Supreme Court of Canada
The King
v. Assessors of Sunny Brae (Town), [1952] 2 S.C.R. 76
Date:
1952-02-05
The King Appellant;
and
The Assessors Of The Town Of Sunny Brae Respondent.
1951: October 18, 19; 1952: February 5.
Present: Rinfret C.J. and Kerwin, Rand, Kellock, Estey, Locke
and Cartwright JJ.
Ex Parte Les Dames Religieuses de Notre Dame de
Charité du Bon Pasteur.
ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL
DIVISION
Assessment—Taxes—Religious Congregation operating
laundry and dry cleaning business in competition with other firms in like
business—The Rate and Taxes Act, R.S.N.B., 1927, c. 190, s. 4(1) (d) and
(g)—Whether appellant's buildings, and equipment exempt under clauses (d)
and/or (g)—Meaning of word "charitable" as used in clause (g).
The Rates and Taxes Act, R.S.N.B. 1927, c. 190,
exempts from taxation s. 4(1):
"(d) Every building of a religious
organization used exclusively … for the religious, philanthropic or educational
work of such organization, with its site and ground surrounding the same upon
which no other building is erected, but this exemption shall not include real
estate in respect of which rent is received by such organization; also the
personal property and income of such organization, used exclusively for religious,
philanthropic or educational purposes;
(g) The property of any literary or charitable
institution."
The appellant is a religious society devoted exclusively to
the furtherance of the education of girls generally and in particular to the
education and reformation of wayward girls, and the education and care of
female orphan children. Its members have taken the vows of poverty and receive
no wages and any revenue is expended exclusively for the furtherance of the
purposes of the Society. Girls are received regardless of their race or creed
or ability to pay. The appellant owns real estate on which is erected a main
building which provides accommodation for the inmates and includes a school and
a public laundry and dry cleaning plant where the girls are taught habits of
industry and fitted to earn a living. The plant is in public competition with
commercial laundries. There is also on the property a two-family brick dwelling
occupied by two male employees and their families. The men are employed as
truck drivers. The appellant was incorporated in 1945 by a special act of the
N.B. Legislature for the purpose of carrying out its objects as set out above
and was authorized to purchase land and erect buildings for such purposes and
as incidental thereto for the maintenance of the institution, to carry on the
business of a steam and general laundry.
[Page 77]
The respondent assessed the laundry equipment, two motor
trucks used in the business and the brick dwelling. The appellant claims
exemption under s. 4(1) clauses (d) and (g).
Held: (Rinfret C.J., Kerwin and Cartwright JJ.
dissenting).
1. In construing s. 4(1), clause (g) must be
regarded as a general clause and clause (d) as a particular clause and
to avoid repugnancy or inconsistency (d) must be taken to be an exception
to (g).
2. The appellant is not a "charitable society or
institution" within the meaning of clause (g); Cocks v. Manners
L.R. 12 Eq. 574; In re White [1893] 2 Ch. 41; but a society of mixed
objects, some charitable and some not, and must find exemption, if any, under
clause (d).
3. The use referred to in (d) is the actual use
to which the property is put and not the object to which the profits from the
business carried on may be devoted.
Per Estey J. The equipment used in the conduct of the
business serves not only the appellant organization, but the public generally.
It therefore cannot be said to be "used exclusively for religious,
philanthropic or educational purposes."
Per: Rinfret C.J., Kerwin and Cartwright JJ.,
dissenting—Whether the word "charitable" as used in clause (g)
is to be construed in its legal sense or in its natural and ordinary
meaning, the appellant is a "charitable society or institution,"
notwithstanding its operation of the laundry and dry-cleaning plant, within the
meaning of those words as used in clause (g). Birtwistle Trust v.
Minister of National Revenue [1938] Ex. C.R. 95 at
101; affirmed by [1940] A.C. 138; In re Douglas—Obert v. Barrow 35
Ch. D 472 at 479 and 487. In the contemplation of the Legislature as expressed
in the statute of incorporation the operation of the laundry business is merely
incidental to the charitable purposes of the appellant and the maintenance
thereof. This is not the case of an institution carrying on a commercial
business and incidentally performing sundry charitable works or paying over its
profits to others for charitable purposes, but of a society or institution of
which all the primary purposes are purely charitable which is actively engaged
on charitable works and as an incidental means of providing some of the money
which is required for the prosecution of such charitable works carries on a
business under its statutory powers. It is a charitable society or institution
within the meaning of those words as used in clause (g) and it
follows that all its property is exempt from taxation.
APPEAL from a decision of the Supreme Court of New
Brunswick, Appeal Division, Richards C.J. and Harrison J. (Hughes J.
dissenting) dismissing an application by way of
Certiorari by the appellant calling upon the respondent to show cause why an
assessment upon the appellants' property in the Town of Sunny Brae should not
be quashed.
John Carvell for the appellant. If there is no evidence
that rent is received for the brick dwelling house, then the finding
that it is must be erroneous. The only evidence
[Page 78]
regarding the receipt of rent by the Society for any of its
property appears in the affidavits of the Town Clerk and the Chairman of the
Board of Assessors; these affidavits merely depose the fact that rent is paid
for the dwelling "or included in the salary or wages paid" the
employees who occupy it. Since the saving of expense by paying employees by
supplying them a dwelling is not the receipt of rent, this alternative
deposition is not evidence that rent is received. Therefore the finding
that rent is received is erroneous and this building should be exempt from
taxation.
The laundry and dry-cleaning equipment, and property used in
conjunction therewith, which is the property of the Society, is exempt from
taxation if it is used exclusively for religious, philanthropic or educational
purposes. The Rates and Taxes Act, s. 4(1) (d), which is
made applicable by s. 75 of The Towns Incorporation Act. The finding
that this property is not so used is erroneous. The property of the Society is
used exclusively for religious, philanthropic or educational purposes since
these are the only purposes of the Society. In re House of the Good Shepherd
of Omaha, House of the Good Shepherd of Omaha v. Board of Equalization of
Douglas County . Where the incorporating statute of the
Society provides that it may carry on the business of a general laundry etc. as
"incidental to", meaning part of its philanthropic and
educational purposes, it follows that the laundry and dry-cleaning equipment
and property used in conjunction therewith is exempt from taxation.
All the property of the Society is exempt, regardless of its
use, if it is the property of a charitable society. The Rates and Taxes Act s.
4(1) (g), which is made applicable by s. 75 of The Town
Incorporation Act. It is wrong at law to rule that a religious society
cannot claim exemption as a charitable society—The Legislature has provided an
exemption; the meaning of the words used is clear and should be given effect
to. The ordinary sense of the words used leads to no absurdity, inconsistency
with the rest of the instrument, or manifest injustice and does not require
modification by the Judiciary. Re Linton & Sinclair Co.
[Page 79]
Ltd. ; Pemsels' case .
Charitable societies and religious societies do not necessarily belong to the
same genus. The word "religious" may describe a society which is not
a charitable society. Cocks v. Manners In re
Delaney . Obviously in this case where the
Legislature dealt with the property of religious societies and charitable
societies in separate exemptions it considered them to be distinct—As gathered
from the words used, the intention of the Legislature should be construed to be
the subsidization of charitable societies carrying on business. Halifax v.
Sisters of Charity . The ruling of the Court of Appeal can
only be the result of adding a clause to the Statute, "Provided that the
property of a religious society shall not be deemed to be the property of a
charitable society"; this is manifestly in error. Maxwell on the
Interpretation of Statutes, 9 Ed. p. 14-18.
The appellant is a charitable society since its object is the
advancement of education, except in so far as this is tempered with the purpose
of relieving poverty and advancing religion. All of these purposes are
recognized by the law as charitable, according to the standard set by Lord
Macnaghton in Pemsels' case, and since it does its work with
philanthropic principles, not for the purpose of making a profit. Re the
Township of King and the Marylake Industrial School
and Farm Settlement Association . Therefore all the property of the
appellant is exempt from taxation.
