SHEPPARD,
D.J.:—This
appeal
is
by
Electric
Power
Equipment
Limited
as
appellant
from
an
assessment
for
the
taxation
years
1964
and
1965
by
the
Minister,
who
held
that
the
appellant
and
two
other
corporations,
namely,
Grassington
Estates
Limited
and
Bartholomew
Engineering
Limited,
were
associated
with
each
other
and
therefore
taxable
as
associated
under
Section
39
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
and
amendments.
The
appellant
contends
that
it
was
not
associated
with
those
companies
and
therefore
the
assessment
was
in
error.
That
is
the
issue.
The
facts
follow.
In
Electric
Power
Equipment
Limited
(the
appellant)
four
sons
and
daughters
of
F.
J.
Bartholomew
held
133
of
the
voting
common
shares
out
of
191
issued,
therefore
that
group
controlled
the
corporation;
Bartholomew
Engineering
Limited
held
6,958
non-voting
common
shares
out
of
18,909
issued.
In
Grassington
Estates
Limited,
Bartholomew
Engineering
Limited
held
2,498
voting
common
shares
out
of
2,500
issued
and
in
Bartholomew
Engineering
Limited,
F.
J.
Bartholomew
held
51
of
the
voting
common
shares
out
of
100
issued.
After
the
appellant
had
filed
returns
for
the
taxation
years
1964
and
1965,
the
Minister
made
a
re-assessment
holding
that
the
appellant
was
deemed
to
be
associated
within
Section
39
and
assessed
accordingly.
The
appellant
then
filed
a
notice
of
objection
and
the
Minister
confirmed
the
re-assessment.
Eventually
there
was
an
appeal
to
this
Court.
The
parties
have
agreed
that
if
the
appellant
and
Grassing-
ton
Estates
Limited
were
held
to
be
associated,
then
Bartholomew
Engineering
Limited
would
be
associated,
hence
the
sole
question
is
whether
the
appellant
and
Grassington
Estates
Limited
are
associated,
and
that
turns
upon
the
meaning
of
Section
39(4)
(d)
of
the
Income
Tax
Act
which
reads
as
follows:
39.
(4)
For
the
purpose
of
this
section,
one
corporation
is
associated
with
another
in
a
taxation
year
if,
at
any
time
in
the
year,
(d)
one
of
the
corporations
was
controlled
by
one
person
and
that
person
was
related
to
each
member
of
a
group
of
persons
that
controlled
the
other
corporation,
and
one
of
those
persons
owned
directly
or
indirectly
one
or
more
shares
of
the
capital
stock
of
each
of
the
corporations,
.
..
The
issue
turns
upon
the
meaning
of
the
words
‘‘one
of
those
persons’’
appearing
in
Section
39(4)
(d).
The
appellant
contends
that
those
words
refer
to
‘‘each
member
of
a
group
of
persons’’
so
that
the
true
meaning
is
that
one
of
the
group
of
four
sons
and
daughters
of
F.
J.
Bartholomew
who
controlled
the
appellant
corporation
must
also
hold
shares
in
Grassington
Estates
Limited,
and
as
no
member
of
that
group
held
shares
in
Grassington
Estates
Limited,
therefore
the
appellant
and
the
Grassington
Corporation
were
not
associated.
On
the
other
hand,
the
Minister
contends
that
the
phrase
to
be
construed
‘‘one
of
those
persons’’,
means
that
the
‘‘one’’
may
be
selected
from
all
those
‘‘persons’’
previously
referred
to
in
Section
39(4)
(d)
as
‘‘one
person’’,
‘‘that
person’’
and
‘‘each
member
of
a
group
of
persons’’,
and
further
that
in
each
instance
the
person
or
persons
may
be
a
natural
person
or
a
body
corporate.
The
appellant
supports
its
contention
on
the
grounds:
(a)
that
the
words
‘‘those
persons’’
appearing
in
Section
39(4)
(d)
should
be
taken
to
refer
back
to
the
nearest
possible
antecedent,
and
that
is
‘‘a
group
of
persons’’,
and
(b)
that
a
taxing
statute
should
be
clear
in
imposing
a
tax
and
there
is
at
least
an
ambiguity
as
to
whether
the
ante-
cedent
referred
to
by
the
words
‘‘one
of
those
persons’’
is
one
of
the
group
or
all
of
the
persons
which
are
referred
to
previously
in
that
subsection.
