CAMERON,
J.:—This
is
an
appeal
from
an
assessment
dated
March
12,
1948,
and
made
under
the
Dominion
Succession
Duty
Act
(1940-41,
c.
14
as
amended)
on
the
estate
of
Edward
Percy
Flintoft,
late
of
the
City
of
Montreal,
who
died
testate
on
May
8,
1946.
His
last
will
and
testament
dated
March
30,
1944,
was
duly
admitted
to
probate
by
order
dated
May
20,
1946.
Mr.
Flintoft
in
his
lifetime
was
employed
by
the
Canadian
Pacific
Railway
(hereinafter
called
"‘the
company”)
from
1908
until
the
time
of
his
retirement
on
March
1,
1945,
on
which
latter
date
he
was
its
general
counsel
and
one
of
its
vice-presidents.
In
the
said
assessment
there
was
included
in
the
aggregate
net
value
of
the
assets
of
his
estate
the
capitalized
value
of
a
pension
of
$230.74
per
month,
payable
to
his
widow,
Felicia
H.
Flintoft.
In
appealing
from
the
said
assessment,
the
appellants
admitted
that
of
the
monthly
sum
of
$230.74,
payable
to
Mrs.
Flintoft,
the
sum
of
$16.74
was
payable
out
of
the
Canadian
Pacific
Railway
Company
Trust
Fund
(hereinafter
to
be
referred
to
as
"the
Trust
Fund’’),
and
that
that
proportion
of
the
total
pension
was
properly
included
as
an
asset
of
the
estate
and
taxable
under
the
provisions
of
Section
3(1)
(g)
of
the
Act.
It
contends,
however,
that
the
balance
of
$214.00
which
has
been
paid
and
is
being
paid,
not
out
of
the
Trust
Fund
but
out
of
the
company’s
current
revenue
and
charged
to
working
expenses,
is
not
an
asset
of
the
estate
and
is
not
a
"‘succession''
within
any
of
the
provisions
of
the
Act.
The
full
amount
of
the
assessment
has
been
paid
by
the
appellant
under
protest
and
in
these
proceedings
a
declaration
is
sought
setting
aside
the
assessment
in
regard
to
this
matter
and
for
the
repayment
to
the
appellants
of
any
sums
paid
by
them
in
excess
of
the
amount
to
which
the
respondent
is
legally
entitled.
By
order
of
this
Court
pleadings
were
delivered.
On
August
10,
1936,
a
new
policy
for
employee
pensions
was
adopted
by
the
Board
of
Directors
of
the
company,
as
shown
by
an
extract
from
the
minutes
of
that
date
(Ex.
A-l).
Effective
January
1,
1903,
the
company
had
inaugurated
a
system
of
voluntary
pensions
without
contribution
from
the
employees.
At
the
meeting
of
August
10,
1936,
it
was
resolved
that,
subject
to
certain
reservations
not
here
material,
the
former
plan
would
be
dropped
and
a
new
system
of
contributory
pensions
would
come
into
effect
on
January
1,
1937.
The
rules
and
regulations
of
the
new
Pension
Department
and
effective
January
1,
1937,
form
part
of
Ex.
A-l.
The
rules
and
regulations
in
effect
at
the
time
of
Mr.
Flintoft’s
death
are
contained
in
the
pamphlet
Ex.
A-3.
Pursuant
to
Rule
10(a),
Mr.
Flintoft
on
December
3,
1936,
elected
to
become
a
contributor
under
the
new
pension
system
(Ex.
A-2).
From
and
after
January
1,
1937,
until
his
retirement
on
March
1,
1945,
he
made
contributions
to
the
Pension
Fund
equal
to
3
per
cent
of
his
salary
in
accordance
with
the
pension
rules,
his
total
contributions
over
that
period
aggregating
$4,768.80.
Under
Rule
18(a),
Mr.
Flintoft
upon
retirement
would
have
been
entitled
to
a
monthly
pension
of
$576.12,
but
no
part
thereof
under
that
rule
would
have
been
payable
to
his
surviving
wife.
Rule
19(a)
provides
that
‘‘any
contributor
may
elect
to
receive
in
lieu
of
the
pension
allowance
granted
under
Rule
18,
an
allowance
payable
to
himself
during
his
life,
subject
to
the
condition
that
one-half
of
the
allowance
will
be
continued
to
his
wife
should
she
survive
him’’;
and
by
Rule
19(f)
it
is
provided
that
‘‘the
optional
allowances
referred
to
in
this
rule
shall
be
calculated
in
accordance
with
the
methods
prescribed
from
time
to
time
by
the
Actuary.’’
Mr.
