Supreme Court of Canada
Association Catholique de la Jeunesse Canadienne-Française v. La Cité de Chicoutimi, [1940] S.C.R. 510
Date: 1940-06-29
L'association Catholique De La Jeunesse Canadienne-Française (Defendant) Appellant;
and
La Cité De Chicoutimi (Plaintiff) Respondent.
1940: Feb. 27; June 29.
Present: Rinfret, Crocket, Davis, Hudson and Taschereau JJ.
ON APPEAL FROM THE COURT OF KING'S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC
Assessment and taxation—Association for the welfare of youth—Incorporated by provincial statute—Exemption from municipal and school taxes--Same as that granted to religious or educational establishments—Exemption when property owned and occupied by corporation for its purposes—Whether Association entitled to exemption when practically the building is rented and leased for revenue.
[Page 511]
The appellant association was incorporated in 1916 by a special Act of the Quebec legislature (7 Geo. V, c. 110), its object being by section 3 "to assure to its members personal development by means of study circles, and to devote itself to all works of public utility within the domain of charity, education and moral, social, national and economic questions." Then in 1932, this statute was amended (22 Geo. V, c. 136), and, amongst additional powers thereto granted, the association was authorized to "install and equip, for the use of its members and of the public, establishments for the teaching and prac bice of physical culture and athletic and sporting exercises "; and, by section 4, it was enacted that "lands and other immoveables held as owner and occupied by the corporation for the above purposes are assimilated to the property of educational establishments as to exemptions from municipal and school taxes." Subsequently, the appelant association became owner of a property situated in the city respondent, it consisting of a large building in which there were offices, a theatre, a skating rink, badminton courts, billiard rooms, bowling alleys and restaurants. The theatre, two of the offices, and the skating rink were leased and a general admission fee was charged by the association for the privilege of using the other entertainment places, there being no difference in the fee depending on whether one of the public was a member of the association or not. But there were two offices used by the association, one being occupied by a priest acting as chaplain and co-manager and the other serving as library and meeting hall for the members. The respondent city sued the appellant association for $4,060.64 for municipal and school taxes imposed for the fiscal years of 1936 and 1937. The appellant took the ground that its property was exenc.pt from these taxes under the amended statute above mentioned; and it also urged that the chaplain's office and the library room, being used for the purposes of the association, and therefore not taxable, had been illegally assessed for taxation and that the whole valuation of the appellant's property was null and void; but, in its conclusions, the appellant merely asked for the dismissal of the respondent's action. Judgment was rendered by the Recorder's Court in favour of the respondent for the amount of its claim less the sum of $94.35, the Recorder exempting the two offices from taxation; and that judgment was affirmed by the appellate court. There was no cross-appeal in that Court or in this Court as to the partial exemption granted by the trial judge.
Held that the judgment appealed from should be affirmed and the respondent city's action maintained.
Per Rinfret, Crocket, Hudson and Taschereau JJ.—The theatre, the arena, the rented offices and the restaurants constituted for the benefit of the appellant association sources of revenues; and consequently the latter could not benefit from the exemption of taxes provided by the statute. The appellant's rights are the same as those of the religious institutions or educational establishments; and the clause creating an exemption from taxes has its application only when the properties are occupied by them for the purposes for which they have been established, and not solely to raise a revenue.—The other ground of appeal raised by the association that the valuation was null in to for the reason that part of the building, not being taxable, had been assessed, must be dismissed,
[Page 512]
as there is no clear and positive evidence that these two offices were occupied by the association for the attainment of the purposes mentioned in the incorporating Act. Toronto Ry. Co. v. Toronto ([1904] A.C. 809), Donohue v. Paroisse de St. Etienne de la Malbaie ([1924] S.C.R. 511) and Montreal L.H. & P. Co. v. Westmount ([1926] S.C.R. 515) discussed.
