Township of Teck v. Hayward Et Al., [1935-37] CTC 144

LATCHFORD, C.J.A.:—This appeal is from a judgment pronounced on November 7, 1935, by the Honourable Mr. Justice Kingstone dismissing appeals from His Honour G. H. Hayward, Esq., Judge of the District of Temiskaming, sitting on appeals by the respondents against assessment for income for the year 1955. The judgment appealed against dismisses appeals by the Township of Teck from the judgment of the District Judge. The grounds of appeal are:

"1. That the learned District Court Judge, having jurisdiction to entertain an appeal from the assessment of income of the company respondents, could, in the exercise of that Jurisdiction, deal with and purport to make an order in respect of the rate and amount of taxes consequent upon the assessment of income.

‘2. That the learned District Court Judge, in making an order respecting the amount of income tax payable by virtue of an assessment of income which was not varied, was merely making a mistake of law in disposing of a question within his jurisdiction.

"3. That the learned District Court Judge was in fact attempting to deal with a matter not within his jurisdiction namely,—the rate of taxation under the guise of dealing with a matter within his jurisdiction, namely,—the amount of income for which the company respondents should be assessed.

"4. That such finding of the learned District Court Judge was not a mistake of law on a matter within his jurisdiction but an attempted exercise by the said learned Judge of jurisdiction which he was not entitled to exercise.’’

The respondents contend that no appeal lies from the judgment pronounced by Kingstone, J.; and that, even if such an appeal did he, the judgment of the learned District Judge allowing the appeal of the three mining companies was final and conclusive and not appealable in any way.

Apart from whether an appeal lies from any decision that may have been made by the learned District Court Judge, the really important question to be determined on this appeal, is I think whether the municipal corporation of the Township of Teck had a right in 1935 to assess, as it then assessed, the respondents on the respective incomes which they derive from the mines in the municipality ; and, if so, whether that right was properly exercised. To reach a conclusion on the point it seems to me necessary in the first place to refer to the powers given by the Assessment Act, R.S.O. 1927, c. 238, as amended, in 1934. Under the provisions of sec. 4 of the Act all income (with stated exceptions immaterial here) is liable to municipal taxation. Subsees. (6) and (9) of sec. 40 of the Act of 1927 render the incomes of mining companies like the respondents liable to taxation by the municipality in which their mines are situated; and impose on the municipalities the duty of collecting such a tax. Whether prior to 1935 the respondent companies were assessed for and paid any municipal income tax whatever does not clearly appear. What is certain is that in 1934, after the Act was amended by 1934 (Ont.), c. 1, special tax rolls pursuant to see. 1204 were prepared for the assessment of the incomes of these companies.

This amendment is general in its scope. It relates to all taxable incomes and not merely to the income of a person like each of the respondents. Each respondent was in receipt of a large income from its operations in the township, and was "‘a person liable to assessment in respect of income ‘ if certain procedure was adopted as directed by the amendment mentioned.

Complying apparently with the very letter of subsec. 1 of sec. 120a, the council of the Township of Teck passed By-law No. 702 on August 20, 1934, providing for the preparation of a special roll of taxable incomes, and for the entry thereon of the names of all persons liable to such taxation, and stated the amount of the taxable income of each. The respondents were undoubtedly "‘such persons’’; interpretation clause 1 of the Act, subsee. (1).

Subsee. 2 of sec. 120a provides that the rate mentioned in subsee. (1) should be the same as that levied in the current year upon real property. However, in the case of a mine, this provision, otherwise of general application, was limited expressly by see. 40(9) of the Act which prohibited the income tax levied by a municipality upon a mine subject to provincial taxation under the Mining Tax Act, R.S.O. 1927, c. 28, from exceeding 11% on the annual profits of a mine up to a sum which would yield a tax of $35,000. The income on which 112% would produce $35,000 is $2,333,333.33. On the annual profits which exceed the two and a third million dollars, "‘an additional” tax of ‘‘one per centum of such excess . . . shall be payable to the municipality’’; Assessment Act, sec. 40(9) ad fin. Special exemption from the general rule (56.56), which could be imposed under see. 120a(2) in the case of a mine taxable for income as provided in sec. 40(9), excludes the higher rate that would otherwise be payable. The statute itself definitely limits the rates higher than which, in the case of persons like the respondents, the municipality was prohibited from imposing.

