In Re the Winnipeg Charter, City of Winnipeg v. T. Eaton Company Limited, [1944] CTC 128

DENNISTOUN, J.A. (dissenting) :—This is an appeal from a judgment of Major, J., in the Court of King’s Bench [1943] 3 W.W.R. 305. The City of Winnipeg is the appellant. A ease has been stated by the Board of Revision on the application of, and with the approval of, counsel for the city and the company.

There are in fact three appeals, which have been argued together and are covered by the judgment appealed from. They concern the business tax of the T. Eaton Company for the years 1937, 1938 and 1939. These three cases are still pending before the Board of Revision, awaiting the decision of this Court on the points raised in the stated ease.

The practice is that the Assessment Commissioner for the city makes the initial assessment. This has been done, and the company has appealed to the Board for a revision.

The fixing on the business assessment of the T. Eaton Company has been before the Courts since 1935. In that year Taylor, J., in the Court of King’s Bench, on appeal from the board, fixed the annual rental value of the premises, which is the basis of the tax, at $767,145. In 1941, McPherson, C.J.K.B., on appeal to him, fixed the 1936 annual rental value at $811,200. In 1937 the assessment (now under appeal) is $905,000, of which $705,000 appertains to the department store building. In 1938 the assessment (now under appeal) is $1,234,200, of which $705,000 is for the retail store. In 1939 the assessment (now under appeal) is $1,029,000, of which $724,000 is for the retail store. I find these figures in the affidavits of H. P. Crabb, who made the assessments as a member of the assessment board, and in statements handed to the Court during the hearing of the appeal.

Nothing turns, on this appeal, upon the accuracy of these figures, but their magnitude is worthy of note.

The Eaton Company premises in Winnipeg cover nearly four city squares. The principal building is what is referred to as the departmental store building, and it is in respect to this building that the controversy as to the amount of the assessment has arisen. The mail order building, the power house, the garage, and the warehouses, are all adjuncts of the department store and contribute to the business which culminates therein. They are assessed separately.

The statute law covering assessment and taxes in the city is to be found in The Winnipeg Charter, 1918, ch. 120, and a revised edition thereof in 1940, ch. 81. The Charter of 1940 may be looked at for the law governing these appeals, for amendments made in 1937, the date of the first appeal, are incorporated in it. The ‘‘business tax’’ in Winnipeg is ascertained by fixing the.‘‘annual rental value” of the premises occupied by the taxpayer. This constitutes the ‘‘assessment,’’ to which is applied a percentage applicable to the particular class of business dealt with. The result is the amount of tax to be levied.

The question propounded by the stated case now under consideration is not the amount of the assessment, as was the case when the 1935 and 1936 appeals were dealt with by the Judges of the King’s Bench, for the assessments for 1937, 1938 and 1939 have never been fixed by the board. The sole question now before us is: What is relevant and compellable evidence upon which the board can base the assessment?

The assessor, H. P. Crabb, admits in his affidavit that he fixed the annual rental value of the T. Eaton Company departmental store building solely upon the gross sales or gross turnover of goods for the years in question. From researches which he made, and estimates which he formed, he fixed the gross turnover of the retail store at the following amounts :

1935 — $20,296,000.

1936 — 21,916,000. 1937 — 23,786,000. 1938 — 23,702,000. 1939 — 23,870,000.

Based on similar estimates, he holds ‘‘that the annual rental value of premises occupied by retail merchants operating departmental or variety stores is from 314 to 412 per cent of the gross turnover of such merchants in their complete undertaking. ‘ ‘

Against the assessments based on this speculative rule-of- thumb the company has appealed, and the board must deal on the merits with those appeals when the time comes.

It is admitted by everybody that the amount of business which can be done is some evidence of the rental value of the premises, but the company take the stand that to make that the sole test of ‘‘rental value’’ is unsound, and they will urge their view with great force when the appeals come to be heard.

In order to establish if possible the speculative figures of the assessor, the city has demanded production of the company’s books and records showing or recording the gross sales for the year 1936, and following years, for the retail store and each department thereof, also the gross sales of the mail order business and other auxiliary producing departments, in fact, a statement of the turnover of the company in all the varied activities which are carried on in the premises, in order to enable the assessor to have reliable information instead of the speculative figures on which the present assessments are based.

Counsel for the city insist very emphatically that they have no desire to pry into the company’s profits; all they ask is evidence of the volume of trade which can be, and is, carried on in the premises assessed. Counsel for the city do not take the extreme position of the assessor that a percentage of the turnover will accurately fix the annual rental value of the premises, but they say it is a factor, and a very important one when taken into consideration with other factors, in estimating the capacity and facilities of the premises for handling goods and merchandise. In this I agree with them. I think a prospective tenant would be greatly influenced in fixing the rental value if he knew the volume of business which the stores, departments, elevators, garages, power plants and warehouses, were capable of handling or turning over in a year, and could thereby measure the lay-out, the scope, and the capacity of the premises. If the premises being assessed were a manufacturing plant—say a flour mill—evidence as to the number of barrels of flour it could produce in a day would be relevant, and the best evidence would come from the operator of the mill, based on the output of flour which he was able to make.

I am of opinion that evidence of turnover is relevant to the inquiry, as held in England, and it is now necessary to determine if it is compellable. This is a question not of fact, but of law.