Per Davis J.—The incorporating statute clearly enacts that the exemption is only while the property is owned and occupied by the appellant association for the purposes of the corporation. Moreover, the building cannot be assessed piecemeal; two or three rooms out of a large office building, for instance, cannot be left free from taxation and yet all the other rooms be subject to it; the building is either taxable or it is not taxable.—Whatever may be said as to the occupation of several different parts of the building, it is not disputed that two portions are rented for private office use and the theatre portion is leased on a yearly basis. On a fair interpretation of the statutory provision, the corporation to be entitled to exemption must occupy the immoveable property for its own purposes and it cannot be said to occupy the immoveable property when any substantial portion of it is in the occupation of others. The statute is not satisfied by showing that the corporation occupies some portion of the building for its own purposes.
APPEAL from the judgment of the Court of King's Bench, appeal side, province of Quebec, affirming the judgment of the Recorder's Court of the city of Chicoutimi and maintaining the respondent city's action for the recovery of taxes on property owned by the appellant.
The material facts of the case and the questions at issue are stated in the above head-note and in the judgments now reported.
Paul Leblanc and Jean Filion for the appellant.
J. C. Gagné K.C. and J. A. Gagné K.C. for the respondent.
Rinfret J.—Pour les raisons que donne mon collègue, M. le juge Taschereau, et dans lesquelles je concours, je suis d'avis que l'appel doit être rejeté avec dépens.
Davis J.—The appellant association was incorporated in 1916 by a special Act of the Quebec legislature, being 7 Geo. V, ch. 110. The object of the Association was by sec 3,
to assure to its members personal development by means of study circles, and to devote itself to all works of public utility within the domain of charity, education and moral, social, national and economic questions.
[Page 513]
The preamble of the statute stated that the Association had been founded at Montreal in 1904, that it had existed since that date, and had a great many members grouped among over one hundred study circles.
Then in 1932, by 22 Geo. V, ch. 136, the statute was amended. The preamble to this amending statute, after repeating the object of the Association, proceeded to state,
That, to realize the above purpose, it is necessary to develop in young men, members of the Association or not, besides intellectual and moral vigour, a robust physical constitution by sound and healthy athletic exercises.
It is to be noted that the words are "members of the Association or not." The preamble proceeds to say
That such program demands that the (Association) found, in various parts of the province, establishments wherein will be taught and practised for purposes of education and of moral and physical training, all bodily exercises pertaining to physical culture and gymnastics; and that to attain such objects the Association needs to acquire and possess moveable and immoveable property of a higher value than that presently fixed by its Charter.
The preamble proceeds to state that the Association has acquired by deed certain immoveable property in the city of Montreal from the National Amateur Athletic Association which, with the furniture and various moveable things, may serve to utilize the immoveable property "as a sporting and educational establishment" ; and that, certain doubts having arisen as to the validity of the acquisition of this property, the validation of the deed of sale is required. Then follow in the preamble words that may be of importance in this case by way of explanation :
That, by its charter, the National Amateur Athletic Association benefited by certain privileges and tax exemptions:
That the (Association) by pursuing amongst other objects the work of the National Amateur Athletic Association, with a larger scope, needs the benefit of the same privileges;
That for such purposes the (Association) requires that more ample powers be granted in the exercise of its charter, and, particularly certain privileges and tax exemptions, and
Whereas it is expedient to grant its prayer;
There is then enacted sec. 1, which repeals sec. 4 of the original Act and substitutes a new section 4; sec. 2 of the amending statute validates the deed of sale from the National Amateur Athletic Association; and sec. 3 enacts than the Act shall come into force on the day of its sanction.
[Page 514]
Reverting then to new sec. 4 with which we are concerned, it contains by repetition the general powers granted by the original statute but adds additional powers, amongst which is to be found one in these words:
The corporation * * * may * * * found, install and equip, for the use of its members and of the public, establishments for the teaching and practice of physical culture and athletic and sporting exercises ;
The words " for the use of its members and of the public " are to be noted. The omnibus clause is repeated:
and, generally, exercise the powers vested in civil corporations and such powers as may aid it in attaining its object, or serve to put its means of action in operation and to carry out its undertakings.
As part of new sec. 4 and immediately following the enumeration of the powers of the corporation, are these words :
Any law or by-law to the contrary notwithstanding, the buildings, lands and other immovables held as owner and occupied by the corporation for the above purposes are assimilated to the property of educational establishments as to exemptions from municipal and school taxes.