Therefore,
as
the
group
does
not
hold
shares
in
the
Grassington
Estates
Limited
the
two
corporations
are
not
associated
and
the
appeal
should
be
allowed.
That
contention
fails
for
various
reasons.
(1)
The
intention
of
the
section
is
apparent
that
‘‘one
of
those
persons”
who
by
the
subsection
is
to
own
one
or
more
shares
in
each
of
the
corporations
is
not
necessarily
one
of
the
group.
(a)
“One
of
those
persons’’
need
hold
only
‘‘one
or
more
shares’’—of
each
of
the
corporations.
That
does
not
require
the
holding
of
shares
as
one
of
the
group
having
control.
(b)
“One
person’’
referred
to
in
the
first
part
of
the
subsection
and
again
referred
to
as
“that
person”
is
described
as
‘‘related
to
each
member.
of
a
group’’,
hence
he
need
not
be
one
of
the
group,
otherwise
being
related
to
each
member
of
the
group,
he
would
be
related
to
himself.
Being
related
to
oneself
can
only
occur
where
permitted
by
statute,
as
in
Section
139(5d)(c)
referred
to
in
Motivair
Lid.
v.
M.N.R.,
40
Tax
A.B.C.
129
at
134,
but
it
is
not
a
usual
meaning
of
being
related.
It
follows
that
there
is
some
difficulty
in
construing
‘‘one
of
those
persons”?
as
referring
back
to
‘‘a
group
of
persons’’
so
as
to
exclude
‘‘one
person’’
and
‘‘that
person’’,
also
previously
mentioned
in
Section
39(4)
(d).
(2)
In
effect
Section
39(4)
(d)
deals
expressly
with
two
corporations
of
which
(a)
one
corporation
is
controlled
by
one
person
who
is
related
to
each
member
of
a
group
of
persons;
(b)
another
corporation
which
is
controlled
by
that
group
of
persons,
and
the
section
requires
(c)
that
‘‘one
of
those
persons’’
holds
one
or
more
shares
of
each
of
the
two
corporations.
The
words
‘‘each
member’’
and
‘‘group’’
are
here
distinctive
as
readily
identifying
certain
persons
and
if
the
words
in
question,
‘‘one
of
those
persons’’
were
intended
to
be
restricted
to
that
group,
that
could
have
been
done
clearly.
by
using
such
distinctive
terms
as
‘‘member’’
or
‘‘group’’.
In
place
of
doing
so,
Parliament
has
chosen
other
words,
namely,
‘‘one
of
those
persons’’,
and
the
word
‘‘persons’’
is
different:
(a)
as
a
word
capable
of
including
all
who
have
been
previously
referred
to
in
that
subsection
as
‘‘one
person”,
“that
person”?
or
‘‘each
member
of
a
group
of
persons’’,
in
that
the
plural
includes
the
singular:
Interpretation
Act,
R.S.C.
1952,
ce.
158,
Section
31(j)
;
(b)
as
the
word
‘‘persons’’
has
been
expressly
defined
as
extending
to
include
a
body
corporate
(Section
139
(1)
(ac)
).
In
a
proper
construction
due
effect
may
be
given
to
that
difference:
Hurlbatt
v.
Barnett,
[1893]
1
Q.B.
77,
Lord
Esher,
M.R.
at
p.
79
and
Lopes,
L.J.
at
p.
80;
Bradlaugh
v.
Clarke
(1882),
8
App.
Cas.
354,
the
Earl
of
Selborne,
L.C.
at
p.
368,
and
that
may
be
done
here
by
construing
the
words
in
question,
“one
of
those
persons’’
as
intending
to
select
one
from
that
class
of
persons
which
includes
all
those
previously
designated
as
“person”
or
‘‘persons’’.
Such
implied
intention
is
against
construing
‘‘one
of
those
persons’’
as
equivalent
to
“each
member
of
a
group
of
persons’’,
and
thereby
restricting
‘‘persons’’
to
a
member
of
that
group.
(3)
However
much
could
be
said
for
the
contention
of
the
appellant,
if
the
words
‘‘person’’
or
‘‘persons’’
were
to
be
construed
as
referring
only
to
a
natural
person,
that
is
not
the
case
here.
