Martin
C.J.S.—This
is
an
appeal
by
way
of
stated
case
from
a
decision
of
the
Saskatchewan
Assessment
Commission
dated
July
22,
1944,
whereby
the
Commission
held
that
the
appellant
had
been
validly
assessed
for
business
tax
by
the
respondent.
The
case
is
stated
under
the
provisions
of
s.
498a(2)
of
the
City
Act,
as
enacted
by
e.
22,
s.
15
of
the
Statutes
of
Saskatchewan,
1943,
and
the
questions,
upon
which
the
opinion
of
the
Court
is
asked,
are
whether
the
Saskatchewan
Assessment
Commission
was
right
in
holding,
(1)
that
the
buildings
and
other
property
referred
to
in
the
assessment
were
occupied
and/or
used
by
the
appellant
for
business
purposes
within
the
meaning
of
the
City
Act
and
that
the
appellant
was
liable
to
assessment
for
the
whole
of
the
said
buildings
and
property,
and
(2)
that
the
appellant
was
liable
for
assessment
although
solely
engaged
in
performing
a
contract
for
the
Crown.
According
to
the
evidence
adduced
before
the
Commission,
Regina
Industries
Ltd.
was
incorporated
by
letters
patent
under
the
Dominion
Companies
Act
for
the
purpose
of
entering
into
a
contract
with
the
Department
of
Munitions
and
Supply
for
the
production
of
anti-tank
gun
carriages.
On
October
17,
1940,
an
agreement
was
executed
by
His
Majesty
the
King
represented
by
the
Minister
of
Munitions
and
Supply,
Regina
Industries
Ltd.
(referred
to
as
the
contractor)
and
General
Motors
of
Canada
Ltd.
(referred
to
as
the
controlling
company).
Under
the
terms
of
the
agreement
the
controlling
company
undertook
to
lease
to
His
Majesty
the
automobile
assembly
plant
of
the
controlling
company
in
the
City
of
Regina
together
with
such
machinery
and
equipment
owned
by
the
controlling
company
and
situate
in
the
plant
as
should
be
required
by
the
contractor
for
the
purpose
of
carrying
out
the
covenant
of
the
contractor
to
manufacture
gun
carriages
as
provided
in
the
agreement.
On
the
same
date
pursuant
to
the
terms
of
the
agreement
a
lease
was
executed
by
General
Motors
of
Canada
Ltd.
whereby
the
premises
described
in
the
agreement
were
leased
to
His
Majesty
the
King
represented
by
the
Minister
of
Munitions
and
Supply.
Regina
Industries
Ltd.,
as
the
contractor,
was
a
party
to
the
lease,
and
the
Minister
of
Munitions
and
Supply
covenanted
to
pay
the
rental
therein
stipulated.
The
contractor
agreed
to
forthwith
remove
from
the
plant
all
machinery
and
equipment
not
required
for
the
performance
of
the
contract
and
to
purchase
or
otherwise
acquire
or
manufacture
and
install
certain
machinery
and
equipment
described
in
a
schedule
of
the
agreement;
and
it
is
provided
that
the
items
so
acquired
and
installed
shall
be
the
property
of
His
Majesty.
In
s.
9.
of
the
agreement
the
contractor
agrees
to
manage
and
operate
the
plant
on
behalf
of
His
Majesty,
‘
and
to
manufacture
therein
for
the
account
of
His
Majesty
and/or
His
Majesty’s
Government
in
the
United
Kingdom
of
Great
Britain
and
Northern
Ireland
Two-Pounder
and/or
Six-Pounder
Anti-tank
gun
carriages
(in
this
agreement
sometimes
referred
to
as
"
carriages
and
in
the
General
Conditions
referred
to
as
‘the
Articles’)
in
such
quantities
as
the
Minister
may
from
time
to
time
direct
in
writing,
and
to
supply
and
deliver
to
or
to
the
order
of
His
Majesty
all
carriages
from
time
to
time
manufactured
hereunder.”
In
s.
13
the
contractor
and
the
controlling
company
represent
that
the
contractor
has
been
expressly
organized
for
the
purpose
of
performing
the
contract
and
that
the
contractor
has
no
liabilities
other
than
those
incurred
in
contemplation
of
the
performance
of
the
contract
and
both
the
contractor
and
the
controlling
company
agree
that
the
contractor
will
not,
without
the
consent
of
His
Majesty,
“engage
in
any
other
business
activity
other
than
that
called
for
by
the
provisions
of
this
contract
until
this
contract
shall
have
been
terminated.
