Victoria, City of v. University of Victoria, [1972] SCR 160

Supreme Court of Canada

City of v. Victoria, [1972] S.C.R. 160

Date: 1971-06-28

Corporation of the City of Victoria Appellant;

and

University of Victoria Respondent.

1971: May 26, 27; 1971: June 28.

Present: Judson, Ritchie, Hall, Spence and Laskin JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Taxation—Land owned by University of Victoria but under lease to commercial tenants—Validity of claim to exemption from taxation—Universities Act, 1963 (B.C.), c. 52, s. 40.

A testator who died late in 1962 left land to his trustee in trust to hold it for five years and pay the income to named charities and then to convey it to Victoria College or its successor. The University of Victoria became such successor under s. 89 of the Universities Act, 1963 (B.C.), c. 52. The land was accordingly conveyed to it, and a certificate of indefeasible title was issued in its name on January 10, 1968. A commercial building stood half on this land and half on adjoining land owned by third persons, and it was occupied by various tenants having no connection with the university. The building, situate in the business heart of the city, was managed by a trust company and the revenue therefrom was distributed according to the interests of the landowners.

Section 40 of the Universities Act reads: “The property, real and personal, vested in a University is exempt from taxation under the Municipal Act, the Public Schools Act, and the Taxation Act; and any real property so vested which is disposed of by lease to a college affiliated with the University, so long as it is held for college purposes, continues to be entitled to the exemption from taxation provided in this section.” By virtue of this section, the university claimed exemption from taxation in respect of the said property owned by it and this claim was upheld by both the trial judge and the Court of Appeal. The city then appealed to this Court and its main contentions were: (1) the land in question was not “vested” in the university when it was under lease to others; (2) if it was vested, the exemption applied only to land held for university purposes and that was not the case here.

Held: The appeal should be dismissed.

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The wide language in which the exemption was couched did not admit of the limitations urged by the appellant.

APPEAL from a judgment of the Court of Appeal for British Columbia[1], dismissing an appeal from a judgment of Wilson C.J.S.C. Appeal dismissed.

T.P. O’Grady, Q.C., for the appellant.

H.L. Henderson and R.M. McKay, for the respondent.

The judgment of the Court was delivered by

LASKIN J.—The University of Victoria took proceedings by way of originating notice of motion for determination of the validity of its claim to exemption from taxation in respect of land owned by it but under lease to commercial tenants. The matter was argued before Wilson C.J.S.C. upon an agreed statement of facts, and he upheld the claim of exemption under s. 40 of the Universities Act, 1963 (B.C.), c. 52. His judgment was affirmed on appeal in reliance on his reasons and on earlier judgments at trial and on appeal in Re Simon Fraser University[2], where a similar claim to exemption was sustained. We are now asked to say that the construction placed by the British Columbia Courts on the relevant legislation is wrong.

The facts on which the issue herein was determined may be shortly stated. A testator who died late in 1962 left land to his trustee in trust to hold it for five years and pay the income to named charities and then to convey it to Victoria College or its successor. The University of Victoria became such successor under s. 89 of the Universities Act. The land was accordingly conveyed to it (it was subject to a mortgage but that is immaterial here), and a certificate of indefeasible title was issued in its name on January 10, 1968. A commercial building stood half on this land and half on adjoining land owned by third per-

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sons, and it was occupied by various tenants having no connection with the university. The building, situate in the business heart of the city, was managed by a trust company and the revenue therefrom was distributed according to the interests of the landowners.

Section 40 of the Universities Act is in these terms:

The property, real and personal, vested in a University is exempt from taxation under the Municipal Act, the Public Schools Act, and the Taxation Act; and any real property so vested which is disposed of by lease to a college affiliated with the University, so long as it is held for college purposes, continues to be entitled to the exemption from taxation provided in this section.

Two main questions were raised in relation to this provision. It was contended by the appellant that (1) land in question was not “vested” in the university when it was under lease to others, and (2) if it was vested, the exemption applied only to land held for university purposes and that was not the case here. In this second connection, it was also argued that the university could not acquire, let alone hold, land unless for university purposes, and this was joined to a submission that the land could only be held by the Victoria College Foundation under the Victoria College Foundation Act, 1954 (B.C.), c. 67, as amended by 1963 (B.C.), c. 61, and it would, accordingly, be taxable.

