Middleton,
J.A.:—These
two
cases
are
appeals
in
the
nature
of
special
cases
from
the
decision
of
His
Honour
Judge
Me-
Gibbon,
acting
Judge
of
the
County
of
Peterborough,
pronounced
on
the
16th
day
of
Feb.,
1934,
under
the
provisions
of
sec.
84
of
the
Assessment
Act,
R.S.O.
1927,
c.
238.
In
the
first
case
Bradburn
is
a
shareholder
in
Bradburn’s
Ltd.,
an
incorporated
company
whose
income
has
been
assessed.
by
virtue
of
sec.
Sa
of
the
Corporations
Tax
Act
as
enacted
by
the
amendment
of
1932,
22
Geo.
V,
c.
8,
sec.
3.
During
the
year
1932
Bradburn
received
dividends
upon
his
stock
holding
in
the
company
to
the
amount
of
$7,267.
He
claims
exemption
by
reason
of
the
payment
by
the
company
of
corporation
taxes.
The
company
has
been
assessed
and
paid
a
business
assessment
but
has
not
been
assessed
for
income.
The
appellant
Hall
is
a
shareholder
of
the
Peterborough
Examiner
and
has
received
$5,400
income
upon
the
stock
held
by
him
in
the
company.
The
company
has
been
assessed
for
business
assessment
but
has
not
been
assessed
in
respect
of
income,
but
has
paid
a
corporation
tax
under
the
Statute
mentioned.
To
understand
these
appeals
it
is
necessary
to
recall
shortly
the
history
of
the
Statute
under
which
the
taxation
is
imposed.
The
Maclennan
Commission
reported
in
1902
against
the
continuance
of
the
then
provisions
by
which
all
personal
property,
subject
to
certain
exceptions,
was
liable
for
assessment
and
taxation.
This
tax
was
found
to
be
unfair
and
oppressive,
subject
to
many
abuses
and
productive
of
comparatively
small
returns.
In
the
opinion
of
the
Commission
and
of,
I
may
say,
everyone,
it
was
desirable
to
find
some
method
of
taxation
which
would
overcome
these
difficulties.
The
Legislature
in
1904,
by
4
Edw.
VII,
ec.
23,
substituted
for
this
tax
on
personalty
the
business
tax.
This
tax
was
upon
the
value
of
the
lands
occupied
in
connection
with
the
business.
An
assessment
of
the
business
was
made
at
a
percentage
varying
from
150%
of
the
value
of
the
land
occupied
in
a
ease
of
a
distiller
to
25
%
in
a
ease
of
a
retail
merchant,
and
this
tax
was
to
stand
in
lieu
of
an
income
tax.
The
only
exception
made
was
in
the
case
of
lawyers,
doctors,
dentists,
engineers
and
surveyors.
These
privileged
classes
were
compelled
to
pay
an
income
tax
in
addition
to
their
business
tax
if
the
income
tax
should
exceed
the
business
tax.
There
was
in
addition
an
income
tax
to
be
levied
upon
all
those
possessed
of
an
income
and
who
were
not
subject
to
business
taxes.
In
the
working
out
of
this
scheme
the
Statute
provided,
sec.
4,
subsec.
(17),
for
an
exemption
in
respect
of
"the
dividends
or
income
from
stock
held
by
any
person
in
any
incorporated
company,
the
income
of
which
is
liable
to
assessment
in
this
Prov-
ince’’,
and
by
sec.
11,
that,
subject
to
the
exemption
provided
by
the
Act,
every
person
would
be
taxed
in
respect
of
income
who
was
not
liable
to
business
assessment,
and
in
addition
every
person
liable
to
business
assessment
from
income
who
had
income
not
derived
from
the
business,
and,
thirdly,
the
income
of
lawyers,
doctors,
etc.,
to
the
extent
to
which
the
income
exceeds
the
business
assessment:
In
1922
a
radical
departure
from
this
scheme
of
taxation
was
introduced.
The
Legislature
had
apparently
forgotten
that
the
business
tax
was
a
substitute
for
a
personalty
tax
and
enacted
(12-13
Geo.
V,
c.
78,
sec.
9)
that
it
should
be
in
effect
a
minimum
income
tax
and
the'provision
which
is
now
found
in
sec.
10(c)
in
the
Revised
Statutes,
1927,
c.