Flintoft,
desiring
to
take
advantage
of
that
provision
and
within
the
time
limit
set
out
in
Rule
19(c),
gave
notice
by
Ex.
A-4,
dated
April,
1944,
that
he
desired
the
reduced
pension
allowance
provided
for
in
Rule
19,
subject
to
the
condition
that
one-half
of
such
pension
allowance
should
be
continued
to
his
wife
should
she
survive
him.
From
the
date
of
his
retirement
on
March
1,
1945,
Mr.
Flintoft
received
the
reduced
pension
at
the
rate
of
$461.47
per
month
until
his
death
on
May
8,
1946,
the
total
payments
aggregating
$6,579.67.
Of
the
total
monthly
payment
of
$461.47,
$33.47
was
paid
each
month
out
of
the
Trust
Fund
established
under
the
pension
rules,
and
$428.00
was
paid
by
the
company
out
of
its
current
revenue
and
charged
to
working
expenses.
Upon
his
death
his
widow,
in
accordance
with
Rule
19,
began
to
receive
a
monthly
pension
allowance
of
$230.74,
of
which
$16.74
was
paid
out
of
the
Trust
Fund
and
$214.00
was
paid
out
of
the
current
revenues
of
the
company
and
charged
to
working
expenses.
The
pension
system
is
administered
by
a
committee
of
seven
members,
four
of
whom
are
officers
of
the
company
and
ap-
pointed
by
its
Board,
the
remaining
three
being
elected
from
among
the
general
chairmen
of
the
organized
classes
of
employees
of
the
company
(Rule
2).
Its
powers
are
set
out
in
Rule
6
and
include
the
power
to
determine
the
eligibility
of
employees
to
receive
pension
allowances,
the
amount
of
contributions,
all
pension
allowances
and
refunds;
to
retain
the
services
of
an
actuary
for
the
purpose
of
valuing
the
Trust
Fund
and
to
determine
the
percentages
that
may
be
withdrawn
therefrom;
and
it
shall
from
time
to
time,
as
required,
make
reports
of
its
actions
to
the
Board,
which
may
review,
alter
or
rescind
such
actions.
Rule
12
provides
for
the
establishment
of
the
Trust
Fund
and
the
payments
to
be
made
therefrom.
The
applicable
parts
are
as
follows:
"
"
12.
(a)
All
contributions
by
employees
shall
in
the
first
instance
be
deposited
in
a
chartered
bank
in
a
separate
account
to
the
credit
of
the
Trust
Fund
of
which
Canadian
Pacific
Railway
Company
shall
be
trustee,
which
Trust
Fund
shall
not
form
any
part
of
the
revenues
or
assets
of
the
Company.
The
Trust
Fund
shall
be
administered
by
the
Trustee
subject
to
the
provisions
of
these
rules
and
shall
be
invested
from
time
to
time
in
Dominion
Government
Securities
or
securities
guaranteed
by
the
Dominion
Government.
(b)
From
the
Trust
Fund
thus
set
up
there
shall
be
paid:
1.
The
cost
of
administering
the
Trust
Fund.
2.
Such
proportion
of
the
cost
of
administering
the
pension
system
as
the
Committee
may
from
time
to
time
determine.
3.
A
proportion
of
the
pension
allowance
of
any
contributor
retiring
after
January
1,
1937.
Such
proportion
shall
be
determined
and
certified
to
from
time
to
time
by
the
Actuary,
and
unless
the
Committee
shall
otherwise
direct
shall
be
expressed
as
a
percentage
of
that
portion
of
the
total
pension
which
accrues
in
respect
of
the
period
for
which
the
employee
has
made
contributions.
The
proportion
so
determined
shall
not
be
increased
until
such
time
as
the
Fund
shall
be
found
to
be
in
a
position
to
bear
50%
of
the
cost
of
all
pensions
emerging
thereafter
;
provided,
however,
that
any
contribution
made
by
the
Company
under
Rule
13(b)
shall,
if
at
any
time
so
directed
by
the
Board,
be
applied
in
whole
or
in
part
to
increase
either
temporarily
or
permanently
the
proportion
so
determined.’’
It
will
be
noted
that
only
a
proportion
of
the
pension
allowance
of
any
contributor
is
payable
out
of
the
Trust
Fund.
Pursuant
to
the
requirements
of
Rule
12(b)
(3),
Mr.
Rutherford,
the
actuary
appointed
under
Rule
6(a),
made
a
report
on
the
valuation
of
the
Pension
Trust
Fund
(Ex.