’
This
undertaking
is
followed
by
a
provision
for
reimbursement
of
the
contractor
as
follows:
"‘It
is
therefore
expressly
agreed
that
subject
as
herein
expressly
provided,
all
costs
and
expenses
of
any
kind
whatsoever
properly
incurred
by
the
Contractor
in
contemplation
of
the
performance
of
this
contract,
in
connection
with
the
performance
thereof
and
in
connection
with
the
proper
termination
thereof,
including
the
protection
(after
the
termination
of
this
contract
and
until
turned
over
to
His
Majesty)
of
any
property
of
His
Majesty
under
the
control
of
the
Contractor,
shall
be
included
in
the
costs
of
performance
of
this
contract
for
which
the
Contractor
is
to
be
fully
reimbursed
by
His
Majesty.”
There
is
however
a
proviso
to
the
effect
that
the
contractor
shall
not
be
entitled
to
be
reimbursed
in
respect
of
a
number
of
items
among
them
the
following:
Federal
and
provincial
income
taxes,
excess
profits
or
surtaxes,
salaries
or
other
remuneration
of
corporate
and
executive
officers
other
than
those
exclusively
engaged
in
the
work
called
for
in
the
contract,
amounts
paid
or
payable
to
any
director
as
such,
expenses
of
incorporation
and
organization
of
the
contractor,
and
costs
and
expenses
of
and
incidental
to
the
negotiation
and
the
settling
of
the
terms
of
the
contract.
It
is
also
provided
in
s.
13
that
the
Minister
shall
have
general
supervision
and
control
over
all
costs
and
expenses
and
if,
after
investigation
and
discussion
with
the
contractor,
the
Minister
is
of
the
opinion
that
any
items
of
expenditure
or
of
costs
are
excessive
or
unnecessary
he
may
by
notice
in
writing
require
the
contractor
to
refrain
from
making
such
expenditure
or
incurring
such
costs
as
may
be
specified
in
the
notice
and
the
items
so
specified
shall
be
excluded
from
costs
for
the
purpose
of
the
contract,
except
in
so
far
as
the
contractor
was
obligated
therefor
prior
to
the
giving
of
the
notice;
it
is
stipulated,
however,
that
except
to
the
extent
provide
in
the
contract
the
Minister
will
not,
in
the
exercise
of
the
power
and
control
over
expenditures
interfere
with
the
management
and
conduct
of
the
work
by
the
contractor
in
the
absence
of
any
gross
negligence
or
wilful
default
on
the
part
of
the
contractor.
As
to
payments
of
amounts
due
the
contractor
it
is
provided
that
they
shall
be
paid
out
of
the
Special
Account
referred
to
in
the
General
Conditions
which
are
made
a
part
of
the
contract.
According
to
the
General
Conditions
the
contractor
must
submit
to
the
Minister
on
or
before
the
20th
day
of
the
month
an
itemized
statement
showing
the
amount
estimated
by
the
contractor
to
be
requisite
and
sufficient
to
provide
for
payment
of
the
amounts
properly
payable
by
the
contractor
during
the
succeeding
calendar
month
in
respect
of
the
cost
of
work
and
any
other
cost
to
which
the
contractor
is
entitled
to
reimbursement;
and
subject
to
his
approval
of
the
statement
the
Minister
agrees
to
pay
into
a
special
account
in
a
chartered
bank
in
Canada
on
or
before
the
last
day
of
the
month
in
which
the
statement
is
submitted,
the
estimated
amount
as
shown
by
the
statement.
According
to
the
evidence
of
one
Schnell,
the
Resident
Comptroller
of
Regina
Industries
Ltd.
the
operations
of
the
contractor
are
financed
by
overdraft
guaranteed
by
the
Department
of
Munitions
and
Supply.
Section
15
provides
that
in
addition
to
the
amounts
from
time
to
time
payable
to
the
contractor
under
s.
13,
"‘His
Majesty
shall
pay
to
the
Contractor
a
fee
of
One
Hundred
and
Twenty-
five
dollars
for
each
complete
Carriage
manufactured
by
the
Contractor
and
accepted
on
behalf
of
His
Majesty;
provided,
however,
that
such
fee
at
the
said
rate
shall
be
payable
only
in
respect
of
the
first
eight
hundred
and
seventy
(870)
complete
carriages
so
manufactured
and
accepted.