J. A. Creaghan K.C. for the respondent. Taxation
is an act of Sovereignty to be performed as far as conscientiously can be with
justice and equity to all and exemptions, no matter how meritorious, are of
grace and must be construed strictly. In Ruthenian Catholic Mission v. Mundare
School District , Iddington J. at p. 625 said: "An
exemption from taxation should never be carried further than what is beyond
doubt the clearly expressed intention of the legislature * * * *"
It is a general rule that while a taxing Act is to be
construed strictly in favour of the taxpayer, a statute under which an
exemption is claimed from a burden imposed
[Page 80]
upon the community at large is also to be narrowly construed
against the claim for exemption. To claim exemption under s. 4(1) (d)
the property must be used exclusively for religious, philanthropic or
educational purposes. Les Commissionaires etc. St. Gabriel v. Les Soeurs de la Congregation de Notre Dame de Montréal ;
Evangelical Lutheran Synod v. Edmonton ; L'Association
Catholique etc. v. Chicoutimi ; C.N.R. v. Capreol
.
Section 4(1) (d) expressly excludes real estate
in respect of which rent is received.
The appellant does not come within the provisions of s. 4(1) (g).
Richards C.J. "There is no question as to the nature and purposes of
the Society in question. It clearly comes within s. 4(1) (d) as a
religious, philanthropic and educational institution rather than under s. 4(1) (g)
as merely a literary or charitable society." (5) Harrison J. "The
society is, as stated by the Mother Superior, a religious organization, that is
to say its purposes are conducive to the advancement of religion." .
In re White ; Re Ward v. Ward .
"As a religious organization the exemption of the
property of this Society is governed by s. 4(1) (d). No doubt all
religious organizations are classified as charitable under the legal definition
of charity, but this class of charitable organization is specifically dealt
with in the exemption clauses of The Rates and Taxes Act, and therefore
this religious organization cannot claim exemption under the general
description of charitable society found in clause 4(1) (g)."
It is submitted these findings are correct. The same property
could not be included in both clauses as the exemptions are different. Hughes
J. in his dissenting judgment was at variance with the rules of construction he
adopted in R. v. Mullin and the cases cited by
him at p. 308. It is submitted the interpretation there given was the proper
one. See also Pemsel's case per Lord Halsbury at 551: "The fact
however, remains, that in various statutes the word charitable is distinguished
by the Legislature from 'public', 'educational', 'religious', and in no
[Page 81]
one instance that I have been able to find, do the
words run 'or other charitable purpose', which one would think would be the
natural mode of the meaning now insisted on." In Adamson v. Melbourne
& Metropolitan Board of Works Anglin C.J. in delivering
judgment gave a restricted interpretation of the words "charitable
institutions."
The judgment of the Chief Justice, Kerwin and Cartwright,
JJ. was delivered by:—
Cartwright J.:—This
is an appeal from a judgment of the Supreme Court of New Brunswick, Appeal
Division, discharging a rule nisi to quash the assessment made by the assessors
of the Town of Sunny Brae against certain property of the appellant.
The appellant was incorporated by special act of the
Province of New Brunswick being c. 94 of the Statutes of 1945.
The preamble to this Act reads as follows:—
WHEREAS the Religious Ladies established at Monoton
and known as Les Dames Religieuses de Notre Dame de Charité du Bon
Pasteur, whose members aim at devoting themselves to the care and reformation
of female penitents and the providing of a home for orphan children, have by
their petition prayed that the institution may be incorporated in order that
they may better accomplish the objects for which it was formed;
Section 1 incorporates three sisters who are named "and
all members of 'Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur'
and other religious forming the Council of the said Community their associates
and successors" under the name of the appellant "with all the general
powers and privileges incident to corporations."
Sections 2 and 3 read as follows:—
2. The Corporation shall have power to conduct, control and
maintain an educational institution for the support, care and reformation of
female penitents and for the care and education of girls generally; an hospital
and dispensary for the sick; an asylum for orphan children and a home for the
aged and infirm and such other persons who may desire to reside in any
establishment of the Corporation according to the rules and by-laws of the
Corporation.
3. The Corporation shall have perpetual succession, a common
seal and may sue and be sued; may purchase, receive or otherwise acquire lands
or buildings in the Province of New Brunswick, may erect on such
[Page 82]
land acquired, as aforesaid, or any of them an educational
institution, an hospital, an asylum, a home and any other necessary buildings
and works and may use, convert, adapt and maintain all or any of such land,
buildings and premises to and for the purposes aforesaid, and incidental
thereto for the maintenance of the said institution, hospital, dispensary,
asylum and home, may carry on the business of a steam and general laundry and
of tailors and makers of dresses and wearing apparels of all kinds, with their
usual and. necessary adjuncts and generally may enjoy real and personal estate
and may mortgage, lease, convey or sell or otherwise dispose of such real and
personal estate for the furtherance of the objects of the Corporation.
There appears to be no dispute as to the relevant facts
which are set out in affidavits made by the Superior of the appellant and the
Town Clerk of the respondent respectively.
The following paragraphs from the affidavit of the Superior
are relevant:—
That the said Les Dames Religieuses de Notre Dame de Charité
du Bon Pasteur is a Society devoted exclusively to the furtherance of the
education of girls generally, and especially to the education and reformation
of female penitents and the furtherance of the education and care of orphan
female children.
That the said Les Dames Religieuses de Notre Dame de Charité
du Bon Pasteur is a religious Society whose members have taken vows of poverty
and receive no wages for their services in teaching and caring for the said
girls, and any revenue of the said Society has not been distributed as profits
or dividends but is retained and expended exclusively for the furtherance of
the purposes of the Society.
That the said object of furthering the general education of
girls is realized by the provision of a general Christian education, to 82
boarding pupils and orphans; and that 35 female penitents are surrounded with
virtuous influence and taught the habits of industry, so that they may become
useful members of society and fitted to earn a living.
That girls are accepted in our institution regardless of
their race, religion, creed or any other consideration.
The following paragraphs from the affidavit of the Town
Clerk are also relevant:—
That Les Dames Religieuses de Notre Dame de Charité du Bon
Pasteur, commonly known as the "Home of the Good Shepherd" is the
owner of a large tract of land situate in the said Town of Sunny Brae, on which
is constructed a large building in which it carries on a school for the
education and reformation of girls, and a home for female orphan children. The
said Home of the Good Shepherd carries on in the said building a very extensive
public laundry and dry-cleaning business serving customers in the said Town of
Sunny Brae, the City of Moncton, N.B., and generally throughout the surrounding
districts. For the purpose of the said laundry and dry-cleaning business it
owns and operates two motor trucks for picking up and delivering clothing and
other articles
[Page 83]
to be laundered and/or dry-cleaned for reward. It is a very
keen competitor with other laundry and dry-cleaning establishments in the area
served.
That in addition to the main building used for general
purposes of the Home, and in part of which the said laundry and dry-cleaning
business is carried on, the Home of the Good Shepherd is the owner of a new two
family brick dwelling occupied by two male employees and for which rent is paid
or included in the salary or wages paid such employees.
The respondent did not assess the lands or the main building
of the appellant, but did assess "the laundry and dry-cleaning
equipment" as personal property at the sum of $40,000, the trucks at
$2,200 and the two-family dwelling house at $8,000, making a total assessment
of $50,200. It is the legality of this assessment which is in issue, and the
decision of the appeal turns upon the proper construction of section 4 of The
Rates and Taxes Act, R.S.N.B. (1927) c. 190, which by section 75 of The
Towns Incorporation Act, R.S.N.B. 1927, c. 179, is made applicable to
assessments for town purposes.