It is well-settled law that in interpreting a statute, even a statue which like a taxing Act must be strictly construed, the statute must be considered as a whole; provisions that are in apparent conflict should be reconciled if possible, or made subject to the principle that a general provision must be limited by a special provision relating to the same subject-matter. In any conflict existing between sec. 120a, either subsee. (1) or (3), and sec. 40(9), the words applicable to rates on incomes in general must yield to the special limitation placed on the rate imposable on the income of a mining company. Where in the statute the particular intention expressed is inconsistent with the general intention, the particular intention is to be considered in the nature of an exception (see Craies, 3rd ed., pp. 196 et seq.).

Referring more particularly to subsees. (6) and (9) of see. 40, the former provides that :—" ‘ The income from a mine or mineral work shall be assessed by, and the tax leviable there shall be paid to the municipality in which such mine or mineral work is situate. ‘‘

Subsec. (9) is equally clear. I quote it in full:—^Notwithstanding anything in this section contained the income tax payable to any municipality upon a mine or mining work liable to taxation under section 4 of The Mining Act shall not exceed one and one-half per centum of the annual profits of the mine or mining work upon which the tax payable under the said section 4 is based, unless the amount of such annual profit exceeds a sum which will yield $35,000 in respect of such income tax when an additional one per centum of such excess annual profits shall be payable to the municipality.’’

Much of what the appellants did pursuant to see. 120a(1) of the amendment of 1934 is accurately stated in the reasons for judgment of Kingstone, J. and need not be repeated. After the rolls were prepared a rating by-law numbered 750 was finally passed on June 19, 1935. The notices demanding payment sent to each respondent are identical in form, but necessarily varying in amount, as the respective incomes of the mines varied. In each case on what may be called the taxable incomes were as follows :—

The several amounts over the sum of $2,333,333.33 which at 112% would produce a tax of $35,000 were

On such excesses the notices demanded 212% from the mining companies, or, in the above order, $9,663.10, $184,869.20 and $41,712.85. Adding in each case $35,000, the total amount claimed was $341,245.15. The companies appealed to the Court of Revision. Wright-Hargreaves stated no ground for its appeal; Teck-Hughes asserted that there was improper assessment and overcharge; while Lake Shore’s statement was simply, ‘‘total assessment should be $108,947.69”.

On July 19, 1935, the Court of Revision confirmed the several assessments. Notice of appeal to the District Judge, pursuant to sec. 75 of the Assessment Act, was duly given by these mining companies. The notices are identical in form. Each refers to the dismissal of its appeal to the Court of Revision, "from the assessment, and the rate fixed for payment thereon, and the demand for payment of said rate”.

Beyond this reference to "amount'', ‘‘rate’’ and "demand', nothing in the nature of a ground of appeal appears in any of the notices. They add, however, that on the hearing of the appeals the companies "will desire to adduce evidence”.

No formal judgment was issued in any of the three appeals. It seems that none is ever issued in such eases. If such is the fact the practice is, I think, to be deprecated, especially where, as here, large assessments are involved. The reasons for judgment and the conclusion based upon them constitute the judgment and form the only indisputable source of information as to what was precisely in issue before the learned Judge on the argument before him of the appeals.

There was apparently no objection before the District Judge to the amount of the taxable profits for 1934 of the companies appealing to him. Such amounts were not disputed before this Court. It does not appear that any evidence was submitted. After referring to the claims made based on a rate of 11% on $2,333,333.33 producing a levy of $35,000 and the assessment at 212% on the excess of income His Honour states that the appeals to him were :

" " The said mining companies contend that the charges made by the municipality of 212 per centum per annum of all in- come in excess of the said sum of $2,333,333.33 is illegal and contrary to the provisions of the Assessment Act.’’

No other contention on behalf of the mining companies is mentioned. <A fair, if not the only proper, inference is that none was made. That there was no objection before the learned Judge to the tax of 11% under the first part of subsec. (9) of sec. 40 is beyond question.

As each of the companies had annual profits in excess of $10,000, each was liable to taxation under sec. 4 of the Mining Tax Act, R.S.O. 1927, ce. 28, and compellable to pay at least a tax of $35,000 to the municipality. On the statement of the learned Judge not this tax but only that resulting from the levy of 214% on the excess of income over two and a third million dollars was questioned before him. Nothing whatever was considered by the learned Judge but the construction and meaning proper to be placed on certain statutory provisions which he mentions.