Such
fee
shall
be
deemed
to
include
and
cover
all
management
and
supervisory
services
(exclusive
of
reasonable
and
proper
travelling
expenses)
performed
by
the
Contractor
or
the
Controlling
Company
for
the
purpose
of
or
in
connection
with
the
work
.
.
.‘17
Provision
is
also
made
that
when
870
complete
carriages
shall
have
been
manufactured
the
Minister
shall
cause
an
audit
to
be
made
by
accountants
selected
by
him
of
the
contractor’s
costs
of
production
of
870
carriages
together
with
costs
of
production
of
the
last
170
to
200
carriages
comprised
in
the
total
quantity
of
870.
Upon
the
costs
having
been
determined
by
the
accountant,
the
Minister
and
contractor
shall
commence
negotiations
with
a
view
to
agreeing
upon
"‘the
fee
or
other
remuneration
or
profit’’
to
which
the
contractor
shall
be
entitled
in
respect
of
carriages
made
in
excess
of
the
first
870
carriages.
In
the
event
of
the
Minister
and
contractor
failing
to
agree
upon
the
fee
within
a
reasonable
time
the
matter
is
to
be
decided
by
arbitration
as
provided
in
the
General
Conditions.
It
is
also
provided
that
in
the
event
of
payment
being
made
on
the
basis
of
cost
plus
a
fixed
fee
per
carriage,
such
fee
shall
not
exceed
an
amount
equal
to
3%
of
the
amount
of
the
cost
thereof
as
certified
in
writing
by
an
auditor
appointed
by
the
Minister.
By
an
amendment
to
the
agreement
dated
September
17,
1943
it
was
agreed
that
the
contractor
would
be
paid
a
fee
of
$50.04
for
each
additional
carriage
and
a
bonus
of
25%
of
the
amount
(if
any)
by
which
the
cost
of
production
should
be
less
than
$1,667.89
per
carriage,
such
cost
of
production
to
be
determined
by
audit
made
by
an
accountant
selected
by-
the
Minister.
The
witness
Schnell,
the
Comptroller,
testified
at
the
hearing
before
the
Saskatchewan
Assessment
Commission,
that
the
fee
received
by
the
contractor
for
each
vehicle
was
a
management
fee
and
that
when
it
was
paid
to
the
contractor
the
Department
of
Munitions
and
Supply
had
no
control
over
it;
he
also
said
that
the
management
fee
would
be
the
profit
of
the
contractor.
It
is
of
interest
also
to
note
that
in
the
contract
the
words
"‘fee
or
other
remuneration
or
profit’’
are
used,
and
in
the
lease
made
by
General
Motors
Ltd.
to
the
Crown
provision
is
made
for
a
review
of
the
rentals
at
the
time
of
the
fixing
‘‘of
the
fee
or
other
remuneration
or
profit”
to
be
paid
to
the
contractor
in
respect
of
carriages
in
excess
of
the
first
870.
In
s.
20
of
the
agreement
His
Majesty
represented
by
the
Minister
of
Munitions
and
Supply
undertakes
to
indemnify
the
contractor
against
any
action,
claim
or
proceeding
relating
to
the
infringement
of
any
patent
or
design
and
to
pay
any
royalties
which
may
be
payable
in
respect
of
any
of
the
carriages
or
any
part
thereof.
Section
21
provides
that
the
Minister
may
at
any
time
by
notice
in
writing
to
the
contractor
direct
that
operations
under
the
contract
shall
cease
as
regards
all
or
any
of
the
work
which
the
contractor
has
on
hand
and
in
such
ease
all
costs
and
expenses
for
which
His
Majesty
is
liable
shall
be
paid
or
reimbursed
to
the
contractor
in
accordance
with
the
provisions
of
s.
13;
and
in
addition
there
shall
be
paid
to
the
contractor
the
fees
prescribed
in
s.
15
in
respect
of
all
work
completed
before
the
giving
of
such
notice
and
a
further
amount
representing
a
fair
and
reasonable
fee
in
respect
of
work
not
completed
before
the
giving
of
such
notice.