A-9)
and
made
the
following
recommendation
:
"‘It
is
recommended
that,
effective
from
January
1,
1945,
the
proportion
of
each
pension
emerging
in
future
to
be
charged
to
the
Fund
be
increased
from
30
per
cent
to
33-⅕
per
cent
of
that
portion
of
the
total
pension
which
shall
accrue
in
respect
of
the
period
for
which
the
employee
shall
have
made
contributions.
’’
That
recommendation
was
carried
into
effect
and
it
was
pursuant
thereto
that
out
of
the
Trust
Fund
there
was
paid
to
Mr.
Flintoft
upon
retirement
the
monthly
sum
of
$33.47,
and
following
his
death
the
monthly
sum
of
$16.74
was
paid
to
Mrs.
Flintoft.
The
evidence
indicates
that
the
company
issues
all
cheques
to
pensioners,
its
pension
payrolls
(of
which
Exhibits
A-5
to
8
are
samples)
indicating
the
amounts
payable
out
of
the
Trust
Fund,
and
monthly
thereafter
it
recovers
from
the
Trust
Fund
the
payments
which
it
had
made
on
its
behalf.
The
evidence
is
conclusive
that
the
balance
of
the
payments
to
both
employee
pensioners
and
dependent
pensioners
was
paid
out
of
current
revenues
of
the
company
and
charged
monthly
to
working
expenses;
and
that
the
company
had
established
no
fund
or
reserve
in
respect
thereof.
Rule
13
is
as
follows:
"13.
(a)
The
Company
shall
pay
in
to
the
Trust
Fund
monthly
an
amount
equal
to
25%
of
any
allowances
paid
pursuant
to
Rule
21,
except
the
minimum
allowances
provided
for
in
the
said
rule
or
allowances
which
are
committed
under
the
provisions
of
said
rule.
Such
payments
into
the
Trust
Fund
will
be
applied
from
time
to
time
for
the
purpose
of
increasing
the
proportion
of
the
pension
allowances
which
the
Trust
Fund
would
otherwise
provide.
(b)
The
Company
may
from
time
to
time
make
contributions
directly
to
the
Trust
Fund,
to
be
applied
in
accordance
with
the
directions
of
the
Board,
for
the
purpose
of
increasing
the
proportion
of
the
pension
allowances
which
the
Trust
Fund
would
otherwise
provide.”
Under
para.
(a)
thereof,
the
payments
by
the
company
to
the
Trust
Fund
were
small,
aggregating
up
to
December
31,
1950,
only
$9,554.00.
Under
para.
(b)
thereof
the
company
up
to
December
31,
1950,
had
paid
into
the
Trust
Fund
a
sum
in
excess
of
$22,000,000.00.
All
payments
made
to
the
Trust
Fund
are
ear-marked
so
as
to
indicate
contributions
by
employees,
and
contributions
by
the
company
under
both
Rule
13(a)
and
Rule
13(b).
It
will
be
noted,
however,
that
contributions
made
under
Rule
13(b)
are
‘‘to
be
applied
in
accordance
with
the
directions
of
the
Board’’
(i.e.,
the
Board
of
Directors
of
the
company),
and
the
evidence
is
that
up
to
date
no
direction
has
been
given
by
the
Board
in
relation
thereto.
While,
therefore,
those
contributions
form
part
of
the
Trust
Fund,
they
are
as
yet
not
available
for
the
purpose
of
increasing
the
proportion
of
the
pension
allowances
which
the
Trust
Fund
would
otherwise
provide.
It
is
being
invested
and
allowed
to
accumulate.
The
Trust
Fund
which
is
now
available
for
payment
of
a
proportion
of
the
pension
allowances
is
comprised
of
employees’
contributions
and
the
negligible
amount
provided
by
the
company
under
Rule
13(a).
Mr.
L.
B.
Unwin,
Vice-President
of
the
company
in
charge
of
finance,
and
Chairman
of
the
committee
administering
the
pension
system,
stated
that
from
his
experience
and
knowledge
it
would
not
be
at
least
until
1970
that
it
would
be
advisable
for
the
Board
to
direct
the
actuary
to
take
into
account
in
his
calculation
of
the
percentage
payable
out
of
the
Trust
Fund,
any
monies
contributed
by
the
company
under
Rule
13(b).
I
assume
that
the
intention
is
to
build
up
the
Trust
Fund
over
a
period
of
years
and
in
the
meantime
to
pay
the
remaining
portion
of
the
allowances
out
of
the
current
revenue.
Rule
12(b)
3
provides
for
the
actuary
to
determine
and
certify
from
time
to
time
the
proportion
of
pension
allowances
payable
out
of
the
Trust
Fund
and
that
the
proportion
so
determined
shall
not
be
increased
until
such
time
as
the
Fund
shall
be
found
to
be
in
a
position
to
bear
50
per
cent
of
the
cost
of
all
pensions
emerging
therefrom
(subject
to
a
provision
not
now
relevant).