Such tax exemption shall not apply to the water tax nor to special taxes for sewers, paving, sidewalks and public lighting.
In this action the respondent, the city of Chicoutimi, sued the appellant Association for $4,060.64 for municipal and school taxes imposed for the fiscal years 1936 and 1937 in respect of the appellant's immovable property in the said city. The appellant took the ground that its said property was exempt from these taxes under the amending statute above mentioned but in its defence, while it pleaded that the entry on the valuation roll was null and void, merely asked for the dismissal of the action with costs. The position taken by the city was that the immovable property of the Association is only entitled to exemption when it is owned and occupied by the corporation for the purposes of the corporation.
The action was tried in the Recorder's Court of Chicoutimi and the Recorder gave judgment in favour of the city for the amount of its claim, less the sum of $94.35. The property in question is owned by the appellant and consists of a large building in which there are offices, a theatre, a skating rink, badminton courts, billiard rooms, bowling alleys and restaurants. Part of the building, the theatre, is leased for use for the exhibition of moving
[Page 515]
pictures as a rental of $2,000 per year plus a share in the profits. One of the offices is rented to a Mr. Murdock at $40 per month and another office is rented at $25 per month. The Arena is used in the winter for skating and hockey games and in the summer months is leased from time to time for professional wrestling at the rate of $40 per evening. A general admission fee to the public is charged for the skating rink, the bowling alleys, the billiard rooms, the badminton courts, etc. Apparently there is no difference in the admission fee depending on whether one of the public is a member of the Association or not.
The Recorder on the evidence came to the conclusion that the whole building was really used for commercial purposes and gain but he did think that two small rooms in the building might be regarded as used solely for the purposes of the Association;
though from a strictly legal point of view, in view of the absence of clear and positive evidence, these two rooms should not be exempt, I exempt them from taxation;
and the Recorder accordingly reduced the respondent's claim by $94.35. The appellant Association appealed against this judgment to the Court of King's Bench which by a majority affirmed the judgment. The appellant has now appealed to this Court.
It is clear upon the statute that the exemption is only while the property is owned and occupied by the corporation for the purposes of the corporation. Now the building cannot be assessed piecemeal; you cannot take two or three rooms out of a large office building, for instance, leave them free from taxation and yet tax all the other rooms in the building. The building is either taxable or it is not taxable. The city very naturally, as its counsel states, did not appeal from the judgment which gave it its entire claim except $94.35. What the city says is that if it had any right of appeal, which it doubts, in respect of the amount of the small deduction, it was not worth the costs of an appeal and the city was quite content to let the small item go.
Whatever may be said as to the occupation of several different parts of the building, it is not disputed that two portions are rented for private office use and the theatre portion is leased on a yearly basis. On a fair
[Page 516]
interpretation of the statutory provision, the corporation to be entitled to exemption must occupy the immovable property for its own purposes and it cannot be said to occupy the immovable property when any substantial portion of it is in the occupation of others. The statute is not satisfied by showing that the corporation occupies some portion of the building for its own purposes.
For these reasons I am of opinion that the appeal should be dismissed with costs.
The judgment of Crocket, Hudson and Taschereau JJ. was delivered by
Taschereau J.—L'appellante, l'Association Catholique de la Jeunesse Canadienne-Française, á été incorporée par 7 Geo. V, chapitre 110. En 1932, en vertu du statut 22, Geo. V, chapitre 136, sa charte a été amendée et certaines exemptions de taxes municipales et scolaires lui ont été accordées.
L'article 3 de la dite loi telle que revisée se lit de la façon suivante:—
3. L'objet de la corporation est d'assurer à ses membres un complément de formation personnelle au moyen de cercles d'études, et de travailler au succès des entreprises d'utilité publique qui se rapportent à la charité, à l'éducation et aux questions morales, sociales, nationales et économiques.