While in referring to sec. 120a he expressed a doubt that it was intended to apply to a mining company as the rate of taxation was to be the same as that imposed on real estate which for 1935 was 56.56, the modification of such a rate by the special provision in sec. 40(9)) was not referred to, nor the fact that the directions for the preparation of the roll in sec. 120a had been strictly complied with. ^However,” the learned Judge concludes, ‘‘as I am disposing of the appeals on other grounds it is needless to discuss it (see. 120a) further.’’

Then the respective contentions of the parties are stated.

"‘The appellants (the mining companies) argued that the amount of income tax the mine was liable for was definitely determined and fixed by subsec. 9 of sec. 40 of the Assessment Act; that such income assessment as fixed by the Act was 114% of the annual profit. of the mine up to an amount which yielded $35,000, then a further 1 % of such excess profits were payable. ‘ ‘

“The municipality for the first time since the Amendment Act was passed in 1927, had charged 212% of the excess profits and this the Act did not permit it to do. ‘ ‘

The amount the Lake Shore Co. admitted to be proper in its notice of appeal to the Municipal Court of Revision is based with mathematical precision on the precise contentions stated by the learned Judge to have been made before him on behalf of the mining companies. Adding 1% on the Lake Shore’s excess over $2,333,333.33 or $7,354,769 to $35,000, the result is what the Lake Shore Co. admitted its liability to be upon its original appeal, or $108,547.69.

There was no appeal before either the Court of Revision or the District J udge as to that amount.

For the municipality Mr. Lillico is stated to have argued that no appeal lay from the rating by-law, and that the proper interpretation to be given to. the wording of subsec. (9) permitted the municipality to charge the 212% which it claimed on the profits of each mine in excess of $2,333,333.33. It was thus evident that the one and only question before the Judge for resolution was whether the rate of taxation to be applied in computing the amount of the tax payable by the appellants on the excess of their respective incomes over two and a third million dollars was, as the companies contended, limited to 1% on the excess, or, as the municipality demanded, was 212%. Which contention was right depended, as Mr. Slaght had pointed out, on the proper construction of subsec. (9) of sec. 40 of the Assessment Act and on nothing else except the preparation of the assessment roll which had been duly done by the proper officer. It matters little in my opinion whether the list of the companies appearing on the roll was made by the assessor pursuant to sec. 120a or the general provisions of sec. 24. The list accurately named the three companies and the precise assessable incomes of each. The By-law No. 750 sought to impose a rate of 25 mills or 212% on certain excess amounts which are positively determinable and determined, thus completing what is usually called "‘the assessment’’. Whether the assessment should be based on 212 % did not depend on By-law 750 or on any by-law, but on the statute itself, with the limitations imposed by see. 40(9), especially by the final phrase. All the dispute—all the appeals submitted to the learned District Judge depended on the proper construction of the last few words: ‘‘ When an additional 1% of such excess annual profits shall be payable to the municipality . . . .”

The assessment rolls prepared, the demands made for payment according to the rolls, and the rolls, as confirmed by the Court of Revision, were based on the assumption that what the final words of subsec. (9) authorized was the addition of a rate of 1% to the rate of 114% which afforded $35,000. It is to be remembered that there was no dispute as to the amounts of income. There were excesses of income in each case over the amount which produced the $35,000 and at 112% ; the amount of that excess was in every case known to the uttermost cent. On the appeals to the Court of Revision the Lake Shore Co., as I have stated, admitted its liability on its excess to be based on a rate of "‘one per centum of such excess”. _ That, too, was the contention, the sole contention, of Mr. Slaght on behalf of all the companies before the learned District Judge, and Judge Hayward could not deal, nor did he deal, with any other issue.

I think he was right in allowing the several appeals. In my opinion it was not open to the township, upon a proper construction of subsee. (9), to attempt to impose on the mining companies an assessment based on the addition of the two percentages. The whole of subsec. (9) is a limitation on the rate that would otherwise have been payable under sec. 120a of the Act of 1934. Not farther than so limited could an assessment be imposed. What was to be payable to the municipality? The answer is what the subsection expressly states 1% on the excess over the income producing a tax of $35,000 at 1% on two and a third million dollars. That is what the companies contended and what the learned Judge determined.

I am assuming that under sec. 75 of the Assessment Act appeals properly lay to His Honour. He had in his district the powers of a County Judge—subsec. (g) of sec. 1, of the Act—and an appeal lay to him by the mining companies, as persons assessed, "‘against the decision of the Court of Revision on appeal to the said Court’’.