It
is
further
provided
that
on
the
termination
of
the
contract
the
contractor
shall
deliver
to
His
Majesty
at
the
plant
all
completed
and
uncompleted
carriages
on
hand
and
all
government
equipment
in
the
possession
of
the
contractor
and
shall
also
deliver
to
His
Majesty
possession
of
the
plant
for
the
remainder
of
the
term
of
the
lease.
Section
460
of
the
City
Act,
R.S.S.
1940,
c.
126
is
as
follows:
"
Subject
to
the
other
provisions
of
this
Act,
the
municipal
and
school
taxes
of
the
city
shall
be
levied
upon.
(1)
lands;
(2)
businesses;
and
(3)
special
franchises.”
Section
463(1)
provides
that
‘‘The
assessor
shall
assess
either
the
owner
or
occupant
of
every
parcel
of
land
in
the
city,
and
every
person
who
is
engaged
in
business
or
is
the
owner
of
a
special
franchise,
and
shall
prepare
an
assessment
roll
showing
the
name
of
each
person
assessed,
the
property
in
respect
of
which
he
is
assessed
and
the
assessed
value
of
the
property.’’
Section
463(7)
provides
that
in
assessing
businesses
the
Assessor
shall
fix
a
rate
per
square
foot
(not
to
exceed
a
sum
fixed
by
the
statute)
of
floor
space
of
each
building
or
part
thereof
used
for
business
purposes
and
that
he
shall
so
far
as
he
deems
practicable
classify
the
various
businesses
and
may
fix
a
different
rate
for
each
class.
Section
465
provides
that:
‘‘The
occupant
of
any
building
liable
to
taxation
under
section
463
shall
be
liable
for
the
business
tax
though
he
may
also
be
the
owner
of
the
premises
and
liable
as
such
owner
to
taxation
on
the
land.’’
The
tax
on
business
is
a
personal
tax
and
not
a
tax
on
property
;
it
is
a
tax
in
personam
and
not
a
tax
in
rem.
Moose
Jaw
v.
Br.
American
Oil
Co.,
[1937]
2
W.W.R.
309
at
pp.
314
and
315;
Kitchener
v,
Allen
Theatres
(1922),
22
O.W.N.
231;
Re
Hertzman
and
Hertzman
(1931),
40
O.W.N.
561.
That
the
appellant
contractor
occupies
the
premises
leased
from
the-Crown
by
General
Motors
Ltd.
there
can
be
no
doubt.
“Occupant”
is
defined
in
the
City
Act,
R.S.S.
1940,
c.
126,
as
amended
by
e.
22
of
the
Statutes
of
1941,
s.
2,
as
follows:
‘‘
‘Oc
cupant’
includes
the
resident
occupier
of
land
or,
if
there
is
no
resident
occupier,
the
person
entitled
to
the
possession
thereof,
a
leaseholder
and
a
person
having
or
enjoying
in
any
way
for
any
purpose
whatever
the
use
of
land
otherwise
than
as
owner.
‘
‘
The
definition
is
very
wide
and
includes
any
person
who
has
or
enjoys
the
use
of
land
for
any
purpose
whatever.
Here
the
appellant
contractor
is
in
possession
of
the
premises
held
under
lease
by
the
Crown
and
enjoys
the
use
thereof
for
the
purpose
of
carrying
on
the
business
of
making
anti-tank
gun
carriages.
It
will
be
observed
that
among
the
covenants
on
the
part
of
the
contractor
contained
in
the
agreement
is
one
to
deliver
up
possession
of
the
premises
to
His
Majesty
on
the
determination
of
the
agreement.
^Business”
is
defined
in
s.
2(4)
of
the
City
Act
as
follows:
""
"Business’
includes
any
trade,
profession,
calling,
occupation
or
employment.
’
’
In
Northern
Sask.
Flying
Training
School
v.
Buckland,
Prince
Albert
Air
Observers’
School
v.
Buckland,
[1944]
1
D.L.R.
285
at
pp.
292-3,
the
Court
considered
a
definition
of
"‘business''
and
provisions
as
to
the
assessment
of
business
contained
in
the
Rural
Municipality
Act,
R.S.S.
1940,
c.
129,
which
are
similar
to
the
definition
of
business
and
provisions
as
to
assessment
contained
in
the
City
Act.
The
conclusion
reached
was
that
the
intention
of
the
Legislature
was
to
enable
the
municipality
to
levy
a
tax
upon
any
person
who
is
engaged
in
any
trade,
profession,
calling,
occupation
or
employment
within
the
municipality
"‘which
occupies
the
time
and
attention
and
labour
.