The
actuary,
Mr.
Rutherford,
stated
that
the
Trust
Fund
is
not
now
able
to
bear
50
per
cent
of
such
cost
and
that
as
an
actuary
he
was
of
the
opinion
that
the
Fund
would
not
be
in
that
position
in
the
foreseeable
future.
The
question
for
decision,
therefore,
is
whether
the
monthly
payment
of
$214.00
to
Mrs.
Flintoft
is
a
^succession”
within
the
meaning
of
the
Act.
‘‘Succession’’
is
defined
in
Section
2(m)
and
by
that
section
the
term
also
includes
"‘any
disposition
of
property
deemed
by
this
Act
to
be
included
in
a
succession.”
Section
3
declares
certain
dispositions
to
be
deemed
as
successions
and
for
the
respondent
it
is
submitted
that
Section
3(1)
(g)
is
applicable
to
the
facts
of
this
case.
It
is
as
follows:
"13.
(1)
A
‘succession’
shall
be
deemed
to
include
the
following
dispositions
of
property
and
the
beneficiary
and
the
deceased
shall
be
deemed
to
be
the
‘successor’
and
‘predecessor’
respectively
in
relation
to
such
property
:—
(g)
any
annuity
or
other
interest
purchased
or
provided
by
the
deceased,
either
by
himself
alone
or
in
concert
or
by
arrangement
with
any
other
person,
to
the
extent
of
the
beneficial
interest
accruing
or
arising
by
survivorship
or
otherwise
on
the
death
of
the
deceased,
including
superannuation
or
pension
benefits
or
allowances
payable
or
granted
under
legislation
of
the
Parliament
of
Canada
or
of
any
Province,
or
under
any
other
superannuation
or
pension
fund
or
plan
whether
the
said
benefits
or
allowances
are
payable
or
granted
out
of
the
revenue
of
His
Majesty
in
respect
of
the
Government
of
Canada,
or
of
any
Province
thereof,
or
out
of
any
fund
established
for
the
purpose,
which
benefits
or
allowances
shall
be
deemed
for
the
purposes
of
the
Act
to
have
been
purchased,
acquired,
or
provided
by
the
deceased.”
As
originally
enacted,
subsection
(g)
comprised
only
the
first
five
lines
as
it
now
appears,
concluding
with
the
words
‘‘on
the
death
of
the
deceased.’’
That
part
I
shall
refer
to
as
the
original
part
of
the
subsection.
By
6-7
Geo.
V,
€.
25,
the
subsection
was
repealed
and
a
new
subsection
(g),
as
above
quoted,
was
substituted
therefor.
It
contained
all
the
original
subsection,
but
added
thereto
were
all
the
words
commencing,
"‘including
superannuation
or
pension
benefits
or
allowances.’’
That
part
I
shall
refer
to
as
the
added
part
of
subsection
(g).
In
McDougall
v.
Minister
of
National
Revenue,
[1949]
Ex.
C.R.
314;
[1949]
C.T.C.
164,
I
considered
the
meaning
and
effect
of
subsection
(g)
in
regard
to
certain
lump
sum
payments
made
to
the
widow
of
an
employee
of
the
Bell
Telephone
Company
under
the
provisions
of
its
"Pension
Fund.’’
In
that
case,
no
contribution
to
the
fund
had
been
made
by
the
deceased
employee
or
his
widow.
In
that
case
I
held
that
the
award
and
payments
were
purely
voluntary
and
that
the
recipient
of
the
payments
had
no
right
to
enforce
the
payment
thereof,
and
that
under
those
circumstances
there
was
no
beneficial
interest
arising
by
survivorship
or
otherwise
to
the
donee,
upon
the
death
of
the
employee.
In
that
case
I
referred
to
and
followed
the
case
of
Re
Miller’s
Agreement,
Uniacke
v.
Attorney-General,
[1947]
All
E.R.
78,
in
which
Wynn-Parry,
J.,
said
at
p.
80:
“The
property
in
question
in
each
case
is
an
annuity,
and
is
clearly
in
each
case
an
annuity
purchased
or
provided
by
Mr.
Noad,
the
deceased.
However,
the
vital
question
is:
Did
any
beneficial
interest,
within
the
meaning
of
that
phrase
as
used
in
the
section,
accrue
to
the
plaintiffs
on
the
death
of
Mr.
Noad?
In
my
view,
the
word
‘interest’
in
the
subsection
means
such
an
interest
in
property
as
would
be
protected
in
a
court
of
law
or
equity.