Counsel for the appellant concedes that the relevant
statutory provisions give the respondent authority to make the assessment in
question unless the property assessed is exempt from taxation under the
provisions of clauses (d) and (g) of 4(1) of The
Rates and Taxes Act which read as follows:—
4. (1) The following property shall be exempt from
taxation:—
(d) Every building of a religious organization used
exclusively as a place of worship, or used for the religious, philanthropic or
educational work of such organization, with its site and ground surrounding the
same upon which no other building is erected, but this exemption shall not
include real estate in respect of which rent is received by such organization;
also the personal property and income of such organization, used exclusively
for religious, philanthropic or educational purposes;
(g) The property of any literary or charitable
society or institution.
Counsel for the appellant, while conceding the well settled
rule that clear words are necessary to give immunity from liability to taxation
imposed upon the community at large since every exemption throws an additional
burden on the rest of the community, argues that the appellant is a charitable
society or institution and that under clause (g), quoted above,
all its property is exempt from taxation.
[Page 84]
Counsel for the respondent submits that the fact of the
appellant carrying on the laundry and dry-cleaning business, mentioned above,
prevents it being regarded as a charitable society or institution within the
meaning of clause (g). Alternatively he submits that even if the
appellant would prima facie fall within the wording of clause (g)
it does not do so as it is a religious organization and religious
organizations being specially dealt with in clause (d) must be
deemed to be excluded from clause (g).
Neither counsel suggested that there is any statutory
definition in New Brunswick of the words "charitable society or
institution." In Commissioner's for Special Purposes of Income Tax v.
Pemsel at page 580, Lord Macnaghten says:—
In construing Acts of Parliament, it is a general rule, not
without authority in this House (Stephenson v. Higginson ),
that words must be taken in their legal sense unless a contrary intention
appears.
* * *
That according to the law of England a technical meaning is
attached to the word "charity" and to the word "charitable"
in such expressions as "charitable uses", "charitable
trusts", Or "charitable purposes", cannot, I think, be denied.
Whether the word "charitable" as used in clause (g)
is to be construed in its legal sense or in its natural and ordinary
meaning, it is, I think, beyond question that the appellant is a
"charitable society or institution" unless its operation of the
laundry and dry-cleaning plant has the effect of excluding it from such class.
A sufficient definition of a charitable institution is to be
found in the judgment of Maclean J. in Peter Birtwistle Trust v. Minister
of National Revenue .
A charitable institution is, I think, an organization
created for the promotion of some public object of a charitable nature, and
functioning as such.
This judgment was reversed, Kerwin J. dissenting, in [1939]
S.C.R. 125, and restored sub nom Minister of National Revenue v. Trusts
and Guarantee Co. , but there is nothing said in any of the
judgments to throw doubt on the accuracy of the definition quoted. A helpful
discussion of what is a charitable institution is to be found in In re
[Page 85]
Douglas. Obert v. Barrow where
Kay J. at first instance (at page 479) and Lindley L.J. in the Court of Appeal
(at page 487) held that the Home for Lost Dogs was a charitable
institution and neither Cotton L.J. nor Bowen L.J., the other members of the
Court of Appeal, said anything to suggest the contrary.
I have reached the conclusion that notwithstanding the
operation of the laundry and dry-cleaning business the appellant remains a
charitable institution within clause (g). The Act of
Incorporation and the material filed make it clear that the primary purposes
and objects of the appellant are purely charitable. It will be observed that in
s. 3 of such Act, after the enumeration of certain purposes, all charitable, it
is provided that "incidental thereto for the maintenance of the said
institution, hospital, dispensary, asylum and home" the appellant may
carry on the business of a laundry. In the contemplation of the legislature as
expressed in the Statute and in fact as shewn by the material filed, the
operation of the laundry business, large though it be, is merely incidental to
the charitable purposes of the appellant and for the maintenance thereof. This
is not the case of an institution carrying on a commercial business and incidentally
performing sundry charitable works or paying over its profits to be used by
others for charitable purposes but rather that of a society or institution of
which all the primary purposes are purely charitable which is actively engaged
in carrying on charitable works and which as an incidental means of providing
some of the money which is required for the prosecution of such charitable
works carries on a business under statutory powers.
For the above reasons, I am of opinion that the appellant is
a charitable society or institution within the meaning of those words as used
in clause (g) and it follows that all its property is exempt from
taxation for under this clause it is the character of the owner of property
rather than the use to which such property is put that determines whether it is
liable to assessment.
I have not over-looked the second argument of counsel for
the respondent, that the appellant, being a religious organization, must find
any exemption to which it is
[Page 86]
entitled in clause (d) and must be held to be
excluded from the operation of clause (g). There is no doubt that
the appellant is a religious organization but the construction contended for by
counsel for the respondent would bring about the result that all the property
of a society or institution whose objects were solely charitable would be
exempt from taxation if such society were purely secular, or indeed if it were
avowedly atheistic, but that a society with identical objects composed of
members of a religious order would have only a limited exemption. It seems to
me that clear and unambiguous words would be required to achieve such a result.
I can find nothing in the wording of the Statute and I know
of no rule of construction which requires us to hold that the thirteen clauses
contained in section 4(1) of The Rates and Taxes Act are necessarily
mutually exclusive. There is no incompatibility between religion and charity
but, in law, a society may be religious without being charitable, see for
example Cocks v. Manners , or charitable without
being religious, for example the Home for Lost Dogs referred to in In
re Douglas. Obert v. Barrow (supra). If, as must often
happen, a society is both a religious organization and a charitable institution
I see no reason why it should not be entitled to the exemption afforded by
clause (g) to a charitable institution. I find nothing in the
record to indicate that any of the objects or purposes of the appellant society
are religious without being charitable.
For the above reasons, I am of opinion that the appeal
should be allowed, the rule nisi made absolute and the assessment
quashed. The appellant is entitled to its costs in this court and in the Appeal
Division of the Supreme Court of New Brunswick.
The judgment of Rand and Locke, JJ. was delivered by:
Rand J.:—The
society or institution appealing to this Court is a body corporate by the name
"Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur." The
incorporation was by special act of the legislature of New Brunswick in 1945. The
objects are, to conduct, control and maintain an educational institution for
support,
[Page 87]
care, and reformation of female penitents and for the care
and education of girls generally; a hospital and dispensary for the sick; an
asylum for orphan children and a home for the aged and infirm and such other
persons as may desire to reside in an establishment of the society; and as
incidental to these purposes and for the maintenance of the institution, power
was given to carry on the businesses of a steam and general laundry and of
tailors and makers of dresses and wearing apparel of all kinds, with their
usual adjuncts.
The corporation has its seat near the city of Monoton
and as part of its activities it conducts a general laundry business.
Those engaged in the laundry include inmates as well as outside employees, and
the business is in public competition with other laundries. Under The Rates
and Taxes Act of the Province, it has been assessed on the building with
its land occupied by two drivers of laundry trucks and the personal property,
largely machinery, including the trucks, used in the business, in the sum of
$52,200.
Exemption from taxation is claimed under paragraphs (d)
and (g) of section 4 of the statute which are as follows:
(d) Every building of a religious organization used
exclusively as a place of worship, or used for the religious, philanthropic or
educational work of such organization, with its site and ground surrounding the
same upon which no other building is erected, but this exemption shall not
include real estate in respect of which rent is received by such organization;
also the personal property and income of such organization, used exclusively
for religious, philanthropic or educational purposes;"
(g) The property of any literary or charitable
society or institution;
In the petition for certiorari and in the affidavit of
Antoinette des Coteaux, the Superior, the organization is described as a
religious society whose members have taken vows of poverty and receive no wages
for their services in teaching and caring for the girls, and it is stated that
the income is expended exclusively for the furtherance of the purposes of the
society. About 60 per cent of those attending the general education classes pay
a tuition fee of $20 a month, but the fee is said not to be a condition of
admission to or continuance in the institution. Of the female penitents in what
is known as the "School of Protection"
[Page 88]
only four pay the fee and eighteen are accommodated free,
except for whatever revenue may be derived from their labour.