It is stated that Manitoba is the only field of municipal jurisdiction in Canada, or the United States, in which annual rental value is made the basis of assessment for a business tax, and that there are no cases available except those found in the English reports, to which reference must be made.

In England, annual rental value is dealt with in many cases to which we have been referred. Many of these cases deal with the assessment of publie houses—a class of business which provides opportunity for comparison with properties similarly situated. It has been settled that evidence of the amount of business done is relevant, but that no machinery exists under English statute law to make it compellable. It is therefore permitted to show by extrinsic evidence the amount of business done, but it is held that the publican cannot be compelled to produce and exhibit his books to the taxing authority.

In Manitoba, on the other hand, The Winnipeg Charter— which is a public statute passed by a Legislature which has sovereign jurisdiction over municipal taxation—makes provision for a demand for information on all matters relevant to the fixing of the assessment, and makes the giving of that information compellable by providing that upon failure to produce it the appeal may be dismissed.

The Winnipeg Charter of 1940, see. 323(1), and the Charter of 1918, sec. 336(d) (amended in 1937, ch. 91) contain a provision for the issue and service of a notice to give evidence and produce books and papers relating to the matters in question in any appeal, or such thereof as may be specifically mentioned. The party served who, without just excuse, fails to attend at the time and place specified in the notice, or who refuses to give information or produce documents as required, shall be liable to a fine of not more than $100 and, if he be the applicant or his agent, to have his appeal dismissed. The notice which was served under this section is too long to be set out here, and in my opinion is far’in excess of what the Charter authorizes.

Mr. Williams, in his argument, stated that the city does not now ask for a roving commission to go through all the books and records of the company. The city on this appeal limits its demand to evidence as to gross sales and turnover relevant to the appeal to the board. Mr. Williams expressly disclaims the right to extort information which might disclose the profits or losses of the company.

In order to protect the company from a prying investigation into all their records, I express the opinion that a return of their gross sales and turnover, duly verified, is all that can be called for. Such information has a direct bearing on the annual rental value of the premises. A disclosure of profits or losses has no bearing on the value of the premises to prospective tenants, for they depend on efficient management and skilful merchandising, or the reverse, and are not related to the character and capacity of the buildings, which are alone the basis of the assessment to be made.

Many English cases have been noted and discussed in the course of the argument before this Court. In Grant v. Knares- borough Urban Council [1928] Ch. 310, 97 L.J. Ch. 106, it was said that trade profits and takings depended largely on the personality of the tenant and did not affect the ratable value of the public house. In Dodds v. South Shields Assessment Committee [1895] 2 Q.B. 133, 64 L.J.Q.B. 508, it was held that where the ordinary evidence of experts can be given to show what is the market value—the letting value—of similar premises in the same town, evidence of the actual occupier’s takings, and of the trade which he does, is admissible; but that in exceptional cases, where it is not possible to compare other premises which are actually let and have a recognized market value, then it is permissible to inquire into trade takings and even profits. But in Cartwright v. Sculcoates Union [1900] A.C. 150, 69 L.J.Q.B. 403, the House of Lords held that while those inquiries are permissible in most—if not in all—cases, the occupier cannot be compelled to give the information unless he so desires.

There are no rented premises in the city of Winnipeg with which the Eaton premises can be compared. The assessment must be made chiefly from a consideration of the premises themselves and the business which can be done.

In the Cartwright case, supra, Lord Morris, at p. 155, said:

"‘There is no force put on a publican to produce his books; he is not in this inquisition threatened with the screw, and if he chooses not to bring forward his books he need not do so, and the arbitrator is then obliged to forage about for the purpose of ascertaining in the best way he can under those circumstances what the profits would be.’

In other words, while evidence of turnover is held relevant in England, it is also held not compellable, for there is no machinery to enforce production. Mr. Williams frankly admits this but points to see. 323(1) of the Charter, 1940, which applies the screw to the taxpayer with extreme severity when it says that if he does not give the required information his appeal will be dismissed. See also sees. 334 and 336 of the 1918 Charter, which provide for summary conviction and fine.

Among other cases referred to on the argument which have been read with interest are: Clark v. Fisherton-Angar Overseers (1880), 6 Q.B.D. 139, 50 L.J.M.C. 33; Mersey Docks and Harbour Bd. v. Birkenhead Union [1901] A.C. 175, 70 L.J.K.B. 584; Barking Rating Authority v. Central Electricity Board [1940] 2 K.B. 493, 109 L.J.K.B. 778; Racecourse Betting Control Board v. Brighton Rating Authority [1942] 2 K.B. 90, 111 L.J.K.B. 542; Bell Property Trust v. Hampstead Assessment Commn. [1940] 2 K.B. 543, 109 L.J.K.B. 792, [1940] 3 All E.R. 641.

Reference is also made to the following cases: City Dairy v. Winnipeg [1937] 2 W.W.R. 44, 45 Man. R. 130; National Trust v. Winnipeg [1937] 2 W.W.R. 90, 45 Man. R. 261; W. S. Newton c Co. v. Winnipeg [1937] 2 W.W.R. 351, 45 Man. R. 258; and Falcon Oils Ltd. v. Winnipeg [1936] 1 W.W.R. 305, 43 Man. R. 557.

A full disquisition on English rating law will be found in Ryde on Rating, 6th ed., pp. 182 et seq., and in 27 Halsloury, pp. 251 ef seq.

