MACLEAN,
J.:—This
is
an
appeal
from
the
decision
of
the
Minister
of
National
Revenue
affirming
the
assessment,
under
the
Income
War
Tax
Act,
of
certain
income
received
and
accumulated
under
and
subject
to
the
terms
of
an
indenture,
dated
May
27,
1918,
and
made
between
Peter
Birtwistle
(hereafter
referred
to
as
the
Settlor),
a
Canadian
citizen,
then
resident
in
the
City
of
London,
in
the
Province
of
Ontario,
and
The
Trusts
and
Guarantee
Co.
Ltd.
(hereafter
referred
to
as
the
Canadian
Trustee),
a
trust
company
having
its
head
office
in
the
City
of
Toronto,
in
the
same
province.
By
this
indenture
it
was
provided
that
the
principal
of
a
certain
fund,
called
the
Investment
Account,
and
certain
assets
real
and
personal,
mentioned
in
a
schedule
to
the
said
indenture,
should
be
transferred
in
trust
to
the
Canadian
Trustee
by
the
Settlor,
and
that
the
same,
with
any
proceeds
therefrom,
and
with
any
accruals
thereto,
should,
save
as
to
certain
disbursements
therein
provided
for,
be
invested
and
reinvested,
administered
and
managed,
by
the
Canadian
Trustee,
and
that
at
the
expiration
of
twenty-one
years
after
the
death
of
the
Settlor,
the
whole
of
the
fund,
and
the
proceeds
of
the
assets,
real
and
personal
so
transferred,
together
with
accumulations
thereon,
should
be
paid
to
the
Municipal
Council
of
the
Town
of
Colne,
in
Lancashire,
England
(hereafter
referred
to
as
the
Colne
Trustee),
to
be
used
by
the
Colne
Trustee
‘‘for
the
benefit
of
the
aged
and
deserving
poor
of
the
said
Town
of
Colne
in
such
manner
and
without
restriction
of
any
kind
as
shall
be
deemed
prudent
to
the
said
Council.’’
The
indenture
provided
that
the
real
and
personal
assets
transferred
by
the
Settlor
should
be
converted
into
money,
under
the
terms
and
conditions
and
at
the
time
or
times
therein
provided,
and
added
to
the
Investment
Account,
and
I
understand
this
has
already
been
done.
The
Settlor
died
on
April
19,
1927.
The
corpus
of
the
Investment
Account,
ultimately
to
be
paid
to
and
administered
by
the
Colne
Trustee,
is
estimated
to
reach
the
sum
of
one
million
dollars
and
over,
at
the
end
of
the
twenty-one
year
period,
April,
1948.
It
may
be
desirable
to
explain
more
fully
the
origin
of
the
trust
in
question.
On
September
20,
1916,
the
Settlor
paid
over
to
the
Canadian
Trustee,
subject
to
the
terms
and
conditions
contained
in
an
agreement
of
the
same
date,
the
sum
of
$100,000,
and
by
indenture
of
even
date
did
transfer
to
the
said
Trustee
further
assets,
real
and
personal,
by
it
to
be
converted
into
money
and
the
proceeds
thereof
added
from
time
to
time
to
the
said
fund
of
$100,000.
In
this
agreement
the
Settlor
was
called
‘‘the
Investor,’’
and
the
agreement
was
known
as
an
“Investment
Agreement.
‘
‘
That
agreement
was
revoked
and
superseded
by
another
agreement,
also
known
as
an
“Investment
Agreement,”
made
between
the
same
parties,
and
dated
October
20,
1916,
pursuant
to
which
the
said
fund
of
$100,000
and
all
additions
thereto
made
from
time
to
time,
was
to
be
held
by
the
said
Trustee,
subject
to
the
trusts,
terms
and
conditions,
therein
set
out,
the
said
Trustee
guaranteeing
the
payment
of
the
corpus
of
the
fund
to
such
person,
persons
or
corporation
as
the
Settlor
might
by
will
or
otherwise
appoint,
at
the
period
of
twenty-one
years
after
his
decease,
with
interest
at
a
specified
rate.