The question in controversy involves the characterization
given to the corporation and its activities. A charity or charitable society
is, I should say, one whose purposes are those described in the preamble to the
statute 43 Eliz. c. 4 or purposes analogous to them. They can be classified
generally, as for the advancement of religion, for the relief of poverty, for
the promotion of education, and for other purposes bearing a public interest:
and the attributes attaching to all are their voluntariness and, directly or
indirectly, their reflex on public welfare.
A religious society may or may not be charitable. In In
re White , it was held that a bequest "to a
religious society", without more, meant, prima facie, for religious
purposes and so charitable. In Cocks v. Manners , a
religious institution consisting of a voluntary association of women whose
purpose was "the working out of their own salvation by religious exercises
and self-denial" was held not to be charitable. In Townsend v. Cams
,
in which a legacy was left on trust for the benefit of societies, subscriptions
or purposes "having regard to the glory of God, in the spiritual welfare
of his creatures", for which a scheme had to be devised, was construed by Wigram
V-C. to be a gift for religious purposes and to be restricted to such purposes.
In the course of dealing with the argument that ways of expending the property
might be suggested which might be conducive to spiritual welfare, but which
separately taken would not in themselves be charitable, he observed:—
It appears to me sufficient to say that if, as I think the
case is, the end proposed by the testatrix is charitable, no expenditure can be
lawful which is not directly conducive to that end; and the end itself cannot
lose its charitable character only because parts of the machinery admissible
for its accomplishment are not in themselves abstractedly considered
charitable. Writing, for example, is not grammar; but if grammar cannot be so
well learned without first learning to write, that may be taught in a pure
grammar school, as a step to the learning which is its proper object.
[Page 89]
Lindley L.J. in In re White, supra, paraphrases this
language thus:—
Having come to the conclusion that the object of the
testator was charitable because it was religious, he says that no mode of
carrying out his intention could be proper if that mode was not itself
charitable.
This artificial signification, unless the context modifies
it; is to be attributed to either "charitable" or "charity"
when it appears in a statute: Commissioners v. Pemsel ;
and the former as used in paragraph (g) is to be so interpreted.
As long ago as 1675, in the case of Webb v. Batchelet
,
specifically holding them chargeable to repairs of highways, the Court declared
parsons chargeable with all public duties; and that this is the settled view
appears from Phillimore's Ecclesiastical Law, 2nd Ed., Vol. I, p. 477. Taxes,
then, are the rule against all, and he who claims an exemption must show that
he comes within the language delineating it. It must be shown, as Duff J.,
later Chief Justice, said, speaking for the Judicial Committee in Montreal v.
College of Sainte Marie , "that the privilege invoked has
unquestionably been created."
General tax legislation in New Brunswick began at the
inception of the province. C. 42 of the consolidated statutes of 1836,
providing for county rates, was enacted in 1786 and directs the assessors to
"apportion the quota of the said sum or sums of money so to be levied upon
the respective towns or parishes, to be paid by the several and respective
inhabitants of the said towns or parishes as they in their discretion shall
think just and reasonable." In 1875, in a re-cast of the Rates Act of
1853, exemptions pertinent to the question before us first appeared and they
were in the form of paragraph (g). Previous to this, legislation
applying to Saint John and Fredericton had provided for Church and other
privileges but they were not uniform. Clause (d), on the other
hand, was first enacted in 1924.
Mr. Carvell argues that the use of the property is within
clause (d) by reason of the fact that the entire net income from
the business is to be applied to purposes mentioned
[Page 90]
in the paragraph. But the uses contemplated are immediate
and actual "religious, philanthropic or educational" activities, not
those of ordinary business, whatever the ultimate destination of its revenues.
Lands yielding rents have long been used as a form of charitable endowment, but
they are excluded from the exemption, which implies, a fortiori, that
business use is excluded.
Although the benefit to the truck drivers in the occupation
of the two houses has not been reduced to a specific sum, it represents a
business remuneration: and whether looked upon in the aspect of rent or the
nature of the use, it is excluded from the paragraph.
The language of use for the personal property is at least as
restrictive as that for the lands; if the word "exclusively" in the
first clause is not to be carried forward to the use of all buildings and
lands, it is more so ; and the use of personal property for business purposes
would likewise be excluded. The separate treatment of personal property and
income from that of lands results from the fact that several features of the
former had to be specially dealt with, and to have combined the language
dealing with both of them would have produced an involved and cumbersome
locution.
He then appeals to paragraph (g). The word
"charitable" here connotes solely purposes, works and modes of action
of the character described: a society that could, for instance, for all of its
objects, receive charitable bequests with their peculiar privileges such as
perpetual endowment. The illustration by Wigram V-C. quoted indicates that the
carrying on of a business as part of a society's functions would rule it out of
that category. Charity is essentially voluntary good works and voluntary
donations the accepted means of obtaining the material resources necessary to
them, both of which are incompatible with the means here.
If paragraph (g) is to be taken to
include all societies and institutions having charity as the ultimate
destination of their funds by whatever means raised, then clearly a religious
society with solely charitable objects and powers would lie within it. At the
same time it would be embraced within paragraph (d) since
"religious, philanthropic and educational" works include all matters
of charity and, as
[Page 91]
well, some matters of benevolence beyond them. For such an
organization, then, what could have been the purpose of introducing paragraph (d)?
I should find it difficult to imagine any reasonable or practical purpose
except to codify and clarify the position of religious societies, and to
enlarge the scope of the exempting uses of their property. But whether to
enlarge or restrain, the entire class is clearly intended to be withdrawn from (g).
If this is not so, a religious society with mixed charitable
and business objects, or a non-religious organization, both having ultimate
charitable purposes, would remain exempt as to all its property under (g),
which would mean virtually that the further a society was from a true
charity, the broader its exemption. Such an anomaly could not be attributed to
the intention of the legislature. What (g) envisages are
charitable and literary societies and institutions strictly so-called, with
neither objects nor powers nor works outside of those descriptions. That the
Companies Act should provide as it does in s. 17(2) (ƒ) that
The Company shall not carry on any business or trade for the
profit of its members,
the last six words of which were added in 1944, adds
nothing to the argument: whatever its effect may be, it is irrelevant to the
meaning of the clause I am considering.
A similar exemption of "the property of a literary or
scientific institution", in the Income Tax Act of 1842, language which
seems to be the prototype of that of clause (g) here, was dealt
with in Manchester v. McAdam , by the Court of Appeal
and, on appeal, by the House of Lords . The city of Manchester
had set aside certain buildings for a public library administered by a special
Board; its purposes were unquestionably literary, and exemption was claimed for
it as a "literary institution". The only doubt arose from the fact
that it was maintained by rates. The Court of Appeal, Lindley and Rigby L.JJ.,
with Brett L.J. dissenting, held that it was not within the exemption because
of its support by taxes, that what the statute designed was to encourage gifts
of land to such institutions, supported in their activities likewise by other
gifts or subscriptions, all for the ultimate benefit to the public. The House
of Lords took another view; but Lord
[Page 92]
Halsbury L.C., dissenting, speaks of the rate "distinguishing
it from the voluntary character of a literary and scientific institution such
as existed in 1842". In the opinion of the majority, an institution was to
be conceived as an objective establishment for the purpose designated, which
the library was, and its support by taxes was not a disqualifying factor. But
the fact of such a difference of opinion hinging on such an element satisfies
me that had the corporation, for instance, carried on a general printing
business as auxiliary to its library administration, though with the net
revenue devoted exclusively to the purposes of the library, its exemption could
not have been seriously argued. The same principle was applied in In re
Badger, in which an incorporated body
under the Literary and Scientific Institution Act, was held incapable of
borrowing money for the purposes of a recreation adjunct.
What is here, then, is not a "charitable society or
institution"; it is a society of mixed objects and works or activities,
some of which are charitable and some not; and it is not such a society as the
legislature had in mind when, in 1875, it first decided to provide so
comprehensive an exemption as that of all the property of such owners.