Reading together the English cases and The Winnipeg Charter, 1940, I hold that the company should produce to the Board of Revision, and to the city assessor, a statement, duly verified, showing the annual gross sales and turnover in bulk, as evidence of the capacity and suitability of their premises for carrying on the business of a. general department store; but that the city is not authorized to make an inquisitorial investigation of the company’s books and records which might lead to the making of a computation on profits made or losses incurred.

This is not an income tax; it is a rental only.

I would amend the answers given by Major, J. in the negative by substituting the answer: ‘‘Yes, as to gross sales and turnover only.’’

TRUEMAN, J.A.:—This is an appeal by the Winnipeg Board of Revision from the judgment of Major, J., in the King’s Bench (11943] 3 W.W.R. 305) in a stated case with respect to the city’s Charter in relation to assessments in said years to the company by the assessment board.

The stated case is as follows :

“1. The T. Eaton Company, Limited, was incorporated by Letters Patent issued under the provisions of the Companies Act of the Province of Ontario in 1891 with the following purposes and objects:

‘To purchase and sell dry goods, to purchase, manufacture and sell goods and merchandise generally under the name of The T. Eaton Company Limited,’

‘‘and the said Company under the Ontario Companies Act at all material times possessed and now possesses, as incidental and ancillary to its other powers, power to:

“ ‘Carry on any other business, whether manufacturing or otherwise, capable of being conveniently carried on in connection with its business or calculated directly or indirectly to enhance the value of or render profitable any of the Company’s property or rights.’

“The Company was in the year 1905 duly licensed to do business in Manitoba and has continuously carried on business in Manitoba under such Charter, powers and license down to the present time and is still doing so.

“2. In the year 1938 and for many years prior thereto the Company carried on, in the City of Winnipeg, the business of a retail merchant, operated a departmental store, and also carried on in and from Winnipeg, in buildings separate from its departmental store buildings, the business of selling goods and merchandise by mail order and the Company also maintained in separate buildings a Stable, a Garage, a Power House, a Delivery Building, and a Warehouse, all of which are hereafter specially referred to.

"‘3. The City of Winnipeg was incorporated in the year 1873 by a Statute of the Province of Manitoba entitled ‘The Winnipeg Charter.’ The Charter in force in the year 1938 and at the times material hereto was The Winnipeg Charter, 1918, as amended up to and including the Statute of 1938.”

(In and by the said Winnipeg Charter, 1918, ch. 120 of the statutes of that year, it was enacted by sec. 281 that :

(i Every person who, and every firm, partnership, company, or corporate body that carries on business in any way in the city . . . as merchant . . . shall be assessed for a sum equal to the annual rental value of the premises . . . which he occupies . . . and to the end and intent that all persons, firms and corporations . . . shall be liable to assessment for a sum equivalent to the annual rental value of the premises so occupied. The assessment made under this section shall be known as ‘business assessment,’ and the tax levied on this assessment shall be known a ‘business tax’.”

Sec. 283 provides that every occupant of any building liable to taxation as set forth in this Act shall be liable for such assessment although he be the owner of the premises and liable as the owner of the land and buildings. )

"4. In the year 1935, by Chapter 93 of the Statutes of Manitoba, 1985, The Winnipeg Charter, 1918, was amended to direct that for the purpose of levying a Business Tax in the City of Winnipeg the Assessment Commissioner should classify, in accordance with the classifications in the said Statute set out, the business of each [person, firm, partnership] corporation or company carrying on business in any way in the City according to the principal trade, business, profession, or calling carried on by such corporation or company, and that each corporation or company should pay to the City a Business Tax based on the annual rental value of the premises occupied and at the rate per centum of the amount of business assessment for each such class thereof as shown on the Business Assessment Roll. Different classes of business were set out in the Statute under different letters. In 1936 The Winnipeg Charter, 1918, as amended was further amended by Chapter 92 of the Statutes of the Province of Manitoba by striking out the classifications and rates appearing in the Statute of 1935 and substituting the classifications and rates set out in the Statute of 1936. In 1937 The Winnipeg Charter, 1918, as amended by the Statutes of 1935 and 1936, was further amended, by increasing the rates of business tax, by Chapter 71 of the Statutes of Manitoba, 1938, which came into force on theldth day of March, 1938. All of the provisions of the said Charter and Amendments and any other provisions in the said Charter or Amendments relating to Business Tax and assessment to Business Tax may be referred to by the City or by The T. Eaton Co., Limited.

"‘5. In the year 1938 the Assessment Commissioner classified the business of the Company and the Company was assessed for Buiness Tax in five separate assessments as follows:

"‘A. Business assessment for 1938 in respect of the T. Eaton Company Limited, Portage Avenue, Department Store, on an annual rental value of $705,000, Roll No. 6986, Class M, rate

14%2%.‘

" " Class M, as set out in the said Charter, as amended by the 1938 Statute, is as follows :

‘M. Retail merchant operating Departmental Store or Variety Store : 141%. ‘

"‘This department store fronts upon Portage Avenue, Winnipeg, and is located upon the block of land bounded on the north by Portage Avenue, on the west by Hargrave Street, on the south by Graham Avenue, and on the east by Donald Street, upon which is erected a building (nine floors and basement), commonly referred to as the Retail or Department Store Building, and certain other smaller buildings. It also includes two buildings on the east side of Hargrave Street between Graham Avenue and St. Mary Avenue, one commonly called the Suburban Delivery Building, and the other the Stable, in which it housed horses used in the delivery of goods to customers.