In
the
present
case,
it
is
clear—and
counsel
for
the
Crown
does
not
contend
to
the
contrary
—
that
the
effect
of
the
deed
of
Feb.
4,
1942,
is
not
to
create
any
trust
in
favour
of
the
annuitants.
It
further
appears
clear
to
me,
from
the
reasoning
of
the
Court
of
Appeal
in
Re
8chessman,
Ex
p.
Official
Receiver,
Trustee
v.
Cargo
Superintendents
(London),
Ltd.
&
Schebsman,
that
at
common
law
the
annuitants
have
no
right
to
sue
Mr.
Miller
or
Mr.
Vos
under
the
deed.
On
the
receipt
by
each
of
the
annuitants
of
any
payment
in
respect
of
her
annuity,
the
property
in
the
money
so
paid
will
pass
to
her,
but
she
has
no
right
to
compel
any
payment.
At
common
law,
so
far
as
each
annuitant
is
concerned,
the
deed
is
res
inter
alios
acta,
and
she
has
no
right
thereunder.’’
And,
at
pp.
82-3
he
said
:
"‘On
its
true
construction,
I
cannot
find—and
this
is
really
admitted—that
the
deed
confers
on
any
of
the
annuitants
any
right
to
sue,
or
anything
more
than
a
right
to
retain
any
sums
which
may
from
time
to
time
be
paid
by
Mr.
Miller
or
Mr.
Vos
under
the
deed.
In
my
view,
the
annuitants
are
not
persons
to
whom
the
deed
purports
to
grant
something
or
with
whom
some
agreement
or
covenant
is
purported
to
be
made,
and,
in
these
circumstances,
the
annuities
are
not
annuities
within
the
meaning
I
place
on
the
word
as
appearing
in
the
Finance
Act,
1894,
s.
2(l)(d)
.
..
on
the
view
which
I
take
of
the
document,
the
payments,
if
and
when
made,
will
be
no
more
than
voluntary
payments
and,
as
such,
appear
to
me
to
be
quite
outside
the
scope
of
the
section.
Therefore,
I
hold
that
the
annuitants
are
not
liable
to
estate
duty
in
respect
of
the
annuities.”
In
the
Cniacke
case
it
was
held:
"‘(i)
on
the
true
construction
of
the
deed,
notwithstanding
the
use
of
the
word
‘entitled
to,
‘
the
annuitants
had
no
rights
thereunder
either
at
common
law
or
in
equity,
except
the
right
to
retain
any
sums
paid
to
them.
(iii)
the
word
‘interest’
in
the
Finance
Act,
1894,
s.
2(1)
(d),
meant.
such
an
interest
in
property
as
would
be
protected
by
the
courts,
and
the
annuities
payable
under
the
deed
were,
therefore,
not
annuities
within
the
meaning
of
s.
2(1)(d),
and
the
annuitants
were
not
liable
to
estate
duty
in
respect
of
them.
(iv)
since
the
annuitants
had
no
right
to
sue
for
the
annuities,
they
did
not
become
‘entitled’
to
them.
within
the
meaning
of
that
phrase
in
the
Succession
Duty
Act,
1853,
s.
2,
and,
therefore,
they
were
not
liable
to
succession
duty
in
respect
of
them.”
Now,
in
the
original
part
of
subsection
(g)
it
will
be
noted
that
it
is
not
all
of
the
interest
purchased
or
provided
by
the
deceased
that
is
deemed
to
be
a
succession,
but
only
‘‘the
extent
of
the
beneficial
interest
accruing
or
arising
by
survivorship
or
otherwise.
‘
’
There
can
be
no
doubt
that
all
contributions
of
the
company
to
the
Trust
Fund
(save
possibly
the
small
amounts
payable
under
Rule
13a)
were
to
be
and
remain
voluntary
and
that
no
pensioner
or
pensioner’s
dependent
would
have
any
claim
against
the
company
for
pension
allowance.
The
entire
scheme
arises
from
the
Board
meeting
of
August
10,
1936,
and
clause
7
of
the
plan
therein
outlined
in
Ex.
A-1
is
as
follows
:
"7.
All
contributions
of
the
Company
are
to
remain
voluntary
and
no
employee
or
pensioner
will
have
a
legal
right
or
claim
against
the
Company
for
pension
allowance.”
Then
Rule
31
is
as
follows
:
“31.