We have today many huge foundations yielding revenues
applied solely to charitable purposes; they may consist, as in one case, of a
newspaper business ; even if these foundations themselves carried on their
charitable ministrations, to characterize them as charitable institutions
merely because of the ultimate destination of the net revenues, would be to
distort the meaning of familiar language; and to make that ultimate application
the sole test of their charitable quality would introduce into the law
conceptions that might have disruptive implications upon basic principles not
only of taxation but of economic and constitutional relations generally. If
that is to be done, it must be by the legislature. Concessions to taxation of
income or property, as in the Income Tax Act of Great Britain, may expressly
provide for meeting the modern development of mixed charitable and business
objects as we have them here: but that was remote from what the legislature had
in mind in 1875.
[Page 93]
As the works and activities of the society, then, are not
solely of a charitable nature, it is not within paragraph (g); but
whether there originally or not, as a religious society, it must find exemption
for its property in paragraph (d) which, for the reasons given,
it cannot do. The appeal must, therefore, be dismissed with costs.
Kellock J.:—The
error which the appellant alleges to exist in the decision of the Appellate
Division is thus set out in its factum:
(a) The finding that rent is received for the brick
dwelling house.
(b) The finding that the laundry and drycleaning
equipment, and property used in conjunction therewith, is not used exclusively
for the religious, philanthropic or educational work of the Society and is
therefore not exempt from taxation.
(c) The ruling that exemption from taxation cannot be
claimed in respect of the property of Les Dames Religieuses de Notre Dame de
Charité du Bon Pasteur under section 4(1) (g) of the Rates and
Taxes Act, and that the said property is not exempt from taxation thereunder.
I do not find it necessary to deal with the first
contention.
The appellant's second contention, based on the provisions
of s. 4 (1) (d) of the relevant statute, is that it is authorized
by its incorporating statute to carry on the laundry and dry-cleaning business
as "incidental" to its philanthropic and educational purposes, and
therefore, as any profits received by the appellant from the carrying on of the
business are devoted to its charitable purposes, the property used in carrying
on such business is as much used for its philanthropic and educational purposes
as its other property.
The appellant further contends that even if it fails in its
second contention on the basis of use, it may have resort for exemption to the
provisions of para. (g) as a "charitable society or
institution," in which case mere ownership is sufficient.
The relevant portions of the statute are as follows:
4. (1) The following property shall be exempt from taxation:
(d) Every building of a
religious organization used exclusively as a place of worship, or used for the
religious, philanthropic or educational work of such organization, with its
site and ground surrounding the same upon which no other building is erected,
but this exemption shall not include real estate in respect of
[Page 94]
which rent is received by such organization; also the personal
property and income of such organization, used exclusively for religious,
philanthropic or educational purposes;
(g) The property of any literary or charitable
society or institution.
With the contention that the use of the property real and
personal here in question is brought within the terms of para. (d), I
find it impossible to agree. That the business is being carried on as
"incidental" to the charitable work of the appellant does not alter
the fact that the use of the property is for business purposes, and it is
immaterial that the appellant, after receipt of the profits from the business,
devotes such profits to the support of its actual charitable work.
Coman v. Governors of
the Rotunda Hospital , is in point. The hospital,
unquestionably a charity in the strict sense, had certain rooms not used by it
for hospital purposes but let out by it for hire for entertainments, concerts
and cinema shows. By 5 and 6 Vict. c. 35, s. 60, duties under Schedule
"A" of the statute were assessable upon the annual value of premises,
but by s. 61 an exception from such duties was provided in the case of
"any hospital * * * in respect of the public buildings, offices and
premises belonging to such hospital" and upon "the rents and profits
of lands, tenements, hereditaments and heritages belonging to such hospital * *
* so far as the same are applied to charitable purposes." This statute was
extended to Ireland by 16 and 17 Vict. c. 34, s. 3.
By the Valuation (Ireland) Act, 1852, s. 2, the valuing
authority was directed "to distinguish all hereditaments and tenements, or
portions of the same * * * used for charitable purposes * * * and all such
hereditaments or tenements, or portions of the same, so distinguished, shall,
so long as they continue to be * * * used for the purposes aforesaid, be deemed
exempt from all assessment." Until 1915 the rooms in question had been
scheduled as exempt in the Valuation List, and accordingly were not assessed
for rating or Schedule "A" purposes. The Crown now sought to tax the
profits arising from the hiring out of the rooms under Schedule "D",
as being profits from a trade.
On behalf of the hospital it was contended that all profits
derived from the lettings of the rooms were applied to the general support of
the hospital and that the moneys
[Page 95]
so received were rents and profits of tenements belonging to
a hospital within s. 61, and that these moneys, so far as they were applied to
charitable purposes, were exempt. They contended that they were a single
statutory corporation constituting an indivisible charitable trust, and that
they were not carrying on a trade or anything in the nature of a trade.
It is clear that, apart from the question as to carrying on
a trade, the use of the premises by the respondents for purely hospital
purposes would have entitled them to exemption from tax in respect of the
annual value of the premises, but it was held that they were carrying on a
trade and in so doing went beyond the bounds of the exemption to which they
were entitled under Schedule "A". In the course of his judgment, the
Earl of Birkenhead L.C. said at p. 14:
When the facts set out in the case stated and the documents
annexed to it are considered as a whole, it becomes plain that the respondents,
with the laudable object of raising an income for the support of their
charitable activities, have engaged in what can only be described as a business
or a concern in the nature of a business, and thereby have earned annual
profits which are outside the scope of Schedule A.
In that case and in later cases in the House of Lords, the
decision of the Court of Session in Religious Tract and Book Society v. Forbes
,
was approved.
In the last mentioned case, the object of the plaintiff
society, according to its constitution, was "by the circulation of
religious tracts and books to diffuse a pure and religious literature among all
classes of the community." The constitution went on to provide that
"this object shall be carried out by the establishment of central and
branch depositories and of auxiliary societies and by means of colportage
and other agencies." The society operated two
"depositories" or book stores, one at Edinburgh and the other at
Belfast, and in addition, carried on the colportage agencies.
The sales of all three were of the same goods at the same prices, there being
only one stock out of which all its salesmen were supplied. The profits made by
the stores were applied to the carrying on of the colportage, a
purely charitable activity, which could not be carried on by itself at a profit
but required the further aid of
[Page 96]
public subscriptions. The Lord President, later Lord Rubersten, at p. 418 put the matter thus:
* * * it may be conceded to the Appellants that the object
of their Society is not that of making profit, but the diffusion of religious
literature among all classes of the community. But incidental to that large and
beneficial purpose they engage in trade * * * It appears that the colportage
agency could not be carried on at a profit as a commercial undertaking,, and is
persevered in merely because the Society find that by appealing to the
religious public they are able to obtain subscriptions which enable them to
fill up the deficit. When we turn to the methods of the colportage,
it appears that they are not commercial methods, that, is to say, that
the business carried on is not purely that of pushing the sale of their goods,
but that on the contrary the duty of the salesman is to dwell over the purchase
and make it the occasion of administering religious advice and counsel. Now,
under these conditions it seems to me impossible to hold that this is a
business, trade, or adventure, which is unfortunately resulting in loss. It is
really a charitable mission in which the sale of the Scriptures is made the
occasion for doing something more than merely effect the sale of books. And
accordingly, while I completely assent to the view that the establishment and
conduct of the shops and the establishment and conduct of the colportage
all rest upon the same ultimate motive, yet at the same time the two
operations seem to be essentially distinguished. The shops are simply
book-seller's shops—the other is a combination of the sale of books with a
missionary enterprise * * *
At p. 419 Lord Adam said:
Now, I agree with your Lordship that if a party takes to
selling books it does not matter to the Crown what his object is in doing so,
whether it is to put profit into his own pocket, or, having made profit, to
expend that in charity or donation.
In my opinion, it is too clear for argument that the
"use" referred to in para. (d) of the statute in the case at bar, is
the actual use to which the property is put, and not the object to which the
profits from the business which may be carried on, on the property, after their
receipt by the proprietor of the business, may be devoted. Accordingly, I think
the judgment below is right in holding that the appellant in respect of the
real and personal property here in question does not come within the exempting
provisions of para. (d).