‘B. Business assessment for 1938 in respect of the T. Eaton Company Limited Mail Order Buildings, Donald Street, Winnipeg, on an annual rental value of $824,000, Roll No. 1164, Class O, rate 10%.’

"'Class O, as set out in the said Charter, as amended by the 1938 Statute, includes a number of different classes of business, among them the following :

" 'Mail Order Business—10%.’

"The mail order buildings front on Donald Street, Winnipeg, are located upon the block of land bounded on the north by Graham Avenue, on the west by Hargrave Street, on the south by St. Mary Avenue and on the east by Donald Street, upon which were erected two buildings (9 floors and basement) attached and operated as one building and commonly known as the Mail Order building, and principally used for the purpose of carrying on its Mail Order business covering the Yukon Territory and the Provinces of British Columbia, Alberta, Saskatchewan and Manitoba and the westerly part of the Province of Ontario.

"‘C. Business assessment for 1938 in respect of the T. Eaton Company Limited Garage, north-east corner of Graham Avenue and Carlton Street, Winnipeg, on an annual rental value of $13,200, Roll No. 2007, Class B-4, rate 10%.’

"‘Class B-4, as set out in the said Charter, as amended by the 1938 Statute, covers a number of different classes of business, among them the following:

‘* 'Proprietor, conductor or producer of Auto storage, Storage Garage, Assessment $2,001.00 and over: 10%.’

“This garage building is a four storey building fronting on Graham Avenue and close to the Department Store building and the Mail Order buildings. This building was and is maintained to house, service and repair motor vehicles used by the Company and to house, service and repair motor vehicles, the property of its employees, and the third and fourth storeys of such building were used for a carpentry and paint shop, respectively. The said building was and is used in part in connection with its Departmental Store business and in part in connection with its Mail Order business.

"‘D. Business assessment for 1938 in respect of the T. Eaton Company Limited Power House, Hargrave Street, Winnipeg, on an annual rental value of $18,000, Roll No. 2208-1, Class J, rate 12%%.’

"Class J, as set out in the said Charter, as amended by the 1938 Statute, includes among other classes of business the following':

“Heating or power plant generating heat or power for proprietor’s use in other premises: 1212%.'

"This power house building fronts on Hargrave Street, Winnipeg, and is on the northwest corner of Graham Avenue and Hargrave Street close to the Garage Building, which is to the west of it, and diagonally opposite the Departmental Store Building and the Mail Order buildings, and from this Power House the Company supplied and supplies heat to its Departmental Store building and the adjoining smaller buildings, to its Mail Order buildings and to the Garage, and also supplied and supplies to such buildings a portion of the power used in such buildings from power generated, in such Power House. from surplus steam.

'E. Business assessment for 1938 in respect of The T. Eaton Company Limited Furniture Warehouse and Printing Build- ing, Alexander Avenue, Winnipeg, on an annual rental value of $63,000, Roll No. 214, Class O, rate 10%.’

" Class O, as set out in the said Charter, as amended by the 1938 Statute, is the class which includes Mail Order business and the said class also includes the following:

‘Any business similar to that carried on by any of the above in this class 1212%.’

“This warehouse building fronts on Alexander Avenue, Winnipeg, has two storeys and a basement, and occupies practically the whole of the block, bounded on the south by Alexander Avenue, on the west by Lily Street, on the north by Robert Avenue and on the east by the right of way of the Winnipeg Transfer Railway and is a mile or more to the east of the other four properties. In this warehouse the Company at all material times warehoused goods to be used partly in connection with its Departmental Store business and partly in connection with its Mail Order business and also maintained therein a printing plant, chiefly used for the purpose of printing catalogues for its Mail Order business, and also maintained a creamery, the products of which were sold by the Company in its retail business.

^6. The Company appealed from the five assessments referred to in paragraph 5 hereof: to this Board for the following reasons as stated in each of the notices of appeal, namely :

" 6 ‘Such assessment is based on too high an annual rental value. ‘

" ‘ and the said appeals are now pending and this case is stated in connection with the said appeals.

"‘7. The above referred to assessments for Business Tax for the year 1938 were made in the early part of the year 1938.

"‘8. The City of Winnipeg contends and the Company denies that in order to determine the annual rental value of each of the five premises in Appeal, for business assessment for the year 1938, it was essential that the Assessment Commissioner and the Assessors should have the information as to the gross sales of the Company in Winnipeg and the gross turnover of the Company in Winipeg for the year 1937 (the figures for 1938 not being available) set out and referred to in the notice to produce signed by the Chairman of the Board and served by the City on the Company on the 12th day of May, 1942, namely:

"‘1. The books and records of the Company showing or recording :—

‘‘(a) the gross sales in the year 1937 of the Company in Winnipeg ;

“ (b) the gross sales in the year 1937 of the Company’s Winnipeg Retail Store and of each Department thereof ;

"‘(c) the gross sales in the year 1937 of the Company’s Mail Order business carried on at and from Winnipeg and of each Department thereof ;

‘‘(d) the gross turnover in 1937 for sales, services, and goods and materials supplied in the Company’s Winnipeg factories, manufactories and shops, including and without limiting the generality of the foregoing, the work shop, the paint shop, the repair shop, the upholstering shop, the candy factory, the printing plant, the dairy department, and all other similar shop or department where services are rendered or work is done on articles sold or to be sold or to be altered or repaired ;

"‘(e) the gross turnover in 1937 for sales and services and goods and materials supplied in the garage maintained and operated by the Company at Winnipeg, together with the number of vehicles handled, stored or repaired with gross storage and service charges earned or charged and gross sales made.