L'article 4 est ainsi rédigé:—
4. La corporation aura succession perpétuelle, et pourra:
Avoir un sceau commun et le modifier à volonté; ester en justice; fonder des cercles d'études, organiser des cours, des conférences, des journées d'études et des congrès, pour la poursuite de son objet; fonder et maintenir des bibliothèques et des salles de lecture; acheter, imprimer, éditer, publier et vendre des revues, livres, journaux, brochures et feuilles de propagande assortis à ses desseins et à son objet; fonder, installer et équiper, pour l'usage de ses membres et du public, des établissements pour l'enseignement et la pratique de la culture physique et des exercices athlétiques ou sportifs; accepter, acquérir et recevoir, par achat, donation, testament, legs ou autrement, et posséder des biens meubles et immeubles, en retirer des revenus, pourvu que le revenu annuel des immeubles appartenant à la corporation et possédés par elle pour des fins de revenu n'excède pas deux cent mille dollars; les louer, vendre, échanger, hypothéquer, céder, aliéner ou autrement en disposer; emprunter, émettre des obligations (debentures) garanties par hypothèques, par gage ou nantissement, s'il y a lieu; percevoir de ses membres des cotisations, contributions, souscriptions et abonnements; encourager les études et les œuvres qui se rapportent à l'objet de l'A.C.J.C.; organiser des concours, fonder des prix, attribuer des récompenses; aider et soutenir, dans la mesure de leurs besoins et des ressources de la corporation, des entreprises propres à répandre la culture de l'esprit et à assurer la défense des
[Page 517]
intérêts religieux, sociaux et nationaux; et, en général, exercer les pouvoirs qui appartiennent aux corporations civiles ordinaires, et les pouvoirs qui peuvent l'aider à atteindre son but ou servir à la mise en œuvre de ses moyens d'action et à l'exécution de ses entreprises.
Nonobstant toutes lois ou règlements à ce contraire, les bâtiments, terrains et autres immeubles possédés à titre de propriétaire et occupés par la corporation, pour les fins susdites, sont assimilés aux biens des maisons d'éducation, quant aux exemptions de taxes municipales et scolaires.
Cette exemption de taxes ne s'appliquera pas à la taxe d'eau ni aux taxes spéciales pour canaux d'égouts, pavages, trottoirs et éclairage public.
La ville de Chicoutimi où est situé l'immeuble de l'appelante a institué des procédures légales contre celle-ci pour lui réclamer la somme de $4,060.64 représentant les taxes municipales et scolaires pour les années 1936 et 1937, ainsi que les intérêts. L'appelante a répondu qu'elle ne devait pas le montant parce que l'immeuble est possédé et occupé par elle pour les fins mentionnées à la loi qui l'incorpore, et que les règlements, résolutions, ainsi que les rôles d'évaluation et de perception invoqués par l'intimée sont illégaux et ultra vires. Le Recorder de Chicoutimi devant qui la cause a été instruite a partiellement admis cette prétention de l'appelante. Il en est venu à la conclusion que la majeure partie de l'immeuble était taxable, que le reste ne l'était pas, et il a maintenu l'action pour la somme de $3,966.29 avec intérêts et dépens.
Cet immeuble qui fait l'objet du présent litige est connu sous le numéro P. 233 et P. 234 du cadastre de la ville de Chicoutimi. L'appelante n'occupe pas cet immeuble en entier. Elle a loué un théâtre à un particulier qui l'exploite pour son bénéfice personnel; elle a aussi loué une pièce à un monsieur Murdock qui l'occupe comme bureau, une salle de 55 par 60 pieds au Syndicat Catholique, et quelques petits restaurants attenant aux pièces ci-dessus mentionnées. Le reste de la bâtisse, comprenant le bureau de l'aumônier, et la salle de l'Association ne sont pas loués et sont occupés par l'appelante.
Dans l'immeuble se trouve également une patinoire. La preuve révèle que cette patinoire n'est pas louée et à cet cet endroit, durant l'hiver, on y donne des exhibitions payantes de hockey, et durant d'autres saisons des séances de lutte.