238,
was
substituted
for
the
old
provision
with
respect
to
the
assessment
of
lawyers,
doctors,
etc.,
and
enacted
that
every
person
liable
to
business
assessment
to
the
extent
to
which
the
income
exceeds
the
amount
of
the
business
assessment
shall
be
liable
for
assessment
for
income
tax
with
respect
to
the
excess,
adding
the
words
"‘excepting
incorporated
companies
and
commissions,
or
trustees
assessable
under
sec.
45a’’.
See.
45a
is
now
sec.
46
and
provides
that
the
land
owned
by
a
municipal
corporation
or
commission
or
trustees
or
any
other
body
acting
for
the
municipal
corporation
and
for
use
for
public
utilities
purposes
shall
be
liable
to
be
taxed
as
therein
provided.
I
find
it
impossible
as
a
matter
of
grammatical
construction
to
determine
whether
it
is
the
intention
of
this
section
to
except
all
incorporated
companies
or
only
incorporated
companies
assessable
under
sec.
46,
and
I
am
happy
to
say
I
do
not
think
it
necessary
now
to
determine
this
conundrum.
In
the
meantime
the
Corporations
Tax
Act,
R.S.O.
1927,
c.
29,
had
been
passed
providing
for
the
taxation
of
certain
corporations
for
the
purpose
of
providing
a
provincial
revenue.
In
1932
this
provincial
Act
was
amended
(22
Geo.
V,
c.
8,
secs.
2(9)
and
3)
so
as
to
include
all
incorporated
companies
transacting
business
within
the
Province
and
imposing
a
tax
of
⅒
of.
1%
upon
the
paid-up
capital
and
certain
other
taxes
upon
offices
occupied
by
the
company,
and
a
tax
of
1%
on
the
net
revenue
of
the
company.
It
is
the
contention
of
the
appellants
that
the
imposition
of
this
tax
relieves
the
shareholders
from
the
payment
of
municipal
income
tax
by
reason
of
the
exemption
provision
now
found
as
subsec.
(20)
of
sec.
4,
of
the
Assessment
Act,
R.S.O.
1927,
c.
238,
"The
dividends
or
income
from
stock
held
by
any
person
in
an
incorporated
company,
the
income
of
which
is
liable
to
assessment
in
Ontario.’’
I
am
clearly
of
the
opinion,
noth
withstanding
the
very
ingenious
argument
of
counsel
for
the
appellants,
that
the
assessment
which
is
spoken
of
in
this
section
of
the
Statute
is
confined
to
an
assessment
for
the
purpose
of
municipal
revenue
under
the
Assessment
Act.
It
operates
to
exempt
the
shareholders
not
merely
where
the
company
is
assessed
in
the
same
municipality,
but
where
the
company
is
assessed
anywhere
in
the
Province
for
municipal
purposes.
The
purpose
of
the
section
was
to
avoid
a
double
assessment
for
municipal
purposes.
The
section
is
cognate
with
the
last
clause
of
subsec.
(c)
of
sec.
10
which
provides
against
the
assessment
of
the
income
of
a
partner
his
share
of
partnership
earnings
which
have
already
been
assessed
against
the
partnership.
Upon
the
argument
of
this
appeal
a
question
was
raised
for
the
first
time
which
was
not
discussed
before
the
County
Judge.
I
am
not
sure
that
it
is
open
upon
this
stated
case.
It
is
said
that
the
income
of
the
company
is
‘‘liable
to
assessment’’
and
so
the
income
of
the
shareholder
is
exempt
(see.
4(20)).
This
is
not
shown.
The
company
is
assessed
for
business
and
so
is
exempt
from
income
tax
unless
it
is
shown
that
the
income
exceeds
the
amount
of
the
business
assessment
and
then
only
to
the
amount
of
such
excess.
It
is
not
shown
that
the
income
of
the
company
exceeds
the
amount
of
the
business
assessment.
It
is
far
from
clear
that
liability
for
income
assessment
upon
part
of
this
income
only
would
give
an
exemption
to
the
shareholders
under
sec.
4(20).
The
appeal
should
therefore
be
dismissed
with
costs.
The
attention
of
those
in
authority
is
drawn
to
the
unsatisfactory
condition
of
this
legislation
so
that
it
may
be
remedied.
An
amendment
made
in
1934
(24
Geo.
V,
c.
1,
see.
4)
does
not
really
touch
this
difficulty.
Appeals
dismissed
with
costs.
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