The further contention of the appellant that, although as a
"religious organization" it is not entitled to exemption under para. (d),
it may nonetheless claim exemption as a "charitable society or
institution" under para. (g), requires examination. If
sound, it would involve anomalous consequences.
[Page 97]
For example, a religious organization, which is a charity in
the strict sense, owning productive real property which it does not use but
lets to tenants, while denied exemption therefor by the express terms of para. (d),
would nevertheless, on the basis of this argument, be entitled to exemption
in respect of the very same property under para. (g). Again, real
or personal property, lying idle and not used, would be taxable on the basis of
para. (d) but exempt under para. (g).
All religious organizations are not, of course, charitable
organizations; vide Cocks v. Manners . The
property of such organizations, therefore, to be entitled to exemption, would
have to be brought within clause (d). I have no doubt that the great
bulk of the religious organizations in the Province of New Brunswick at the
time of the enactment for the first time of para. (d) in 1924,
were charitable institutions within the strict sense of those words. It would
seem to be a rather remarkable intention to be attributed to the legislature in
the enactment of clause (d) that the great majority of religious
organizations should be entitled to claim exemption for their real and personal
property under the provisions of the new legislation if the use of such
property brought it therein, and at the same time that their previously
existing exemption to which they were already entitled on the mere basis of
ownership should also be preserved to them. In my opinion, the construction of
a statute which produces such anomalies is contrary to well
settled canons of construction.
A statute is to be construed, if at all possible, "so
that there may be no repugnancy or inconsistency between its portions or
members;" City of Victoria v. Bishop of Vancouver Island ,
per Lord Atkinson, at p. 388. The principle applicable is, in my opinion, that
stated at p. 176 of the 9th Edition of Maxwell, as follows:
Where a general intention is expressed, and also a
particular intention which is incompatible with the general one, the particular
intention is considered an exception to the general one.
[Page 98]
Among the authorities referred to in the judgment of Sir
George Jessel M.R. in Taylor v. Oldham . At p.
410 the learned Master of the Rolls said:
* * * but I think in all these Acts of Parliament, the first
thing you have to consider is, that where you have general provisions, whether
contained in the same Act or in another Act of Parliament, and where you have
special provisions as to a particular property in the ownership of one
individual, you must read the special provisions as excepted out of the
general.
The statute there under consideration was a private statute,
but there is no difference in the application of the principle in the case of a
public Act. Clause (g) of the section here in question is a
general provision including all charitable institutions, and, in order to make
the statute consistent with itself, clause (d) is to be regarded
as an exception out of (g). The fact that (d) includes
religious organizations not charitable, does not affect the principle to be
applied.
In C.N.R. v. Capreol , the
statute under construction was the Ontario Assessment Act, R.S.O. 1914, c. 195,
by s. 5 of which all real property in Ontario was made liable to taxation
"subject to the following exemptions:
2. Every place of worship and land used in connection
therewith and every churchyard, cemetery or burying ground.
3. The buildings and grounds of and attached to or otherwise
bona fide used in connection with and for the purposes of a university, high
school, public or separate school, whether vested in a trustee or otherwise, so
long as such buildings and grounds are actually used and occupied by such
institution, but not if otherwise occupied,
4. The buildings and grounds of, and attached to, or
otherwise bona fide used in connection with and for the purposes of a seminary
of learning maintained for philanthropic, religious, or educational purposes,
the whole profits from which are devoted or applied to such purposes only, but
such grounds and buildings shall be exempt only while actually used and
occupied by such seminary.
5. Every city or town hall, and every court house, gaol,
lock-up and public hospital receiving aid under The Hospitals and Charitable
Institutions Act, with the land attached thereto but not land of a public
hospital when occupied by any person as tenant or lessee.
9. Every industrial farm, house of industry, house of
refuge, orphan asylum, and every boys' or girls' or infants' home or other
charitable institution conducted on philanthropic principles and not for the
purpose of profit or gain, and every house belonging to a company for the
reformation of offenders, and the land belonging to or connected with the same;
but not when occupied by a tenant or lessee.
[Page 99]
10. The property of any children's aid society incorporated
under the Children's Protection Act of Ontario, whether held in the name of the
society or in the name of a trustee or otherwise, if used exclusively for the
purposes of and in connection with the society.
12. The property of every public library and other public
institution, literary or scientific, and of every agricultural or horticultural
society or association, to the extent of the actual occupation of such property
for the purposes of the institution or society.
13. The land of every company formed for the erection of
exhibition buildings to the extent to which the council of the municipality in
which such land is situate consents that it shall be exempt.
The question for decision was as to whether or not certain
land owned by the railway and a building thereon containing numerous bedrooms,
a reading room and other rooms and facilities for lodgings, entertainment and
recreation, all operated by the Young Men's Christian Association under the
terms of an agreement with the railway calling for payment of a nominal rent to
the latter, was exempt under sub-s. 9 above. This was decided adversely to the
appellant. In the course of delivering the judgment of the court, Anglin C.J.C.
said at p. 502:
The claim of the appellant was that the Railway Y.M.C.A. at
Capreol is
"a charitable institution conducted on philanthropic
principles and not for the purpose of profit or gain,"
and that it is, therefore, entitled to the exemption claimed
But it seems obvious that every charitable institution so
conducted does not fall within s.s. 9 of s. 5. Special exemptions of
undertakings of a charitable nature conducted on philanthropic principles and
not for the purposes of profit and gain are to be found in s.s. 2, 3, 4, 5, 10,
12 and 13. It seems reasonably certain, therefore, that the words
"charitable institutions conducted on philanthropic
principles and not for the purpose of profit or gain,"
are not used in ss. 9 in their most comprehensive sense.
The learned Chief Justice went on to hold that the sense in
which the words, "charitable institutions conducted on philanthropic
principles and not for the purpose of profit or gain," were used in clause
9, was ejusdem generis with the other institutions mentioned in that
clause, but it was "obvious" to the court that the general category
of charitable institution mentioned in clause 9 did not include the particular
charitable institutions described in the other sub-sections. The particular was
to be considered as excepted out of the general provision.
[Page 100]
There is an additional reason, however, why, in my opinion,
the appellant, as a religious organization, must find its exemption, if any, in
the terms of para. (d) exclusively.
As already pointed out, the word "charitable," as
used in para. (g), is not used in its popular but in its
technical sense; Chesterman v. Federal Commissioner of Taxation ,
128; Adamson v. Melbourne . A religious society may
or may not be a charitable society in this sense, and upon any question
arising, the court will inquire into the purposes of the society.
In Morice V. Bishop of Durham , Sir
William Grant M.R. formulated the test as follows at p. 406:
The question is, not, whether he (the testator) may not
apply it upon purposes strictly charitable, but whether he is bound so to apply
it? I am not aware of any case, in which the bequest has been held charitable,
where the testator has not either used that word, to denote his general
purpose, or specified some particular purpose, which this Court had determined
to be charitable in its nature.
In the case at bar, the objects of the appellant are to
conduct an educational institution for the support, care and reformation of
female penitents, and for the care and education of girls generally; an
hospital and dispensary for the sick; an asylum for orphan children, and a home
for the aged and infirm and such other persons who may desire to reside in an
establishment of the corporation according to its rules and by-laws; and
"incidental" thereto, but nonetheless for the "maintenance of
the said institution" it is given the power to carry on "the
business of a steam and general laundry, and of tailors and makers of dresses
and wearing apparels of all kinds with their usual and necessary adjuncts."
According to the affidavit of the Town Clerk and Treasurer of the relator, the
appellant does carry on in the building here in question
a very extensive public laundry and drycleaning business
serving customers in the said Town of Sunny Brae, the City of Moncton, New
Brunswick, and generally throughout the surrounding districts. For the purpose
of the said laundry and drycleaning business it owns and operates two motor
trucks for picking up and delivering clothing and other articles to be laundered
and/or drycleaned for reward. It is a very keen competitor with other laundry
and drycleaning establishments in the area served.