Je partage l'opinion du Recorder de Chicoutimi et celle de la majorité des juges de la Cour du Banc du Roi qui en sont venus à la conclusion que le théâtre, l'arena, le
[Page 518]
bureau occupé par monsieur Murdock, la salle du syndicat catholique ainsi que les trois restaurants constituent pour l'appelante des sources de revenus et ne sauraient en conséquence bénéficier de l'exemption de taxes prévue au statut. L'appelante n'a pas plus de droits que les communautés religieuses et les maisons de charité, car l'acte législatif qui l'incorpore la place sur le même pied que celles-ci. La clause créant l'exemption de taxes municipales et scolaires ne trouve son application que lorsque les propriétés sont occupées par des institutions religieuses ou charitables, pour les fins pour lesquelles elles ont été établies, et non pas uniquement pour en retirer un revenu. (Vide loi des cités et des villes, art. 520; loi de l'Instruction Publique, art. 251.)
Il en est ainsi de l'immeuble de l'appelante. Quand le statut décrète que les immeubles possédés et occupés par elle pour les "fins susdites", sont assimilés aux biens des maisons d'éducation quant aux exemptions de taxes municipales et scolaires, je crois qu'il faut voir dans les mots " fins susdites " une référence à la section 3 de la loi qui définit les objets de l'A.C.J.C., et non pas à la section 4 qui donne les moyens d'atteindre ces objets. Il semble clair que le théâtre, l'arena et quelques autres pièces de l'immeuble constituent des sources de revenus, et ne sont pas occupés par l'appelante pour les fins qui lui permettent d'atteindre les objets mentionnés à l'article 3 de sa charte. Même si les revenus sont versés au fonds général de l'appelante, l'immeuble serait taxable, car c'est l'usage que l'on fait de l'immeuble qu'il faut considérer et non pas l'usage des revenus de cet immeuble.
Mais, nous dit l'appelante, le bureau de l'aumônier et la salle de l'Association sont occupés par elle et servent à assurer à ses membres un complément de formation personnelle et à atteindre ainsi l'objet de la corporation. Cette partie de l'immeuble n'était pas taxable, et a été tout de même imposée par la ville. Cette imposition de taxe étant illégale, il s'ensuivrait que tout le rôle quant à l'appelante est nul, et on nous cite de nombreuses autorités pour appuyer cette prétention. C'est ainsi que dans son factum et à l'argument l'appelante a cité les causes
[Page 519]
de Toronto Railway Co. v. Toronto Corporation; Donohue v. La Corporation de la Paroisse de St-Etienne de la Malbaie ; Montreal Light, Heat & Power v. Cité de Westmount. Dans la première de ces causes, Toronto Railway Co. v. Toronto Corporation, il a été décidé ce qui suit (p. 815) :—
It appears to their Lordships that the jurisdiction of the Court of Revision and of the Courts exercising the statutory jurisdiction of appeal from the Court of Revision, is confined to the question whether the assessment was too high or too low, and those Courts had no jurisdiction to determine the question whether the assessment commissioner had exceeded his powers in assessing property which was not by law assessable. In other words, where the assessment was ab initio a nullity they had no jurisdiction to confirm it or give it validity.
Et plus loin, à la même page:—
In Nickle v. Douglas the exact point arose. The appellant had unsuccessfully appealed to the Court of Revision, and it was held, after an elaborate anamination of the previous authorities in the English and Canadian Courts, that that Court had no jurisdiction to decide any question whether particular property was assessable, and also that the party was no: estopped by having previously appealed to the Revision Court. In London Mutual Insurance Co. v. City of London, the decision of the county court judge was treated as final, because the question was within the jurisdiction of the assessor.
Dans la cause de Donohue v. La Corporation de la paroisse de St-Etienne de la Malbaie, le juge Anglin dit à la page 516 :—
The appellants' machinery was non-assessable. In assessing the appellants in respect of it the assessors were dealing with something beyond their jurisdiction. The assessment was therefore a nullity and neither appeal from it nor action to question the roll for illegality in respect of it was necessary.
Et plus loin.:—
In the Shannon case the subject-matter of the assessment was admittedly within the jurisdiction of the assessors; it was over-valuation that was complained of; that over-valuation was charged to be the result of a systematic disregard of the prescribed principles of assessment.