"‘9. The City of Winnipeg contends and the Company denies that the Assessment Commissioner and the Assessors have power under the provisions of The Winnipeg Charter, 1918, and Amending Acts for the purpose of the business assessment of each of the said five properties to compel the Company to furnish them with the information referred to in paragraph 8.

"10. The City of Winnipeg contends and the Company denies that to permit this Board to determine the matters in question in each of the said five Appeals, namely, the annual rental value of each of the said five premises referred to in paragraph 5 hereof, it is essential that there should be placed before this Board, evidence as to the gross sales and gross turnover of the Company in Winnipeg in the years 1937 and 1988 as set out and referred to in paragraph 8 hereof.

"‘11. The City of Winnipeg contends and the Company denies that this Board has power under the provisions of The Winnipeg Charter, 1918, and Amending Acts and The Winnipeg Charter, 1940, and, Amending Acts to compel the Company on each of the said five appeals to produce the information or the records containing the information referred to in paragraph 8 before this Board so that the same may be placed in evidence by the City, or by the Company, or by the Board, and in the event of the Company failing or refusing to produce the records or information directed by the Board, the Board may dismiss the said Appeals of the Company.

"12. The City of Winnipeg has filed with the Board the affidavits of Charles C. Nicholls, the Younger, and Herbert Philip Crabb, while the Company has filed with the Board the affidavits of J. Elmer Woods and Goodwin Gibson. Copies of these affidavits, with the exhibits thereto, are annexed hereto and are hereby made part of this case pursuant to agreement by Counsel for the Company and for the City.

"‘13. This Board therefore submits, for the opinion of a Judge of the Court of King’s Bench, the following questions:

"‘1. Is the contention of the City of Winnipeg set out in Paragraph 8 hereof well founded in law?

"‘2. Is the contention of the City of Winnipeg set out in Paragraph 9 hereof well founded in law?

"3. Is the contention of the City of Winnipeg set out in Paragraph 10 hereof well founded in law?

"‘4. Is the contention of the City of Winnipeg set out in Paragraph 11 hereof well founded in law?”

Mr. H. P. Crabb, member of the Assessment Board, compiled the assessments in question for business tax for the years 1935 to 1939, inclusive. In an affidavit of July 16, 1942, he states that in his opinion the only satisfactory method by which to arrive at the annual rental value of the premises of the Eaton Company is to ascertain the cash value of the gross sales and services made and rendered by the company during the preceding years, and particularly the year immediately preceding that in which the business assessment was made, and that the cash value of the turnover of the business is a most important factor, if not the most important factor, in arriving at the annual rental value of the buildings. His request to the company to furnish the assessment board with the company’s turnover figures was refused. He states that through other sources of information he estimated the company’s sales and turnover for the years in question. The business tax and rental value of the premises for 1937, 1938 and 1939 herein dealt with by him is shown for the year 1938 (para. 5 of the case, supra). He observes that in the absence of comparable businesses and buildings it is his opinion that a percentage of the company’s turnover, varying from 31 to 412 per cent, provides a true annual rental value of the premises. His assessment for 1935 was approved by the Board of Revision, but on appeal was not sustained by the late Mr. Justice Taylor and the 1934 assessment was restored. The 1936 assessment was appealed before McPherson, C.J.K.B., as he then was. He reduced the assessment considerably.

In 1936 the city applied to amend The Winnipeg Charter, 1918, by adding to see. 315 the following:

"Upon the request of the Assessment Commissioner, every owner, agent or tenant shall furnish him with correct information in such form and for such periods as he shall specify, on all matters within the knowledge of such owner, agent or tenant with regard to rents actually paid as well as rents payable for premises within the City, terms of leases, amounts of annual oross sales or turnover made in any such premises, and such further information as the Assessment Commissioner shall in his opinion require for the purpose of making the assessments required by this Act.”

The amendment was opposed before the law amendments committee of the Legislature by the company and refused by the committee.

Provisions in The Winnipeg Charter make absolute the character and depth of the controversy introduced by Mr. Crabb. The Charter since 1907 to the present time has contained the provisions set out in the stated case. The fundamental clause therein is as follows: ‘‘Every person who, and every firm, partnership, company or corporate body that carries on business in any way in the city . . . shall be assessed for a sum equal to the annual rental value of the premises . . . which he occupies . . . to the end and intent that all persons, firms and corporations . . . shall be liable to assessment for a sum equivalent to the annual rental value of the premises so occupied,” whether by owner or tenant.

The circumstances being what they are, it would seem, with all respect, that the sole problem between the assessment board and the company is one strictly controlled by the reading and construction ot the foregoing words. What has to be appreciated is the full sense and finality of the words ‘‘shall be assessed tor a sum equal to the annual rental value of the premises”—"‘shall be liable to assessment equal to the annual rental value of the premises so occupied.” When it is sought to go outside the annual rental value by merging profits in it that belong elsewhere, an unending confusion is created that leaves the clause without integrity or meaning.