[Page 101]
In Brighton College v. Marriott ,
Lord Blanesburgh said at p. 204:
Whether in any particular case activities which may properly
be described as charitable have become trading or commercial must always be a
question of fact—one important consideration being whether these activities are
being conducted with commercial considerations in view and on commercial
principles: see Religious Tract and Book Society of Scotland v. Forbes
.
There can be no doubt of the commercial nature of the
appellant's laundry and drycleaning business, and a trust for the benefit of
the appellant could not meet the test laid down by Sir William Grant.
In Dunne v. Byrne , in
which a residuary bequest "to the Roman Catholic Archbishop of Brisbane
and his successors to be used and expended wholly or in part as such Archbishop
may judge most conducive to the good of religion in this diocese," was
held not to be a good charitable bequest but void, Lord Macnaghten, in
delivering the judgment of the Privy Council, pointed out at p. 410 that it
could hardly be disputed that a thing may be "conducive" and in
particular circumstances "most conducive" to the good of religion in
a particular diocese or in a particular district without being charitable in
the sense which the court attaches to the word, and indeed without being in
itself in any sense religious. He went on to say:
In the present case the learned Chief Justice suggests by
way of example several modes in which the fund now in question might be
employed so as to be conducive to the good of religion though the mode of
application in itself might have nothing of a religious character about it.
What is thus referred to by Lord Macnaghten is to be found
in the judgment of Griffith C.J. in 11 Commonwealth Law Reports, 637 at 645, as
follows:
Again, it seems to me that purposes may
reasonably be called conducive to the good of religion although they have no
such direct tendency. For instance, it might well be said that * * * the
establishment of a newspaper conducted on religious or high moral
principles * * * would be purposes conducive to the good of religion. Certainly
the Archbishop might reasonably think so. I do not at present see my way to
deny such a proposition. But I do not think that either purpose would be a
charitable purpose.
[Page 102]
In the case of the appellant, therefore, the carrying on of
the laundry business is not a charitable purpose, and the appellant, regarded
as an entirety, could not constitute the object of a valid charitable trust,
and cannot, therefore, be said to be a charitable corporation.
Even a church, regarded as an entirety, inclusive of all its
purposes, parochial as well as ecclesiastical, cannot constitute the object of
a valid charitable trust; Farley v. Westminster Bank ; In
re Jackson . Where the testator does not indicate
any larger purpose, a trust for the benefit of a church will be saved from
invalidity by the presumption of law that the benefit is intended for
ecclesiastical purposes only; In re White .
To apply the same presumption in the case of a trust for the
benefit of a corporation such as the appellant would save a trust for its
benefit from invalidity, but the presumption has no place under the taxing
statute here in question, under which the appellant is to be taken as an
entirety, and when so regarded, is not a charitable corporation.
The decision of Vice-Chancellor Wood in Lechmere v. Curtler
,
casts an interesting side-light upon the matter, which leads to the same
result. In that case the testator had bequeathed a sum of money to the
treasurer, for the time being, of an asylum thereafter to be instituted
"for the humane and charitable purposes of that institution." An
asylum was afterwards built under the compulsory provisions of an Act of
Parliament. It was supported by compulsory rates, and was used entirely for the
maintenance of pauper lunatics. At p. 648 the learned Vice-Chancellor said:
Nobody questions that the maintenance of lunatics is humane
and charitable, and a bequest of this nature might be useful in inducing the
Justices to build an asylum. No doubt the legislature had humane and charitable
purposes in view, but the building of this asylum was simply compulsory on the
Justices. If I gave this £1,000 to this asylum, I should be merely relieving
the rates to that extent, and I cannot say that this would be a humane and
charitable application of the legacy within the meaning of the testator's will.
[Page 103]
In the case at bar, a trust for the benefit of the appellant
corporation simpliciter, which it would be free to use, say, for the
expansion of the laundry with the object of increasing profits, or to replace
worn-out equipment, or to tide it over unprofitable periods, could not be said
to be, in any sense, a charitable application of the proceeds of the trust.
Accordingly, the appellant cannot be regarded as a "charitable society or
institution" within the purview of the statute here in question.
I would dismiss the appeal with costs.
Estey, J.:—That
the appellant, incorporated by an act of the Legislature of New Brunswick in
1945 (S. of N.B. 1945, c. 94), is a religious organization and, therefore,
entitled to the exemptions from taxation within the meaning of s. 4(1) (d)
of The Rates and Taxes Act (R.S.N.B. 1927, c. 190), is not disputed. The
appellant, however, contests the imposition by the respondent of taxes upon the
brick duplex dwelling, occupied by two of its laundry employees, and its
personal property consisting of the laundry equipment and two trucks, by virtue
of the exceptions contained in this subpara. (d). s. 4(1) (d)
reads as follows:
4. (1) The following property shall be exempt from taxation:
(d) Every building of a religious organization used
exclusively as a place of worship, or used for the religious, philanthropic or
educational work of such organization, with its site and ground surrounding the
same upon which no other building is erected, but this exemption shall not
include real estate in respect of which rent is received by such organization;
also the personal property and income of such organization, used exclusively
for religious, philanthropic or educational purposes;
The Appeal Division of the Supreme Court of New Brunswick,
Mr. Justice Hughes dissenting, held that the respondent was right in taxing the
brick duplex dwelling, as well as the personal property in the laundry and the
two trucks.
The record discloses no controversy as to the facts. It sets
out that the appellant
is the owner of a large tract of land situate in the said
Town of Sunny Brae, on which is constructed a large building in which it
carries on a school for the education and reformation of girls, and a home for
female orphan children. The said Home of the Good Shepherd carries on in the
said building a very extensive public laundry and drycleaning business serving
customers in the said Town of Sunny Brae, the City of Moncton,
[Page 104]
N.B., and generally throughout the surrounding districts.
For the purpose of the said laundry and drycleaning business it owns and
operates two motor trucks for picking up and delivering clothing and other
articles to be laundered and/or drycleaned for reward. It is a very keen
competitor with other laundry and drycleaning establishments in the area
served.
3. That in addition to the main building used for general
purposes of the Home, and in part of which the said laundry and drycleaning
business is carried on, the Home of the Good Shepherd is the owner of a new two
family brick dwelling occupied by two male employees and for which rent is paid
or included in the salary or wages paid such employees.
No further particulars are given as to the wages of the two
employees, but the hearing of this appeal proceeded upon the basis that they
were hired and their wages paid partly in cash and partly in the permission of
each to occupy exclusively one half of the brick duplex. In these
circumstances, that the appellant was paid or received remuneration in the form
of services for this brick duplex must be conceded. The essential question is
whether this remuneration is included in the word "rent" as used in
the exception in s. 4(1) (d). The word is not defined in The
Rates and Taxes Act. In Halsbury's Laws of England it is stated:
Rent—that is, rent-service—is the recompense paid by the
lessee to the lessor for the exclusive possession of corporeal hereditaments.
It need not consist of the payment of money. It may consist in the render of
chattels, or the performance of services. 20 Hals., 2nd Ed., p. 158, para. 170.
See Woodfall's Law of Landlord & Tenant, 24th Ed.,
303; Williams on Canadian Landlord & Tenant, 2nd Ed., 159.
The word "rent" is itself a word of very wide
import, not always correctly employed in ordinary current user, particularly in
taxing provisions. Lord Wright in Earl Fitzwilliam's Collieries Company v.
Phillips, [1943] A.C. 570 at 581.
In Vyvyan v. Arthur , Thomas
Vyvyan, as owner in fee, leased certain premises requiring the payment of
certain money "and also doing suit to the mill of the said Thomas, his
heirs and assigns, called Tregamere mill, by grinding all such corn there as
should grow in or upon the close thereby demised during the term." It was
held that the covenant requiring the grinding of the corn was "in the
nature of a rent," Bayley J. stating at p. 414:
The lease contains a reddendum, and whatever services or
suits are thereby reserved partake of the character of rent.