.
.
for
profit.”
Vide
Smith
v.
Anderson,
(1880),
15
Ch.
D.,
247
at
p.
208;
Rideau
Club
v.
Ottawa
(1907),
15
O.L.R.
118,
Osler
J.A.
at
p.
122;
Maclaren
J.A.
at
p.
124.
It
was
suggested
by
counsel
for
the
appellant
that
the
contractor
is
merely
a
servant
or
agent
of
the
Crown.
The
contractor
however
is
given
control
over
the
purchase
of
supplies,
the
employment
of
labour
and
generally
the
management
and
the
conduct
of
the
plant
in
carrying
out
its
agreement
to
manufacture
gun
carriages
for
His
Majesty.
The
provisions
of
the
agreement
heretofore
referred
to
establish
in
my
opinion
that
the
contractor
operates
the
plant
on
his
own
account
and
has
full
control
of
the
operations
thereof
subject
only
to
the
right
of
the
Minister
to
inspect
and
exercise
control
over
expenditures
made
to
produce
the
carriages
and
for
which
His
Majesty
is
obligated
to
pay;
it
is
provided
however
that
the
Minister
in
the
exercise
of
his
power
and
control
over
the
expenditures
will
not
interfere
with
the
management
and
conduct
of
the
work
by
the
contractor.
Certain
provisions
of
the
agreement
would
not
be
necessary
if
the
contractor
were
acting
merely
as
a
servant
or
agent
of
the
Crown,
for
example
the
provision
that
the
Minister
and
inspectors
may
have
access
to
the
plant,
the
provision
that
the
Minister
may
exercise
control
over
the
expenditures
in
order
to
see
that
the
carriages
are
being
produced
at
a
reasonable
price,
the
provision
that
the
equipment
purchased
shall
be
the
property
of
His
Majesty
and
the
covenant
of
the
contractor
that
on
the
termination
of
the
agreement
it
will
deliver
all
government
equipment
to
His
Majesty
and
deliver
up
possession
of
the
premises
to
His
Majesty.
Moreover,
as
stated
above,
among
the
items
of
expenditure
for
which
the
Minister
is
not
to
be
liable
are
federal
and
provincial
income
taxes,
excess
profits
and
surtaxes
;
these
exceptions
indicate
clearly
that
the
contractor
is
not
the
agent
of
the
Crown
and
that
in
the
contemplation
of
the
parties
the
contractor
may
be
called
upon
to
pay
certain
taxes
for
which
the
Crown
could
not
be
liable.
In
support
of
the
contention
that
the
contractor
cannot
be
assessed
for
business
on
the
ground
that
it
is
performing
a
service
for
the
Crown
on
Crown
property,
reference
was
made
on
the
argument
to
the
decision
of
the
Supreme
Court
of
Canada
in
Halifax
v.
Halifax
Harbour
Com’rs,
[1935]
1
D.L.R.
657,
S.C.R.
215.
There
is,
however,
no
analogy
between
the
facts
in
that
case
and
the
facts
here
under
consideration.
Vide
remarks
of
Duff
C.J.C.
at
pp.
664-5
D.L.R.,
pp.
226-7
8.C.R.;
Northern
Sask.
Flying
Training
School
v.
Buckland,
[1944]
1
D.L.R.
285
at
p.
291.
The
provisions
of
the
agreement
and
the
evidence
adduced
before
the
Assessment
Commission
make
it
clear
that
the
appellant
carries
on
the
business
of
manufacturing
anti-tank
gun
carriages
on
premises
held
under
lease
by
the
Crown;
that
it
is
in
occupation
of
the
premises
under
its
agreement
with
the
Crown
as
represented
by
the
Minister
of
Munitions
and
Supply,
and
carries
on
business
for
profit
as
an
independent
contractor
;
it
is
therefore
subject
to
be
assessed
for
business
tax
under
the
provisions
of
the
City
Act.
The
fact
that
the
business
is
carried
on
on
Crown
property
can
make
no
difference
as
a
person
may
be
assessed
for
business
carried
on
by
him
on
Crown
property
;
the
interest
of
the
Crown
is
not
affected
by
the
levy
of
the
business
tax
on
the
appellant.
I
would
answer
both
questions
in
the
stated
case
in
the
affirmative
and
dismiss
the
appeal
with
costs.
Appeal
dismissed.
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