(a)
The
establishment
and
continuance
of
this
system
of
pensions
insofar
as
the
Company’s
contributions
are
concerned
is
purely
voluntary
on
the
part
of
the
Company,
which
reserves
the
right
to
alter,
suspend
or
discontinue
from
time
to
time
and
in
whole
or
in
part
its
contributions
towards
pension
allowanees
or
to
the
Trust
Fund,
and
neither
such
establishment
and
continuance
nor
any
action
at
any
time
taken
by
the
Board
or
the
Committee
shall
be
construed
as
giving
to
any
employee
or
pensioner
a
legal
right
or
claim
to
any
allowance
from
the
company
for
pension.
While
it
is
the
policy
of
the
Company
to
encourage
its
employees
to
remain
with
it,
and
by
faithful
service,
to
qualify
for
pension
allowances,
nothing
contained
in
these
rules
shall
diminish
or
affect
any
right
which
it
otherwise
has
to
discharge
any
employee
at
any
time
when
the
interests
of
the
Company
in
its
judgment
may
so
require,
without
liability
for
any
claim
for
any
pension
or
allowance,
other
than
salary
or
wages
owing
and
unpaid,
and
for
the
repayment
of
the
contributions,
if
any,
made
by
the
employee
under
Rule
11.
(b)
Notwithstanding
anything
contained
in
these
rules,
the
Company
may
cancel
its
voluntary
proportion
of
any
pension
whenever
it
is
established,
in
the
opinion
of
the
Committee,
that
a
pensioner
is
guilty
of
serious
misconduct.’’
Now
it
is
not
necessary
to
consider
whether
Mrs.
Flintoft
has
or
has
not
a
legal
right
to
enforce
the
payment
to
her
of
the
monthly
sum
of
$16.74
out
of
the
Trust
Fund
because
of
the
admission
made
by
the
appellants
that
as
to
that
amount
the
assessment
is
valid.
It
is
clear
that
under
the
Rules
she
cannot
compel
the
Committee
in
charge
of
the
Trust
Fund
to
resort
to
that
part
of
the
Trust
Fund
which
is
made
up
of
company
contributions
made
under
Rule
13(b),
until
the
Board
has
so
directed
;
or
to
increase
the
monthly
payments
out
of
other
trust
funds
until
the
actuary
has
so
directed.
On
the
evidence,
it
is
extremely
improbable
that
the
payments
to
Mrs.
Flintoft
out
of
the
Trust
Fund
will
be
increased
during
her
lifetime,
as
she
is
now
in
her
70th
year.
It
is
equally
clear
that
the
balance
of
the
monthly
payments,
amounting
to
$214.00,
is
not
paid
out
of
the
Trust
Fund
or
out
of
any
fund
set
aside
for
the
purpose,
but
is
paid
voluntarily
by
the
company
out
of
its
current
revenues
and
charged
to
working
expenses.
Mrs.
Flintoft
would
have
no
legal
right
to
compel
the
company
to
pay
that
or
any
other
amount
and
if
it
was
discontinued
she
would
be
without
any
remedy.
On
the
principles
followed
in
the
McDougall
case
I
must
reach
the
conclusion
that
the
monthly
pension
of
$214.00
does
not
fall
within
the
original
part
of
subsection
(g).
In
my
opinion,
the
added
part
of
subsection
(g)
was
enacted
for
the
purpose
of
broadening
the
meaning
of
the
opening
words
of
the
original
subsection,
"‘Any
annuity
or
other
interest
purchased
or
provided
by
the
deceased,’’
so
as
to
include
therein
certain
superannuation
or
pension
benefits
or
allowances
which
might
not
be
considered
to
have
been
"‘purchased
or
provided
by
the
deceased,’’
but
which
thereafter
"shall
be
deemed
for
the
purpose
of
this
Act
to
have
been
purchased,
acquired
or
provided
by
the
deceased.’’
Provision
is
made
for
two
classes
of
such
benefits
or
allowances,
namely:
(i)
those
payable
or
granted
under
legislation
of
the
Parliament
of
Canada
or
of
any
province;
and
(ii)
those
payable
or
granted
under
any
other
superannuation
fund
or
plan.
The
dispute
as
to
whether
the
monthly
payment
of
$214.00
falls
within
the
added
part
of
Section
3(1)(g)
centres
around
the
meaning
to
be
attributed
to
the
words
(which
I
shall
refer
to
as
the
"‘whether’’
clause)
—
"‘Whether
the
said
benefits
or
allowances
are
payable
or
granted
out
of
the
revenue
of
His
Majesty
in
respect
of
the
Government
of
Canada
or
of
any
Province
thereof,
or
out
of
any
fund
established
for
the
purpose,’’
Counsel
for
the
appellants
admits
that
such
monthly
payment
falls
within
the
words
‘‘under
any
other
pension
plan,’’
and
that
were
it
not
for
the
provisions
of
the
‘‘whether’’
clause,
which
I
have
just
quoted,
such
payment
would
be
taxable
as
a
suecession.