The position of the assessment board naturally is that as the company transacts an enormous business through its retail store, with nine floors, and its mail order block—a huge emporium consisting of 40 or 50 stores—assessment justice requires that the annual rental value shall include a sensible percentage of the profits from business turnover. Those who have knowledge of the suecess of the company will say that it was and is due in an almost exclusive degree to the management given to it by its business builders, in which the annual rental value of the buildings had but a comparative part.

In Mersey Docks and Harbour Board v. Birkenhead Union [1901] A.C. 175, 70 L.J.K.B. 584, the Earl of Halsbury, L.C., said (pp. 179, 180) :

"The thing that the Legislature has called upon the overseers to do is to solve a simple question of fact, and although it may be by no means simple as regards the mode in which they are to arrive at it, the question of fact is simple enough as stated

—that is to say, they are to make the rate ‘upon an estimate of the net annual value of the several hereditaments rated thereunto—that is to say, of the rent at which the same might reasonably be expected to let from year to year

“ . that is the question which they have to answer; and they are to arrive at that value, so far as I know, unfettered by any statute as to the way in which they can do it. I am not aware of any rule of law or any statute which has limited them as to the mode in which they shall arrive at it.’’

In Ryde on Rating, 7th ed., p. 247, it is said :

"On no part of the law of rating has there been more confusion than in dealing with the questions whether profits affect

—and in what way they affect—ratable value. Great part ot the difficulty will disappear if it be remembered that the ascertainment of ratable value depends upon the construction of a statutory definition, and that the precise words of that definition must be the sole criterion.’’

The controlling words in The Winnipeg Char er, 1940, are ‘‘shall be assessed for a sum equal to the annual rental value , of the premises ‘ ‘‘ " shall be liable to assessment for a sum

equivalent to the annual rental value of the premises so occupied.” See see. 291.

An additional item in the ease asks that it be declared that the assessment board is entitled in law to obtain particulars from the company of its gross sales and gross turnover for the year 1937, and to have right of access to the company’s books in respect thereof. Sec. 323(1) of the statutes of 1940, ch. 81, provides that:

‘“The Board may require the attendance of witnesses to give evidence or produce documents (including books and papers of any kind) relating to the matters in question in any such appeal. Any person, whether a party to the appeal or not, who has been served with a notice signed by a member of the board requiring him to attend before the board and produce all documents in his possession or power relating to the matters in question in the appeal, or such thereof as may be specifically mentioned, and who without just excuse fails to attend at the time and place specified in the notice or refuses to give information or produce documents as required, shall be liable to a fine of not more than one hundred dollars and, if he be the appellant or his agent, to have the appeal dismissed.”

In the application of this section it must be borne in mind that, due to the imperative character of the words ‘‘annual rental value,” no information can be demanded that is not within these words in their strictest sense.

In Dodds v. South Shields Assessment Committee [1895] 2 Q.B. 133, at 137, 64 L.J.Q.B. 508, it was decided that in ordinary cases evidence of an occupier’s profits could not be given. In Great Britain, assessment information is compellable by The Rating and Valuation Act, 1925, ch. 90.

I would dismiss the appeal. Costs to the company.

Rosson J.A.:—Three appeals were taken by the City of Winnipeg against a judgment of Major, J. ( [1943] 3 W.W.R. 305) upon three special cases stated by the Board of Revision of the city in the matter of assessment to business tax of the respondent company. The provision for stated cases is to be founded, together with appeal provisions, in secs. 330 to 334 of The Winnipeg Charter, 1940, ch. 81. The years in question are 1937, 1958 and 1939. The year 1937 is the one now being used for the purpose of this reference.

The business assessment provision for 1937 was that contained in the amendment to the Charter made in 1935, ch. 93. By sec. 5, a new sec. 282 was enacted. It reads, down to the schedule of rates, as follows:

"For the purpose of levying a business tax in the City of Winnipeg, the assessment commissioner shall classify in accordance with the classifications hereinafter set forth the business of each person, firm, partnership, corporation or company carrying on business in any way in the city according to the principal trade, business, profession or calling carried on by such person, firm, partnership, corporation or company, and each person, firm, partnership, corporation or company shall pay to the city a business tax based on the annual rental value of the premises occupied, and at the rate per centum of the amount of business assessment for each such class thereof as shown on the business assessment roll; the said classes and the respective rates applicable thereto shall be as follow :??

The schedule is headed: ‘‘Business Classifications and Groups’’ and ‘‘Ratings.’’ An instance is lettered: ‘‘A. Independent Retail Merchants.’’ For these the "ratings” are graduated, 5 per cent to 8 per cent. The categories continue at length. In 1936 (ch. 92) there was extension of categories, with much variation in rating. The assessments for business tax were to be made at least once in each three consecutive years (sec. 284, amended 1935, see. 7).

The present appeal hinges on the meaning of the words "‘annual rental value of the premises occupied/ which, when ascertained, is the sum on which the business tax is to be calculated. The business tax was to be in lieu of taxation on personalty (sec. 308, Charter 1918). But sec. 308 seems to have fallen out in 1940. There was no personalty tax enacted and there is none now.