Later,
the
Settlor
being
desirous
of
transferring
to
the
said
Trustee
certain
other
assets,
real
and
personal,
to
be
converted
and
administered
by
the
said
Trustee,
and
being
desirous
also
of
determining
definitely
the
corporation
to
which
the
said
assets,
with
the
accruals
thereon,
should
be
paid
at
the
end
of
the
twenty-one
year
period,
another
agreement
was
entered
into
between
the
same
parties,
on
May
27,
1918,
and
it
is
this
agreement
with
which
we
are
here
concerned.
By
the
terms
of
this
agreement
the
Settlor
agreed
to
assign
and
set
over
unto
the
Canadian
Trustee,
its
suecessors
and
assigns,
all
his
right,
title
and
interest,
in
the
assets
held
by
the
said
Trustee
under
the
agreement
of
October
20,
1916,
and
certain
additional
assets,
real
and
personal,
which
the
Settlor
desired
to
make
subject
to
the
terms
of
the
same
agreement,
all
of
which
was
transferred
to
and
received
by
the
Canadian
Trustee
as
"
"
Trustee
of
Birtwistle
Trust.
‘
‘
The
terms
and
conditions
of
this
agreement
need
not
be
mentioned,
with
the
exception
of
one
paragraph,
as
all
other
terms
of
that
trust
instrument
were
stated
by
counsel
not
to
be
relevant
to
the
controversy
here.
And
there
is
no
dispute
apparently
as
to
the
amount
of
the
yearly
income,
the
assessment
of
which
is
here
questioned.
If
the
amount
of
the
income
is
questioned
that
may
be
the
subject
of
a
reference,
if
ultimately
it
is
held
that
the
appellant
is
liable
for
the
tax.
Paragraph
4
(b)
of
the
agreement
is
the
important
one
here,
and
it
reads
as
follows
:—
4,
(b)
The
Trustee
shall
pay
the
whole
of
the
Investment
Account,
together
with
accumulations
thereon,
to
the
Municipal
Council
of
the
Town
of
Colne
in
Lancashire,
England,
at
the
end
of
the
period
of
twenty-one
years
after
the
death
of
the
Settlor,
to
be
used
by
the
said
Council
for
the
benefit
of
the
aged
and
deserving
poor
of
the
said
Town
of
Colne
in
such
manner
and
without
restriction
of
any
kind,
as
shall
be
deemed
prudent
to
the
said
Council,
save
and
except
and
the
Settlor
hereby
declares
it
to
be
his
wish
that
the
said
Council
should
insofar
as
possible
or
convenient,
leave
any
of
the
said
fund
which
is
not
required
for
immediate
distribution
to
be
held
by
the
Trustee
hereunder
and
invested
by
the
Trustee
under
an
arrangement
similar
to
that
comprised
in
this
Indenture,
the
Settlor
believing
that
it
will
be
advantageous
for
the
Council
to
retain
this
colonial
investment
which
the
Settlor
considers
likely
to
return
a
better
rate
of
interest
than
can
be
readily
obtained
in
England.
The
assessments
in
question,
for
the
years
1919
to
1934
inclusive,
were
made
under
s.
11,
ss.
(2)
of
the
Income
War
Tax
Act,
Chapter
27
of
the
Revised
Statutes
of
Canada,
1927,
as
amended
by
sections
7
and
8
of
Chapter
55
of
the
Statutes
of
Canada,
1934.
That
subsection
reads
as
follows
:—.
11.
(2)
Income
accumulating
in
trust
for
the
benefit
of
unascertained
persons,
or
of
persons
with
contingent
interests
shall
be
taxable
in
the
hands
of
the
trustee
or
other
like
person
acting
in
a
fiduciary
capacity,
as
if
such
income
were
the
income
of
a
person
other
than
a
corporation,
provided
that
he
shall
not
be
entitled
to
the
exemptions
provided
by
paragraphs
(c),
(d),
(e)
and
(i)
of
subsection
one
of
section
five
of
this
Act.
Sec.
4
of
the
Act
defines
incomes
that
are
not
liable
to
taxation,
and
ss.
(e)
reads:
(e)
The
income
of
any
religious,
charitable,
agricultural
and
educational
institution,
board
of
trade
and
chamber
of
commerce
.