His
submission,
however,
is
that
full
effect
must
be
given
to
all
the
words
of
the
added
part
and
that
the
whether”
clause
expressly
limits
the
general
words
which
precede
it,
and
that
any
superannuation
or
pension
benefits
or
allowances
not
payable
or
granted
under
any
legislation
of
Canada
or
of
one
of
its
provinces,
but
granted
or
payable
under
any
other
pension
fund
or
plan
is
dutiable
only
if
payable
or
granted
out
of
any
fund
established
for
the
purpose.
In
this
case
he
submits
that
the
payment,
being
merely
voluntary
and
not
payable
out
of
any
‘‘fund
established
for
the
purpose,’’
is
therefore
not
assessable
to
duty.
In
interpreting
a
taxing
Act,
the
Court
must
be
governed
by
the
expressions
used
in
the
Act
itself
and
the
intention
of
Parliament
must
be
gathered
therefrom.
In
Tennant
v.
Smith,
(1892)
A.C.
150,
Lord
Halsbury
said
at
p.
154:
"‘This
is
an
income
tax
Act,
and
what
is
intended
to
be
taxed
is
income.
And
when
I
say
‘what
is
intended
to
be
taxed’,
I
mean
what
is
the
intention
of
the
Act
as
expressed
in
its
provisions,
because,
in
a
taxing
Act
it
is
impossible,
I
believe,
to
assume
any
intention,
any
governing
purpose
in
the
Act,
to
do
more
than
take
such
tax
as
the
statute
imposes.”
In
Salomon
v.
Salomon,
[1897]
A.C.
22,
Lord
Watson
in
considering
the
expression
‘‘intention
of
the
legislature,’’
said
at
p.
38:
“Intention
of
the
legislature’
is
a
common
but
very
slippery
phrase,
which,
popularly
understood,
may
signify
anything
from
intention
embodied
in
positive
enactment
to
speculative
opinion
as
to
what
the
legislature
probably
would
have
meant,
although
there
has
been
an
omission
to
enact
it.
In
a
court
of
law
or
equity,
what
the
legislature
intended
to
be
done
or
not
to
be
done
can
only
be
legitimately
ascertained
from
that
which
it
has
chosen
to
enact,
either
in
express
words
or
by
reasonable
and
necessary
implication.
‘
‘
For
the
respondent
it
is
contended
that
all
such
benefits
or
allowances
payable
or
granted
‘‘under
any
other
superannuation
fund
or
plan’’
are
subject
to
duty
whether
or
not
they
are
payable
or
granted
out
of
a
fund
established
for
the
purpose.
To
support
this
contention
would
mean
that
I
must
either
read
“whether”
as
‘‘whether
or
not,’’
or
limit
the
applicability
of
the
whole
of
the
‘‘whether’’
clause
to
benefits
or
allowances
granted
or
payable
by
the
Parliament
of
Canada
or
by
a
province.
There
can
be
no
doubt,
I
think,
that
the
‘‘whether’’
clause
is
made
applicable
to
all
the
benefits
or
allowances
previously
mentioned
in
the
section
whether
they
be
made
under
legislation
or
‘‘under
any
other
superannuation
or
pension
fund
or
plan.’’
The
words
‘‘the
said
benefits
or
allowances’’
which
follow
immediately
after
‘‘whether’’
refer
back
to
the
‘‘benefits
or
allowances”
previously
mentioned
and
which
are
there
identified
as
being
of
two
classes,
namely,
those
payable
or
granted
under
legislation
and
those
payable
or
granted
‘‘under
any
other
superannuation
or
pension
fund
or
plan.’’
The
first
part
of
the
“whether”
clause
relating
to
the
revenue
of
His
Majesty
can
have
no
application
to
the
payments
made
‘‘under
any
other
fund
or
plan,’’
and
it
would
follow,
therefore,
that
the
remaining
words
‘‘or
out
of
any
fund
established
for
the
purpose’’
must
refer
to
those
payments
made
‘‘under
any
other
superannuation
or
pension
fund
or
plan,’’
although
they
are
not
necessarily
limited
thereto.
I
am
unable
to
agree
with
the
submission
of
counsel
for
the
respondent
that
the
‘‘whether’’
clause
has
no
application
to
this
appeal.
I
think
it
has,
and
later
herein
will
consider
what
effect
should
be
given
to
that
view
of
the
matter.
Nor
do
I
think
that
‘‘whether’’
means
the
same
as
“whether
or
not.’’