After providing for the appointment of an assessment commissioner and assistants, see. 276 continued:

"‘For the purpose of obtaining information in arriving at a proper basis of assessment, the assessors are authorized to enter in and upon any premises and to inspect the same.’’

See. 284 enacted that annually the assessment commissioner should,

"‘after diligent enquiry, and aided by any statement that may be mentioned in this Act or that may be furnished to him otherwise, proceed to make a valuation of all the rateable property in the city and according to his best judgment make assessment rolls, in which he shall set forth correctly, so far as he has been able to ascertain the same, all the particulars and information required to be contained in order to comply with the forms in schedules E and D to this Act, or to the like effect.’’

Schedule E related to business assessment. There was a column headed ‘‘Annual Rental Value.”

Sec. 283 of the Charter at the time in question (ch. 120 of 1918) provided that:

" Every occupant of any building liable to taxation as set forth in this Act shall be liable for such assessment although he be the owner of the premises and liable to taxation as the owner of the land and the buildings.’’

Here the respondent company is the owner, as it appears. Assessments to business tax were made against the respondent company for the years mentioned. The company did not resist the tax as tax, but contested the application of a stock turnover basis by which the city proposed to arrive at the amount to be assessed as annual rental value.

Now to come to the Board of Revision. The board is made up of three persons who must be residents of Winnipeg. They are appointed by city by-law. They shall not be members of the council. It was obvious that the members were to be men of some experience and reliable. They were not necessarily to be lawyers. The board was not a Court. By sec. 32’4 (1940 Charter) after hearing appeals the board is to "maintain the assessment roll as it is or raise or lower the assessment or make any other changes . . . as the cireumtances may require or as to the board shall seem just and expedient.' 9

These present appeals to the board not having been disposed of before the 1940 Charter (ch. 81) came into force are being carried on under the 1940 provisions.

See. 330 enables the board to submit a special case for the opinion of a Judge. Sec. 331 provides for an appeal on questions of law or fact to a Judge which shall be in the nature of a hearing de novo. There is in sec. 332 provision in all cases for a further appeal to this Court. The provision in 330 for an opinion on a question of law is the one under which Mr. Justice Major was acting.

On the approach of the company’s appeals from the assessment commissioner to the board, the chairman of the board issued a notice under sec. 323 of the Charter of 1940, addressed to the manager of The T. Eaton Company, requiring that the company should, through its manager, furnish a very great deal of detailed information as to the company’s Winnipeg business, and should produce books and records for the business of 1936. The books and records of the company, of which production was demanded, included those that would disclose :

“(a) the gross sales in the year 1936 of the Company in Winnipeg;

(b) the gross sales in the year 1936 of the Company’s Winnipeg Retail Store and of each Department thereof;

((c) the gross sales in the year 1936 of the Company’s Mail Order business carried on at and from Winnipeg and of each Department thereof;

‘‘(d) the gross turnover in 1936 for sales, services, and goods and materials supplied in the company’s Winnipeg factories, manufactories and shops, including and without limiting the generality of the foregoing, the work shop, the paint shop, the repair shop, the upholstering shop, the candy factory, the printing plant, the dairy department, and all other similar shop or department where services are rendered or work is done on articles sold or to be sold or to be altered or repaired;

(e) the gross turnover in 1936 for sales and services and goods and materials supplied in the garage maintained and operated by the Company at Winnipeg, together with the number of vehicles handled, stored or repaired with gross storage and service charges earned or charged and gross sales made.’’

Much other detail was specified, but the above sufficed to raise the stock turnover question.

The requisition for these books and records was based on the theory that these aggregates were relevant to the determination of the annual rental value of the premises. This is the bone of contention.

The hearing and the disposition of the appeals has been postponed until the present appeal to this Court has been decided. No question was raised so far by the company as to the possible excessive nature of the city’s demand for production.

Sec. 323 (1940 Charter) provides that if a party to the appeal to the board should, without lawful excuse, decline to produce documents as required, it should be liable to a fine and to have the appeal dismissed.

The learned counsel for the parties respectively said they had concluded together that the company should not, by refusal, be exposed to the possible risk of having its appeals dismissed and thereby be foreclosed from further opposition to the assessment or submission of its case, but that, instead, a case should be stated for the Court under the Charter as to the legal effect of the board’s order for production and, specifically, the question of the relevancy of the documents recited to the inquiry which was to fix for taxation purposes the annual rental value of the several premises in which the business or businesses is or are carried on.

At first I had doubts whether sec. 330 can be used for the decision of any matter not actually final. But the section opens with the words: "‘At any stage of the proceedings,’’ and states that when the opinion of the Judge has been given "‘the board shall decide the appeal in accordance with such opinion.’’ See. 334 says that:

"After the decision in any stated case . . . the board and the assessment commissioner shall, if the decision is at variance with the conclusion at which the board has arrived, cause the necessary amendment to the assessment rolls to be made in order to accord with such decision.”