.
.
It
is
the
words
‘‘charitable
.
.
.
institution’’
that
are
of
importance
here.
It
is
the
contention
of
the
appellant
that
the
income
in
question
is
being
accumulated
for
the
benefit
of
the
Colne
Trustee,
or
for
the
Colne
Trust,
and
is
not
taxable
under
ss.
2
of
s.
11
of
the
Act,
or
otherwise,
because
it
is
not
being
accumulated
for
the
benefit
of
any
person
or
persons
wthin
the
meaning
of
the
Act,
or
for
the
benefit
of
unascertained
persons
within
the
meaning
of
the
Act,
or
for
the
benefit
of
persons
resident
in
Canada
within
the
meaning
of
the
Act;
that
neither
the
Colne
Trustee
nor
the
Colne
Trust,
nor
any
beneficiary
of
the
Colne
Trust
has
or
have
received
any
of
the
income
in
question;
and
that
the
Canadian
Trust
and
the
Colne
Trust
are
both
charitable
institutions
and
as
such
excepted
from
taxation.
Alternatively,
it
was
pleaded
that
if
the
respondent
contended
that
the
income
in
question
should
be
considered
as
being
accumulated
for
the
benefit
of
the
beneficiaries
of
the
Colne
Trust,
namely,
the
aged
and
deserving
poor
of
the
Town
of
Colne,
the
income
was
not
taxable
in
the
hands
of
the
Canadian
Trustee
because
the
said
beneficiaries
are
not
beneficiaries
of
the
Canadian
Trust,
and
have
no
interest
therein;
that
the
income
is
not
taxable
because
the
said
beneficiaries
are
not
unascertained
persons
within
the
meaning
of
the
Act,
and
none
of
them
could
become
liable
to
taxation
in
Canada
in
respect
of
any
sum
or
sums
received
out
of
the
fund
as
being
resident
in
Canada,
or
as
receiving
taxable
income
in
Canada
or
elsewhere;
and
that
if
the
said
income
or
any
part
thereof
is
held
to
be
taxable
under
the
Act,
interest
should
be
allowed
only
in
respect
of
such
tax,
additional
tax
and
surtax,
as
is
allowed
from
February
21,
1936,
the
date
when
first
the
assessments
in
question
were
made.
All
these
contentions
are
contested
by
the
respondent.
What
I
have
referred
to
above
as
the
‘‘Canadian
Trust’’
is
the
trust
in
question
being
administered
in
Canada
by
the
Canadian
Trustee.
The
case
is
rather
an
unusual
one.
The
income
here
is
accumulating
for
the
benefit
of
a
class,
of
the
Town
of
Colne,
the
members
of
units
of
which
are
presently
unascertainable
and
will
always
be
fluctuating
;
in
that
class
the
trust
estate
can
never
be
vested,
and
they
can
never
discharge
the
trustee;
the
in-
dividuals
of
that
class
may
never
be
the
recipients
of
any
portion
of
the
accumulated
fund
and
any
benefits
received
therefrom
may
be
indirect
only
;
and
the
interest
of
that
class,
in
any
event,
will
never
be
more
than
an
equitable
interest,
that
is,
the
right
to
enforce
in
equity
the
specific
execution
of
the
Settlor’s
intention,
to
the
extent
of
the
particular
interest
of
the
beneficiaries
therein,
which
interest
may
be
distributed
in
one
of
many
forms.
The
income
is
not
accumulating
for
the
benefit
of
the
Town
of
Colne.
There
is
little
or
no
authority
to
assist
one
upon
the
major
points
in
issue;
most
of
the
authorities
to
which
I
was
referred
by
counsel,
or
those
which
my
own
researches
have
discovered,
are
based
upon
the
particular
language
of
other
statutes,
and
argument
by
analogy
is
unsafe,
particularly
where
taxing
statutes
are
involved.
After
giving
a
most
anxious
consideration
to
the
construction
of
s.
11,
ss.
(2),
I
am
unable
to
reach
any
other
conclusion
than
that
the
income
in
question
is
taxable.