[Page 105]
The language adopted by the Legislature in subpara. (d)
"this exemption shall not include real estate in respect of which rent
is received by such organization" does not suggest that it was legislating
with reference to rent in the strict sense. It is not the reservation of rent
or any right to distrain therefor, which latter Lord Halsbury describes as
"the mark of rent" (20 Hals., 2nd Ed., p. 158, para. 170), or,
indeed, any of the attributes connected with the word when used in the strict
sense. On the contrary, it rather appears that the Legislature adopted the word
in the broader sense, as defined in Woodfall's Law of Landlord and Tenant, 24th
Ed., p. 303: "Rent is a retribution or compensation for the lands
demised." It is not, however, necessary to determine the exact meaning,
more than to indicate that the language ought not to be construed in the
restricted sense but that it is sufficiently comprehensive to include that
which was received by the appellant organization as remuneration for the brick
duplex dwelling.
In the absence of facts to the contrary, I think we should
assume, because of the returns that must be made in respect of workment's
compensation and unemployment insurance, that the total wages were known and,
therefore, ascertained. In reality the employees paid for the use of these
premises an amount "in the nature of a rent" or "in the
character of rent." In these circumstances it would appear that the word
"rent," as used in s. 4(1) (d), is sufficiently wide to
cover this particular payment. See also Tucker v. Morse ;
Edney v. Benham .
The personal property taxed is used in the conduct of the
laundry and dry-cleaning business. The fact that the net income from this
business is applied for the purposes of the appellant's religious organization
does not detract from the fact that the equipment here taxed is used in the
conduct of a business which serves not only the appellant's organization, but
the public generally. It, therefore, cannot be said that this personal property
is "used exclusively for religious, philanthropic or educational purposes"
within the meaning of subpara. (d) and it is, therefore, subject
to be taxed by the respondent.
[Page 106]
The appellant, however, claims that even if, under subpara.
(d), the foregoing property is taxable, it is a charitable institution
within the meaning of subpara. (g) and, therefore, that its
entire property is exempt. Subpara. (g) reads as follows:
(g) The property of any
literary or charitable society or institution;
Assuming, therefore, as the appellant contends, that it is
both a religious organization and a charitable institution, the pertinent issue
is, having regard to the provisions of the statute, may it be included and,
therefore, entitled to have all of its property exempted under the provisions
of subpara. (g)?
While the provision in subpara. (g) has been
included in The Rates and Taxes Act since 1850 (S. of N.B. 1850, 13
Vict., c. 30, s. II, art. 17, subpara. (d) was not included until
the act was consolidated and amended in 1924 (S. of N.B. 1924, 14 Geo. V, c.
3). The language adopted in the enactment of subpara. (d) read by
itself discloses the Legislature intended that all religious organizations
should be subject to the provisions of that subpara. Moreover, it would appear
that when subparas. (d) and (g) are construed
together according to the accepted rules of construction, which again the
Legislature would intend, the result is that all religious organizations are
subject only to the provisions of subpara. (d). Subpara. (d)
is particular in that it applies only to religious organizations, while
subpara. (g) is more general in character and includes all
literary and charitable societies and institutions, which would include the
majority of religious organizations as well as all other types of literary and
charitable societies and institutions. It is a case, therefore, where the rule,
as stated by Sir John Romilly, should be applied:
The general rules which are applicable to particular and
general enactments in statutes are very clear, the only difficulty is in their
application. The rule is, that wherever there is a particular enactment and a
general enactment in the same statute, and the latter, taken in its most
comprehensive sense, would overrule the former, the particular enactment must
be operative, and the general enactment must be taken to affect only the other
parts of the statute to which it may properly apply. Pretty v. Solly,
53 E.R. 1032 at 1034.
In another case Sir John Romilly gives this example:
For instance, if there is an authority in an act of
parliament to a corporation to sell a particular piece of land, and there is
then a general clause at the end that nothing in this act contained shall
authorize the
[Page 107]
corporation to sell any land, that would not control the
particular enactment, but the particular enactment would take effect
notwithstanding it was not clearly expressed and distinct, and the insertion of
the exception in the general clause would be supplied. De Winton v. The
Mayor, etc. of Brecon, (1859) 28 Law J. Rep. (N.S.) Chanc. 600 at 604.
It would, therefore, follow that subpara. (d), being
particular, should apply to all religious organizations, charitable and
non-charitable, and that subpara. (g), being general, should apply to
all other charitable societies and institutions.
The same construction, in the circumstances of this case,
finds support in the rule stated by Lord Macnaghten when, after pointing out
that where there is no preamble to the statute there are "only two cases
in which it is permissible to depart from the ordinary and natural sense of the
words of an enactment," goes on to state, as one of these exceptions,
that there is some other clause in the body of the Act
inconsistent with, or repugnant to, the enactment in question construed in the
ordinary sense of the language in which it is expressed. Vacher & Sons,
Limited v. London Society of Compositors, 1913 A.C. 107 at 118.
See also Becke v. Smith ; The Canadian Northern
Railway Co. v. The King .
That there is such an inconsistency or repugnancy between
these subparas. (d), and (g) becomes clear when it is appreciated
that religious organizations are, for the most part, charitable in character.
All religious organizations, charitable and non-charitable, are included in
subpara. (d) and are exempt from taxation except as provided in the two
exceptions therein specified. If, however, those religious organizations which
are charitable come also within subpara. (g), it follows they are
not, under that subpara., subject to the exemptions in subpara. (d). If,
therefore, the statute be so construed as to include these under subpara.
(g), the purpose and intent of subpara. (d) is largely
destroyed and the intention of the legislature, as expressed in subpara. (d),
substantially defeated. The magnitude and importance of this inconsistency or repugnancy
becomes more apaprent when it is appreciated that organizations for religious
purposes are, for the most part,
[Page 108]
charitable. Those which are charitable and non-charitable
are discussed by Sir John Wickens, V.C.:
A voluntary association of women for the purpose of working
out their own salvation by religious exercises and self-denial seems to me to
have none of the requisites of a charitable institution, whether the word
"charitable" is used in its popular sense or in its legal sense. It is
said, in some of the cases, that religious purposes are charitable, but that
can only be true as to religious services tending directly or indirectly
towards the instruction or the edification of the public; an annuity to an
individual, so long as he spent his time in retirement and constant devotion,
would not be charitable, nor would a gift to ten persons, so long as they lived
together in retirement and performed acts of devotion, be charitable." Cocks
v. Manners, 1871 L.R. 1 Eq. 674 at 585.
Lord Lindley describes a religious society non-charitable in
character
A society for the promotion of private prayer and devotion
by its own members, and which has no wider scope, no public element, no
purposes of general utility. In re White, (1893) 2 Ch. 41 at 51.
and, as stated by Lord Wrenbury,
Religious purposes are charitable only if they tend directly
or indirectly towards the instruction or the edification of the public. Chesterman
v. Federal Commissioner of Taxation, 1926 A.C. 128 at 131.
A statutory provision that appears so complete and accurate
to accomplish the purpose intended, when enacted, subsequently studied in the
light of particular facts often appears to be quite different. It then becomes
a problem of construction. The problem here presented has occurred so often
that the foregoing rules have been dictated by experience as of assistance in
determining, in such circumstances, the intention of parliaments and
legislatures. Their application in this instance not only avoids the
inconsistency or repugnancy already discussed, but also avoids a construction
which limits and restricts the comprehensive and inclusive language of subpara.
(d) in a manner that it cannot be said the Legislature ever
intended.
It would, therefore, appear that the intention of the
Legislature is given effect to by construing subparas. (d) and (g)
in such a manner that religious organizations, though also charitable, as
the appellant's is, are included only under subpara. (d).
The appeal is dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Leger &
Carvell.
Solicitors for the respondent: Creaghan &
Creaghan.
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