I think it better to hold that the notice was, in the circumstances, sufficiently a judicial act to permit the reference to the Court of the question of the compulsory effect of the notice. This brings us face to face with the question whether this taxing statute is limited to ordinary rental value without regard to volume of business, or whether it authorizes the use of that volume as a factor in reaching annual rental value. The board’s discretion must be exercised on proper legal principles: Int. Harvester Co. v. Provincial Tax Commission (Sask.) [1941] S.C.R. 325, at 355 (reversing in part [1940] 2 W.W.R. 49). The authorities are numerous that a taxing statute is to be construed strictly: See Craies, 1906, at p. 109; Maxwell, 8th ed., p. 249. It seems that any more recent discussions simply emphasize that the rule: See Assessment and Rating, Municipal

Taxation in Canada, by Mr. H. E. Manning, K.C., 1937, p. 21. See also the same author as to business tax at pp. 95 et seq.

If we go back to the 1918 Charter (amended as to rates) we find sec. 281 (1918), in declaring the tax, referred to the

(i annual rental value of the premises, whether buildings or lands or both, which he [the taxpayer] so occupies in carrying on any of the businesses, professions, employments, or callings above mentioned . . . to the end and intent that all persons, . firms and corporations occupying premises . . . shall be liable

to assessment for a sum equivalent to the annual rental value of the premises so occupied.”

I think this means that the assessment is to be made with the premises distinctly in mind and apart from the nature or volume of business done thereon. I think further that it cannot have been intended that there should be a tax on the volume of business done by merely calling that volume a measure of what should reasonably be assumed, in the case of an owner, to be a fair annual rent.

While the business is, because of its scope, different from the general run, it does not follow that there is anything to force the adoption of a measure of business assessment different to that applied generally. Difficulty because of magnitude and variety cannot alter the law applicable. Except where the statute differentiates, persons liable to business tax cannot be treated otherwise than as one class of ratepayers.

In Stroud’s Judicial Dictionary, 2nd ed., vol. 1, p. 86, judicial interpretations of "‘annual value’’ are to be found. By statute of 1936, ch. 92, sec. 5 (sec. 292 of 1940 Charter) it was enacted as follows:

<4 281A. (1) Annual rental value, for the purposes of this Act, shall be deemed to include the cost of providing heat and other services necessary for comfortable occupancy, whether the same be provided by the occupant or owner.

"‘(2) In assessing annual rental value, the Assessment Commissioner shall take all factors into account so that as far as possible premises similar in size, suitability, advantage of location, and the like, shall be equally assessed. The intent and purpose of this section being that all persons subject to business tax shall be assessed at a fair rental value of the premises occupied, based in general upon rents being actually paid for similar premises. ‘ ‘

Expressif unius est exclusio alterius is the rule for taxing statutes: Broom’s Legal Maxims, 9th ed., p. 428.

Even if there were no such "‘similar premises,’’ I do not see that that fact would authorize the assessment authorities to explore for another basis of a different nature to that which subsee. (2), supra, rather carefully defines. There is the plain legislative purpose of fixing a common factor with the object of equalizing the incidence of assessment for this business tax though rates of levy varied. I was much swayed by the argument of learned counsel for the city and by the English cases he cited, such as Cartwright v. Sculcoates Union [1900] A.C. 150, 69 L.J.K.B. 403, but it seems to me that, for one thing, there was lacking there any local key or guide, such as is present here, which the taxing authority was to follow, and that therefore the Courts assumed that wider scope in the selection of valuation factors was intended to be given to the authorities. More precise words are to be found in the statutes quoted in Robinson Bros. (Brewers) Ltd. v. Houghton and Chester-le- Street Assessment Committee [1938] A.C, 321, 107 L.J.K.B. 369, 54 T.L.R. 568.

Sec. 315 declared that it should be the duty of every owner of real property and his agent to furnish to the assessment commissioner upon his request a written statement showing the names and occupations of the tenants thereof and the amount of the annual or monthly rents payable by each of them. By

sec. 317, the commissioner is not bound by such statement but shall make the assessment to such amounts as he deems right. But to repeat: I think assessment on the basis proposed and now contested would go beyond the scope of sec. 281A, supra. If there had been any intention to enable the assessment commissioner to go out of the way of the normal meaning of "‘fair rental value’’ and apply a measure of rental value according to volume of the business done, I think, with respect, that the Legislature would have used pertinent language. I think the Legislature went as far as it intended in considering the variations in flow of business when it differentiated the rates of tax.

The assessment commissioner and the board had at hand the assessments on the land and buildings. We are not informed of any dispute as to those assessments. It is not suggested that there is any holding back by the company except as to the information and records mentioned in the notice now in question.

With all respect to the board, I think there is a practical answer to this appeal, and it is first that the assessment of land and buildings at value or proportion of value (buildings) is the customary and usual thing, and that an ascertainment of rental value cognate thereto is what was intended; whereas an inquiry into business done throughout a year is a venture upon a field entirely distinct and apart. Further, from the practical aspect it is I think, again with respect, unreasonable to think that it would be expected that the assessors should enter on an inquiry as to volume of business with regard to each of the many types of business in the various classifications named in sec. 282 (1935). It would hardly be possible throughout the city to carry to its conclusion such a demand as that made in this case, and the disturbing effect would be one which I think the Legislature could not, in the absence of express language, be said to have contemplated. Such a duplex system for municipal taxation, optional with the authorities, could hardly be said to be just or expedient. The term annual rental value has a certain stability. The taxpayer can reasonably estimate it, which is a very necessary thing about any municipal tax.

The matter is of very great importance and strong arguments were presented. I think however that this appeal should be dismissed, with the usual result as to costs.