Under
the
statute
a
natural
person
is
defined
as
an
individual
(Section
139(1)
(u))
but
“person”
includes
a
body
corporate
(Section
139(1)
(ac)),
also
the
plural
includes
the
singular:
Interpretation
Act,
supra,
Section
31
(j).
Therefore
wherever
“person”
or
‘‘persons’’
appears
in
the
section
that
word
must
be
read
as
including
an
individual
and
a
body
corporate
and
when
so
construed,
Section
39(4)
(d)
may
be
read
as
follows
:
(d)
one
of
the
corporations
(Grassington
Estates
Limited)
was
controlled
by
one.
person
(which
could
include
Bartholomew
Engineering
Limited)
and
that
person
(Bartholomew
Engineering
Limited)
was
related
to
each
member
of
a
group
of
persons
(which
may
be
individuals
or
corporations,
and
here
contended
by
the
Minister
to
be
the
four
sons
and
daughters)
that
controlled
the
other
corporation
(Electric
Power
Equipment
Limited),
and
one
of
those
persons
(which
may
be
a
corporation,
and
hence
Bartholomew
Engineering
Limited)
owned
directly
or
indirectly
one
or
more
shares
of
the
capital
stock
of
each
of
the
corporations
(that
is
capital
stock
of
Electric
Power
Equipment
Limited
and
of
Grassington
Estates
Limited),
As
Bartholomew
Engineering
Limited
held
6,958
non-voting
shares
in
the
appellant
company
and
2,498
shares
of
the
Grassington
Estates
Limited,
therefore
Bartholomew
Engineering
Limited
held
‘‘one
or
more
shares
of
the
capital
stock
of
each
of
the
corporations’’
as
required
by
the
subsection,
namely,
in
the
appellant
and
in
Grassington
Estates
Limited.
Further,
Bartholomew
Engineering
Limited
was
“related
to
each
member
of
a
group
of
persons
that
controlled
the
other
corporation’’
(Electric
Power
Equipment
Limited),
that
is;
was
related
to
the
four
sons
and
daughters
who
controlled
the
appellant
company.
That
is
admitted
(Agreement,
Exhibit
1,
Clause
6)
and
appears
from
the
Income
Tax
Act,
Section
139
(5a)
(made
applicable
by
Section
39(4a)
(a))
as
follows:
F.
J.
Bartholomew
controlled
and
therefore
was
related
to
Bartholomew
Engineering
Limited
(Section
139(5a)
(b)
(i)
)
and
the
four
sons
and
daughters
who
controlled
the
appellant
being
related
to
their
father,
F.
J.
Bartholomew
(Section
139
(5a)
(a)),
who
was
related
to
Bartholomew
Engineering
Company
(Section
139
(5a)
(b)
(i)
),
were
also
related
to
Bartholomew
Engineering
Limited
(Section
139
(5a)
(b)
(iii)
).
Therefore
Bartholomew
Engineering
Limited,
the
person
which
controlled
Grassington
Estates
Limited,
‘‘was
related
to
each
member
of
the
group
of
persons’’
(the
four
sons
and
daughters)
‘‘that
controlled
the
other
corporation’’
(Electric
Power
Equipment
Limited).
Hence
all
is
as
required
by
Section
39(4)
(d).
Under
Section
39(4)
(d)
‘‘one
of
those
persons’’
must
be
read
as
capable
of
referring
to
a
natural
person
or
to
a
corporation,
and
therefore
cannot
necessarily
be
confined
to
that
group
of
individuals
who
controlled
the
appellant.
Again,
the
contention
of
the
appellant
does
not
include
those
instances
clearly
within
Section
39(4)
(d)
where
one
corporation
is
controlled
by
another
corporation
(‘‘a
person’’)
and
that
controlling
corporation
(described
as
‘‘that
person’’)
is
related
to
each
member
of
the
group
of
individuals
who
control
the
other
corporation
and
has
the
requisite
share
in
the
two
controlled
corporations.
That
is
a
meaning
which
is
here
contended
for
by
the
Minister
and
should
be
accepted.
In
conclusion,
the
re-assessments
are
affirmed
and
the
appeal
is
dismissed,
with
costs
to
the
Minister.
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