It was indicated to counsel during the hearing that the ultra vires argument was untenable; and I am as well unable to see any merit in the point taken under the Victoria College Foundation Act, when the title to the land in issue here was taken in the name of the university, as it was open to it to do under that Act. I may add that the submission as to the Victoria College Foundation was related to the more comprehensive submission on the two main issues noted above, and I now turn to them.

Whether or not the land vested in the college (as it then was) at the time of the testator’s death, it is clear that the word “vested” in s. 40 of the Universities Act ex facie covers the situation which arose upon the conveyance of the land

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to the university and the issue to it of the certificate of indefeasible title. The argument against a vesting is based primarily upon a resort to legislative history, particularly to the British Columbia University Act, R.S.B.C. 1960, c. 38, and to the Victoria College Act, 1955 (B.C.), c. 115, both of which were repealed by the enactment of the Universities Act in 1963 to govern the University of British Columbia, the University of Victoria and the new Simon Fraser University. The legislative history is canvassed by Dohm J. in Re Simon Fraser University, supra. That case is distinguishable from the present one in that counsel there agreed, but did not so agree here, that land of the university leased to others none the less remained vested. I may say here that, in my opinion, nothing turns on whether leases are in force when land becomes vested in a university or are made thereafter.

Qualified exemption of university property from taxation goes back at least to 1908 (see the judgment of Dohm J., already referred to), but it is enough in this case to note the terms of exemption in s. 51 of the now repealed British Columbia University Act and s. 32 of the now repealed Victoria College Act. These provisions stipulate exemption of university and college property “until disposed of by sale, lease or otherwise”. These quoted words were dropped in s. 40 of the Universities Act, and I am unable to agree that they can be read back in, either by modifying the term “vested” or by relying on that clause of s. 40 which speaks of disposition by lease to an affiliated college. This clause has its own history, as is evident from the review by Dohm J.; and, indeed, it was carried into s. 40 from s. 51 of the British Columbia University Act although the more general qualifying words (“until disposed of by sale, lease or otherwise”) in the same section were dropped.

The submission on the alleged limitation of the exemption to property held for university purposes likewise would require for its acceptance a refined reading of s. 40 for which the Universities Act as a whole does not provide a sufficient con-

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text. The appellant relies on s. 35(1) which provides that “each University may acquire, by gift, purchase or any other manner and hold, for the purposes of a University, any and all property of every nature and kind whatsoever”; and the reliance is fortified by reference to the power given by s. 36 to expropriate “for the purposes of the University”.

These are relevant indicia for a qualified view of s. 40, but I must observe that nowhere in the Act is there any definition of “the purposes of a University” (unless they be synonymous with the duties prescribed in s. 34, and this I cannot accept); and, without acceding to the respondent’s contention that the phrase means merely “for the benefit of a University”, there are other provisions in the Act which appear to modify s. 35 and thus induce caution against reading it into s. 40. I refer, for example, to s. 48 which requires governmental approval for the purchase of land and s. 41 which empowers a university to acquire and hold land which has been taken as security or has been foreclosed or conveyed in satisfaction of debts. There is also the question whether s. 35 is completely limiting, having regard to the view already expressed that it was not ultra vires for the University of Victoria to take land as a devisee; and I may refer in this respect also to s. 94 of the Universities Act. The Court is not required in this case to come to a conclusion on the meaning and scope of the sections of the Act surrounding s. 40 but their presence without any express reference point to s. 40 is an aid to the latter’s construction.

It may be anomalous to permit a university to reap revenue from commercial leases of land acquired by devise, without being obliged to pay taxes, especially when, as was indicated to us, there also appears to be no provision for taxing the commercial tenants. The anomaly is evident in relation to university legislation elsewhere, as, for example, in Ontario where there is provision that exemption of university property from taxation is allowed only so long as it is actually used and occupied for the purposes of the university: see, for example, The Trent University Act, 1962-63 (Ont.), c. 192, s. 23; The University of

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Windsor Act, 1962-63 (Ont.), c. 194, s. 10; The York University Act, 1965 (Ont.), c. 143, s. 18. The remedy, if it be thought necessary to supply it, must come from the Legislature. The wide language in which the exemption is now couched does not admit of the limitations urged by the appellant; and it is a relevant consideration on what is essentially a local issue in British Columbia that the judges of its Courts who have considered the matter have been unanimous thereon.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitor for the appellant: T.P. O’Grady, Victoria.

Solicitors for the respondent: Harman & Co., Victoria.