Dans la cause de Montreal Light, Heat & Power v. City of Westmount, il a été décidé par cette Cour que Taction de la cité de Westmount au montant de $8,226.86 devait être rejetée, parce que ce montant représentait des
[Page 520]
taxes sur l'évaluation de compteurs électriques qui étaient installés dans des maisons privées. La Cour a décidé que ces compteurs n'étaient pas des immeubles, et non seulement Taction a été rejetée mais le rôle quant à la Montreal Light, Heat & Power a été annulé.
Le cas qui nous occupe est bien différent. L'immeuble dans son ensemble constitue une source de revenus pour l'appelante, et même s'il n'était pas productif de revenus, il serait encore taxable, à moins qu'il ne soit démontré qu'il sert à atteindre l'objet de la corporation qui est, encore une fois:—
d'assurer à ses membres un complément de formation personnelle au moyen de cercles d'études, et de travailler au succès des entreprises d'utilité publique qui se rapportent à la charité, à l'éducation et aux questions morales, sociales, nationales et économiques.
C'est à cette seule condition que l'immeuble est assimilé aux maisons d'éducation. Il importait donc à l'appelante de démontrer l'application de la loi exceptionnelle qui la régit. La preuve révèle au contraire que dans le bureau de l'aumônier qui, avec un monsieur Gagnon, est le gérant de l'immeuble, se contrôlent les diverses opérations financières, se perçoivent les loyers, et s'exercent la censure des vues cinématographiques.
Quant à la salle où se trouve une bibliothèque, je partage l'opinion du Recorder, de M. le juge Barclay et de M. le juge Galipeault, qui ne sont pas satisfaits de la preuve apportée par l'appelante pour soustraire cette partie de l'immeuble à l'imposition des taxes foncières.
En quoi cette salle et le bureau de l'aumônier serventils aux "fins susdites"? Il est possible qu'il en soit ainsi, et que dans cette salle et le bureau de l'aumônier on pose des actes qui soient de nature à aider la corporation à atteindre les fins mentionnées à sa charte. Mais il faut le prouver, et non pas se contenter d'affirmations générales et imprécises qui ne nous éclairent pas sur la véritable nature des oeuvres accomplies.
A défaut de cette preuve positive qui incombe à l'appelante, je ne puis me permettre de faire des conjectures, et je ne puis pas présumer que ces pièces de l'immeuble servent à des travaux d'utilité publique, d'éducation, de charité, ou à des œuvres où se discutent des questions morales, sociales, nationales et économiques.
[Page 521]
Il est vrai que le Recorder exempte rappelante des taxes payables pour le bureau de l'aumônier et la salle, mais, après avoir démontré que le tout doit être taxé, il s'exprime de la façon suivante:
Cependant, bien qu'au point de vue strictement légal, ces deux appartements tu l'absence d'une preuve claire et positive, ne devraient pas être exempts, je les exempte de la taxe.
Evidemment, le Recorder ne conclut pas suivant les faits prouvés. Mais, parce qu'il réduit la réclamation de la ville de $94.35, ou de $47.17 par année, devons-nous pour cela décider que tout le rôle est nul et que l'appel doit être maintenu?
Je ne le crois pas, et je ne suis pas prêt à me rallier à cette opinion, La ville de Chicoutimi n'a pas logé de contre-appel. Elle a agi sagement, car il est douteux qu'elle eût le droit de le faire, et le montant en jeu était si minime qu'il n'en valait pas la peine. Ce que j'ai dit précédemment indique que si semblable contre-appel eût été logé, pour ma part je l'aurais maintenu.
Son défaut de le faire ne fait perdre à la ville que cette somme de $94.35 mais aucun autre de ses droits. Ce serait jeter la confusion dans les affaires municipales de l'intimée que d'annuler tout le rôle quant à l'appelante.
L'appel doit être rejeté avec dépens.
Appeal dismissed with costs.
Solicitor for the appellant: Paul Leblanc.
Solicitor for the respondent: J. C. Gagné.
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