I
think
the
word
""trust”
must
be
construed
widely
enough
to
embrace
a
charitable
trust,
and
no
exception
is
made
in
favour
of
charitable
trusts.
The
persons
who
may
in
the
future
become
beneficiaries
of
the
trust
are
certainly
unascertained,
and
any
interest
of
persons
in
the
trust
fund
is,
and
must
be,
a
contingent
one.
In
the
last
analysis
the
beneficiaries
of
the
trust
are
persons,
and
it
matters
not,
I
think,
that
they
fall
within
the
class
described
by
the
Settlor.
The
beneficiaries
of
charitable
trusts
are
usually
a
class
of
unascertained
persons,
and
as
the
income
of
such
trusts,
when
accumulating,
is
not
exempted
from
the
tax,
it
is
to
be
presumed
that
the
legislature
had
not
in
mind
any
distinction
between
the
beneficiaries
of
charitable
trusts
and
any
other
trust
where
income
was
accumulating
for
unascertained
persons,
or
persons
with
contingent
interest.
If
I
am
correct
in
this
there
is
not
much
more
that
can
be
usefully
added.
The
contention
that
there
is
more
than
one
trust
is,
in
my
opinion,
untenable.
There
is
but
one
trust,
with
two
trustees,
and
the
trust
fund,
as
conceived
and
formulated
by
the
Settlor,
is
being
administered
by
the
Canadian
Trustee,
in
Canada,
where
it
must
remain
until
1948,
and
where
I
think
the
income
is
taxable.
Sec.
4
(e)
provides
that
the
income
of
any
charitable
institution
shall
not
be
liable
to
the
tax.
A
charitable
institution
is,
I
think,
an
organization
created
for
the
promotion
of
some
public
object,
of
a
charitable
nature,
and
functioning
as
such,
and
I
do
not
think
it
can
be
said
that
either
the
Canadian
Trustee
or
the
Colne
Trustee,
or
the
Town
of
Colne,
or
the
trust
fund
itself,
fall
within
that
definition.
A
charitable
institution
is,
I
think,
clearly
distinguishable
from
a
charity,
or
a
charitable
trust.
The
trust
instrument
here
does
not
purport
to
create
a
charitable
institution;
its
purpose
is
to
set
up
a
charitable
trust.
In
any
event
the
income
in
question
here
cannot,
I
think,
be
construed
as
the
income
of
a
charitable
institution.
The
income
which
is
here
accumulating
is
not,
in
the
true
sense
of
the
word,
the
income
of
a
charitable
institution
within
the
meaning
of
the
Act;
such
income
if
belonging
to
a
charitable
institution
would
be
something
to
which
it
had
the
right
to
present
enjoyment.
There
is
no
charitable
institution
which
can
claim
the
income
here.
The
Australian
case
In
Re
the
Will
of
MacGregor,
Deceased
(1917)
24
Argus
L.R.
17,
might
usefully
be
referred
to.
A
question
arises
as
to
whether
the
appellant
is
liable
for
interest
upon
the
tax,
prior
to
the
assessment.
It
appears
that
annual
returns
of
income
were
made
by
the
Canadian
Trustee
on
behalf
of
the
‘‘Peter
Birtwistle
Trust,”
beginning
with
the
year
1919.
The
first
assessment
seems
to
have
been
made
in
1936,
for
the
years
1919
to
1934
inclusive,
and
that
apparently
was
the
consequence
of
an
application
made
in
the
Supreme
Court
of
Ontario
by
the
Colne
Trustee,
but
that
application,
and
the
decision
of
Rose,
C.J.,
thereon,
[1935]
O.R.
433,
4
D.L.R.
137,
has
nothing
to
do
with
the
issue
here,
and
no
purpose
would
be
served
by
any
discussion
of
it.
Sections
48,
49
and
54
of
the
Act
provide
for
the
imposition
of
interest,
if
the
tax
is
not
wholly
paid
at
maturity.
S.
55
provides
for
the
continuation
of
liability
for
any
tax
where
no
assessment
has
been
made.
