viscount
Simonds,
in
discussing
the
meaning
of
the
word
“deem”
when
used
in
a
statute
said
that
he
regarded
.
.
its
primary
function
as
to
bring
in
something
which
would
otherwise
be
excluded”.
I
agree
with
that
interpretation
of
the
word
“deem”
and
apply
it
to
the
expression
“shall
be
deemed”
as
used
in
subsection
14(1).
I
think
that
expression
brings
into
the
operation
of
subsection
14(1)
something
which
would
otherwise
be
excluded,
namely,
the
indefeasible
vesting
of
the
taxpayer’s
property
of
the
widow
at
the
date
of
death.
Without
the
deeming
provision
in
subsection
14(1),
the
Court
order
would
only
operate
from
the
date
on
which
it
was
pronounced.
With
the
deeming
provision,
the
vesting
is
to
be
construed
and
treated
as
if
made
at
date
of
death.
To
interpret
subsection
14(1)
otherwise
results,
in
my
view,
in
absurdity
and
unfairness
and
would
produce
results
which
I
cannot
conceive
were
ever
intended
by
Parliament.
If
the
indefeasible
vesting
required
for
the
application
of
the
subsection
70(6)
exemption
is
to
be
effective
only
from
the
date
of
an
order
made
under
the
Dependants’
Relief
Act
of
Saskatchewan
or
on
the
parallel
legislation
in
effect
in
most
of
the
other
provinces,
then
a
widow
in
the
position
of
this
widow,
for
whose
maintenance
reasonable
provision
has
not
been
made,
either
because
of
intestacy
or
because
of
inadequate
provisions
in
a
taxpayer’s
will,
will
stand
in
jeopardy
of
losing
the
benefit
of
an
exempting
provision
which
Parliament,
in
my
view,
clearly
intended
to
provide
to
persons
in
her
circumstances.
Subsections
5(a)
and
(c)
of
the
Income
Tax
Act
provide
rules
which
apply
to
the
capital
property
of
a
deceased
taxpayer.
Subsection
5(a)
deems
the
taxpayer
to
have
disposed
of
that
property
immediately
before
his
death
at
the
fair
market
value
of
the
property
at
that
time.
Subsection
5(c)
deems
the
person
who
has
acquired
any
of
that
capital
property,
to
have
acquired
it
at
its
fair
market
value
immediately
before
the
death
of
the
taxpayer.
The
net
effect
of
those
subsections
is
to
provide
for
a
deemed
capital
gain
on
the
death
of
a
taxpayer
where
the
fair
market
value
of
property
at
the
date
of
death
exceeds
the
adjusted
cost
base
to
the
taxpayer
of
that
property.
This
is
clearly
an
onerous
provision
and,
in
many
cases,
this
notional
concept
of
capital
gain
imposes
considerable
hardship
on
the
beneficiaries
of
an
estate,
particularly
an
estate
comprised
largely
of
real
property
with
few
liquid
assets
from
which
the
income
tax
made
payable
because
of
the
notional
capital
gains,
can
be
paid.
The
fact
that
subsection
(6)
was
enacted
makes
it
evident
that
Parliament
recognized
the
severity
of
the
provisions
of
subsection
(5)
by
providing
therein
for
a
“rollover”
to
the
widow
without
the
notional
capital
gain
imposed
by
subsection
(5)
.
As
pointed
out
by
counsel
for
the
respondent,
the
effect
of
subsection
(6)
is
to
defer
the
capital
gain
imposed
by
subsection
(5)
so
long
as
the
capital
property
is
owned
by
the
widow.
In
the
event
the
widow
sells
the
property
or
it
passes
on
her
death
to
her
beneficiaries,
then
any
capital
gain
resulting
would
attract
income
tax
in
the
normal
way
in
accordance
with
the
provisions
of
the
Act.
If
the
benefit
of
the
rollover
provisions
of
subsection
70(6)
is
restricted
to
those
widows
who
have
been
successful
in
obtaining
a
Court
order
within
15
months
of
the
date
of
death
of
the
taxpayer,
the
result
is
to
subject
all
widows
to
a
number
of
contingencies
beyond
their
control.
As
pointed
out
by
counsel
for
the
appellant,
in
some
estates,
much
time
is
consumed
in
obtaining
an
inventory
of
assets
and
liabilities,
more
time
is
spent
in
obtaining
valuations
of
real
property
and
this
is
particularly
so
as
in
this
case
where
farm
land
valuations
are
involved
and,
in
some
cases,
tardiness
and
procrastination
of
executors
or
administrators
is
a
factor
as
well.
When
it
is
remembered
that,
in
the
case
of
the
Saskatchewan
Act,
the
application
for
relief
under
subsection
4(1)
supra,
cannot
be
made
until
after
the
grant
of
Letters
Probate
or
Letters
of
Administration,
I
perceive
that
a
significant
number
of
spouses
of
deceased
taxpayers
would
be
deprived
of
the
subsection
70(6)
exemption
were
the
interpretation
proposed
by
the
respondent
to
prevail.
Since,
in
my
view,
subsection
70(6),
correctly
interpreted,
has
the
effect
of
indefeasibly
vesting
subject
property
in
Mrs
Hillis
as
of
the
date
of
her
husband’s
death
and
since
any
other
interpretation
would
do
violence
to
the
purpose
and
intent
of
the
subsection,
I
conclude
that
she
has
satisfied
the
initial
requirement
specified
therein.
There
remains
to
be
considered
whether
the
second
requirement
of
the
subsection
has
also
been
satisfied.
I
refer
to
the
additional
requirement
that
the
indefeasible
vesting
within
15
months
of
death
must
also
“be
established”
within
that
same
15
month
period
or
“such
longer
period
as
is
reasonable
in
the
circumstances”.
The
learned
trial
judge,
on
his
appreciation
of
the
evidence,
said
that
he
could
“see
no
reason
why
the
estate
could
not
easily
have
been
fully
administered
and
wound
up
within
six
or
seven
months
following
the
death
of
the
deceased”.
However,
he
reached
this
conclusion
after
reviewing
the
evidence
and
in
that
review
he
said
that
the
date
at
which
a
lawyer
was
engaged
was
not
disclosed
in
the
evidence.
That
statement
is
incorrect.
The
evidence
clearly
discloses
that
the
widow
first
saw
a
lawyer
in
the
fall
of
1979
and
only
then
became
aware
of
her
rights
under
the
Dependant’s
Relief
Act
as
a
result
of
which
the
application
under
that
Act
was
commenced
on
November
29,
1979.
In
view
of
this
fact
and
the
fact
that
prior
to
1979,
the
administration
of
the
estate
was
handled
by
an
accountant,
rather
than
a
solicitor,
and
that
long
delays
occurred
through
his
unsatisfactory
handling
of
these
matters,
I
think
that
the
conclusion
reached
by
the
trial
judge
supra
was
not
reasonably
open
to
him
on
the
evidence,
particularly
when
the
totality
of
that
evidence
is
viewed
from
the
perspective
of
the
reasonableness
of
the
delay.
For
these
reasons
and
in
all
the
circumstances
of
this
case,
I
conclude
that
the
indefeasible
vesting
within
15
months
has
been
established
within
a
period
of
time
which
is
reasonable
thus
satisfying
the
second
requirement
of
subsection
70(6).
On
this
basis,
I
think
that
the
widow
is
entitled
to
the
benefit
of
the
exempting
provisions
of
subsection
70(6)
and
that
the
appeal
should
be
allowed
with
costs.
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