There is no ground for an appeal from his decision which, properly regarded, does no more than reject the contention on behalf of the township that it was entitled to assess the mining companies at a rate of 212% on certain excesses of their incomes but only, as contended on behalf of the companies, at 1% on such excesses.

The result is plainly that an assessment limited to 1% on the excess of such income in each ease is the proper assessment to which each company is liable. The assessment rolls should be corrected accordingly.

I have not thought it necessary to deal with the question whether prohibition lies in this case, as properly considered, the judgment if appealable at all, is not open to appeal on the grounds stated by the municipality. Costs of the appeal in this Court should be paid by the appellants.

RIDDELL, J.A.:—This is an appeal from the judgment of Mr. Justice Kingstone dismissing a motion by the township for an order prohibiting the respondents from acting under a judgment delivered by His Honour Judge Hayward, Junior Judge of the District of Temiskaming, August 30, 1935, in favour of the respondents, which allowed appeals from the Court of Revision, confirming assessments against the respondents, purporting to be made pursuant to the provisions of the Assessment Act, as amended by the Ontario Statute of 1934, c. 8.

The appeal was argued on both sides with great care and ability; and several questions of considerable importance were raised.

In all but the elemental question of the jurisdiction of the learned District Judge, I do not think we are called upon to decide these questions. In this judgment, I shall assume that an appeal lies to this Court from the decision of Kingstone, J. ; I shall also assume that the proceeding by way of an application for prohibition is regular, and that nothing interferes with our determination of the real question at issue; and as to that, I have no manner of doubt.

The matter before the learned District Judge was clearly within his jurisdiction; and it has been constantly held that an Inferior Court Judge has the same power to make mistakes that we have; and unless an appeal is given, no other Court has any right or power to interfere with his decision, however erroneous it 18 considered to be—it is the Inferior Court Judge to whom and not to another Court that the Legislature has committed the determination of the question. Where the subject-matter before the Judge for decision is within his jurisdiction, then, unless an appeal is given, his decision in final, however much he is considered to have erred in law or in fact.

I would dismiss this appeal with costs, with the declaration that the decision is not to prejudice any proceedings any of the parties is advised to take in the premises.

Since the above was written, I have had the opportunity of reading the judgment of my Lord, the Chief Justice, and I am not to be taken as disagreeing with his conclusion. But, in the view that I take of the case, it is not necessary to express any opinion beyond what I had written.

HENDERSON, J.A.:—This is an appeal from the order of Kingstone, J., refusing an order for prohibition to the respondents, his Honour Judge Hayward, Junior Judge of the District of Temiskaming, Wright-Hargreaves Mines Ltd., Lake Shore Mines Ltd. and the Teck Hughes Gold Mines, Ltd.

The application to Mr. Justice Kingstone was for an order of prohibition to the respondents, prohibiting them from acting under a judgment of his Honour Judge Hayward, dated August 30, 1935, which judgment allowed the appeal of the respondents other than himself, from the judgment of the Court of Revision of the Township of Teck confirming certain assessments against said respondents.

The appeal involves a consideration of certain provisions of the Assessment Act, and as the right of appeal is challenged, also the’ provisions of the Judicature Act, R.S.O. 1927, c. 88, and Rules made thereunder.

The procedure provided by the Assessment Act is for the making of an assessment roll by the assessor of the municipality and for placing thereon those persons liable to assessment, and the property or income of which they are liable to be assessed, together with the value for assessment purposes of such property or the amount of such income. The Act provides for an appeal in the following words:

‘‘72(1). Any person complaining of an error or omission in regard to himself, as having been wrongly inserted in or omitted from the roll, or as having been undercharged or overcharged by the assessor in the roll may personally, or by his agent give notice in writing to the clerk of the municipality (or to the assessment commissioner, if any), that he considers himself aggrieved for any or all of the causes aforesaid, and shall give a name and address where notices can be served by the clerk as hereinafter provided. ‘ ‘

This complaint is to be heard by the Court of Revision of the municipality, and there is also a provision for an appeal to the County Judge from the decision or from any omission, neglect or refusal of the Court of Revision to hear an appeal.

It is clear, in my opinion, that the appeal provided for by these sections is an appeal only from an assessment, and does not confer any right of appeal from the rate of taxation imposed by the municipality.