It
is
as
follows
:—
..
if
no
assessment
has
been
made,
the
taxpayer
shall
continue
to
be
liable
for
any
tax
and
to
be
assessed
therefor
and
the
Minister
may
at
any
time
assess,
reassess
or
make
additional
assessments
upon
any
person
for
tax,
with
interest
and
penalties.
It
is
the
assessment
made
by
the
Minister
under
the
powers
granted
by
that
section,
that
is
here
in
question.
Then
s.
66
provides
as
follows
:—
Subject
to
the
provisions
of
this
Act,
the
Exchequer
Court
shall
have
jurisdiction
to
hear
and
determine
all
questions
that
may
arise
in
connection
with
any
assessment
made
under
this
Act
and
in
delivering
judgment
may
make
any
order
as
to
payment
of
any
tax,
interest
or
penalty
or
as
to
costs
as
to
the
said
Court
may
seem
just
and
proper.
The
submission
made
on
behalf
of
the
appellant
was
that
as
the
terms
of
the
Act
in
respect
of
the
filing
of
returns
of
income
were
duly
complied
with,
that
it
would
be
right
and
proper
if
the
appeal
is
dismissed,
to
relieve
the
appellant
of
any
interest
charges,
for
the
years
prior
to
the
assessments
in
question,
and
that
it
was
within
the
discretion
of
the
Court
so
to
do
by
virtue
of
s.
66.
The
language
of
the
latter
part
of
that
section
is
extremely
awkward
and
confusing,
whatever
was
intended.
It
is
arguable
that
the
section
is
open
to
the
construction
that
the
Court
might,
in
the
exercise
of
its
discretion,
refuse
any
claim
for
interest
if
it
were
thought
right
and
proper
to
do
so,
by
reason
of
any
special
circumstances
appearing
in
the
case.
On
the
other
hand,
s.
55
expressly
provides
for
preserving
any
liability
to
the
tax,
and
to
interest
and
penalties,
if
for
any
reason
no
assessment
has
been
made.
The
imposition
of
interest
in
respect
of
any
tax
not
paid
when
due,
seems
to
be
a
definite
principle
of
the
Act,
and
therefore
indiscriminately
to
be
applied,
so
unless
there
is
very
clearly
vested
in
the
Court
a
discretion
to
relieve
the
taxpayer
of
interest
charges,
and
that
in
the
circumstances
of
the
case
it
is
right
and
proper
so
to
do,
I
think
the
taxpayer
must
be
held
liable
for
the
statutory
interest,
in
addition
to
the
tax.
Whether
the
words
of
the
latter
portion
of
s.
66
are
to
be
treated
as
mere
surplusage,
or
as
the
bestowal
of
a
discretion
in
the
Court
is
a
question
not
altogether
free
of
difficulty.
It
is,
however,
difficult
to
believe
that
the
section
was
intended
to
mean,
for
example,
that
liability
for
payment
of
the
"‘tax’’
was
to
be
a
matter
in
the
discretion
of
the
Court,
and
not
something
to
be
determined
wholly
according
to
the
provisions
of
the
statute.
It
is
difficult
also
to
understand
why
it
was
necessary
to
say
that
the
matter
of
costs
was
within
the
discretion
of
the
Court;
as
an
exception
to
the
rule
the
Customs
Act
provides
that,
in
suits
brought
under
that
Act
for
penalties,
or
to
enforce
any
forfeiture,
if
the
Crown
succeeds
he
shall
be
entitled
also
to
recover
full
costs
of
suit.
I
am
inclined
to
the
view
that
this
section
is
not
to
be
construed
as
vesting
a
discretionary
power
in
the
Court
to
forego
interest
on
any
tax
recovered
by
a
judgment
of
the
Court,
though
conceivably
it
might
be
a
right
and
proper
thing
to
do
in
many
eases.
Presently,
I
do
not
feel
warranted
in
holding
that
the
appellant,
whom
I
find
liable
for
the
tax,
should
escape
the
interest
charges
imposed
by
statute
upon
any
unpaid
tax.
It
may
be
that
the
Minister
has
power
to
do
so.
The
appeal
is
therefore
dismissed.
This
is
a
case
where,
I
think,
in
all
the
circumstances
there
should
be
no
order
as
to
costs.
Judgment
accordingly.
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