By ec. 1 of the Statutes of 1934, sec. 8, the Assessment Act is amended by adding there sec. 120a, the various subsections of which provide machinery for a special income tax roll in lieu of the usual method of income assessment which I have referred to, and under these provisions no assessment roll is made for income, and no notice of assessment is given to the taxpayer, but in lieu of that he receives one notice which combines his assessment and tax notice.

Under these provisions the Township of Teck passed a by-law bringing them into effect, and in due course the respondents received notice of their assessment and taxation. They are all in similar form, and that which was sent to the respondent Teck Hughes Gold Mines Ltd. is at p. 30 of the Appeal Book, by which that company was taxed for income upon an assessment of $2,719,857 and upon $2,333,333.33 of this assessment a tax rate of 15 mills was levied, and upon the balance a tax rate of 25 mills was levied, making a total tax of $44,663.10.

The respondents appealed as shown by the document. for the following reasons "‘improper assessment and overcharge’’.

The Court of Revision dismissed the appeal, and the District Judge reversed this finding and allowed the appeal.

The ground upon which an order of prohibition is asked is that the learned District Judge acted without jurisdiction inasmuch as it is said he founded his judgment upon the ground that the rate at which the tax is imposed is improper.

See. 120a(8), provides as follows:—‘A person whose name is entered in the special roll of taxable income shall not be entitled to notice of such entry, but, upon receipt from the collector of demand for payment of the said rate upon the amount for which he is taxable according to said roll, shall have in respect thereto the right to appeal provided in this Act in the case of assessments,’’ ete., and it was argued before us that the right of appeal here given is against the assessment only, and that there was no jurisdiction in the District Judge to make any finding in respect of the rate, but in my opinion this subsection confers a right of appeal different from that conferred by see. 72(1). My construction of this subsection is that the appeal is in respect of the demand for payment of the rate and that the words "‘the right of appeal provided in this Act in the case of assessments’’ described the tribunals to which the appeal lies.

Upon the question of want of jurisdiction in the District Judge, I therefore think it clear that he had jurisdiction.

In argument, the point was taken that there is no appeal from the order of Kingstone, J., which was a Chamber Order.

The Judicature Act, sec. 25, provides an appeal shall lie to a Divisional Court from

"‘(a) any judgment, order or decision of a Judge of the High Court Division in Court, whether at the trial or otherwise ;

"(b) any judgment, order or decision of a Judge in Chambers in regard to a matter of practice or procedure which affects the ultimate rights of any party, and subject to the Rules from any other judgment, order or decision of a Judge in Chambers in regard to a matter of practice or procedure. ‘

The Rules of Practice of 1913 containing Rule 507(1), provided that:—"‘A person affected by an order or judgment pronounced by a Judge in Chambers which finally disposes of the whole or part of the action or matter may appeal therefrom to a Divisional Court without leave. ‘ ‘

This rule, however, does not appear in the present rules, and at this point it would seem that no appeal is provided for in a case such as this. But subsee. (4) of sec. 25 of the Judicature Act provides :—

" " Nothing in this section shall limit the generality of the provisions of subsection 1 of section 11,” and upon looking at sec. 11 we find the following provisions : —

"11(1). The Appellate Division shall exercise that part of the jurisdiction vested in the Supreme Court which, on the 31st day of December, 1912, was vested in the Court of Appeal and in the Divisional Courts of the High Court, and such jurisdiction shall be exercised by a Divisional Court. of the Appellate Division, and in the name of-the Supreme Court.”

Jo determine, therefore, whether or not a right of appeal exists, an examination is necessary of the jurisdiction of the Courts mentioned on December 31, 1912. In the view I take of this matter it is unnecessary to fur ther discuss this question.

We are not concerned as to whether the conclusioris of the learned District Judge are right or wrong, but only with the question of his jurisdiction, because under subsec. (8) of sec. 120a of the Assessment Act, there is no appeal from his decision.

The learned District Judge discussed the view that the provisions of sec. 1204 are not applicable to the taxation for income of mines, but does not base any conclusion upon it. It is manifest that there are grave difficulties at least in applying the section in question, in view of its provisions that where its machinery is adopted the rate to be imposed is the rate imposed on real estate for the current or preceding year, and this is impossible in view of the special provisions of the Assessment Act and the Mines Act respecting income taxation upon mines.

The result is that this appeal must be dismissed with costs.

Appeal dismissed.