The
phrase
‘‘whether
or
not’’
is
a
very
broad
term
indicating
that
no
limit
or
qualification
is
to
be
placed
on
the
preceding
words;
it
is
equivalent
to
‘‘in
any
case’’
or
‘‘in
all
events.’’
It
is
suggested
by
Mr.
Carson
that
if
‘‘whether’’
were
to
be
read
as
“‘whether
or
not,’’
the
‘‘whether’’
clause
would
be
wholly
unnecessary
in
that
it
would
add
nothing
to
the
broad
meaning
of
the
preceding
words,
that
therefore
it
would
be
meaningless
and
such
an
interpretation
should
not
be
adopted.
There
is
much
force
to
that
argument,
but
I
prefer
to
rest
my
opinion
on
what
I
consider
to
be
the
real
meaning
of
"‘whether,’’
when,
as
here,
it
is
followed
by
the
correlative
“or.
9
‘
In
my
view,
it
is
used
here
as
introducing
a
disjunctive
clause
having
a
qualifying
or
conditional
force,
and
when
used
with
the
word
"
"
or’’
is
equivalent
to
"‘in
either
of
the
cases
mentioned.’’
In
my
opinion
it
would
be
improper
to
read
‘‘whether’’
as
meaning
“whether
or
not.’’
To
what
extent,
then,
does
the
‘‘whether’’
clause
qualify
the
preceding
words?
In
my
view,
it
limits
the
taxability
of
such
superannuation
or
pension
benefits
or
allowances
to
those
cases
in
which
the
benefits
or
allowances
are
payable
‘‘out
of
a
fund
established
for
the
purpose,’’
except
in
those
cases
where
they
are
payable
under
legislation
of
Canada
or
a
province,
in
which
latter
cases,
even
if
payable
out
of
revenue,
they
are
made
dutiable.
I
have
stated
above
that
in
my
opinion
the
‘‘whether’’
clause
is
made
applicable
to
the
words
‘‘under
any
other
superannuation
fund
or
plan.’’
It
seems
to
me
that
in
referring
to
“revenue”
of
His
Majesty
and
to
‘‘any
fund
established
for
the
purpose,’’
Parliament
has
indicated
that
not
all
superannuation
or
pension
benefits
or
allowances
should
be
made
dutiable
successions,
but
only
those
where
there
is
reasonable
certainty
that
the
payments
will
be
continued.
In
the
case
of
legislative
payments
that
assurance
is
provided
whether
the
source
be
revenue
or
out
of
an
established
fund;
in
other
cases,
such
assurance
is
provided
only
if
a
fund
for
that
purpose
has
been
established.
Such
a
limitation
in
my
view
is
implicit
in
the
‘‘whether’’
clause.
It
also
seems
to
me
to
be
a
not
unreasonable
limitation,
excluding
from
taxation,
as
I
think
it
does,
those
benefits
or
allowances
which
are
dependent
only
on
a
plan
but
lack
the
assurance
of
continuity
in
payment,
such
as
is
provided
by
the
existence
of
a
fund
or
by
being
payable
out
of
Government
revenue.
If
there
were
no
such
limitations,
it
is
apparent
that
in
many
cases
the
estates
of
decedents
could
be
charged
with
succession
duty
in
respect
of
benefits
or
allowances
to
dependents
which
the
latter
might
never
receive,
or
from
which
they
might
benefit
for
but
a
short
period.
It
is
of
some
interest
to
note
that
in
the
Province
of
Nova
Scotia
the
Succession
Duty
Act,
1945,
e.
7,
s.
3(2)
(g)
was
amended
by
Statutes
of
1946,
ec.
53,
by
adding
thereto
the
following
:
“including
superannuation
or
pension
benefits
or
allowances
whether
contractual
or
gratuitous
payable
or
granted
under
legislation
of
the
Parliament
of
Canada
or
of
any
Province
or
under
any
other
superannuation
or
pension
fund
or
plan
where
the
said
benefits
or
allowances
are
payable
or
granted
out
of
the
revenue
of
His
Majesty
in
respect
of
the
Government
of
Canada
or
of
any
Province
or
out
of
any
fund
established
for
the
purpose
or
otherwise,
which
benefits
or
allowances
shall,
for
the
purposes
of
this
Act,
be
deemed
to
have
been
purchased,
acquired
or
provided
by
the
deceased.’’
It
will
be
noted
that
the
wording
is
very
similar
to
the
added
part
of
Section
3(1)
(g)
of
the
Dominion
Act,
but
that
the
words
‘‘whether
contractual
or
gratuitous’’
follow
the
words
‘‘benefits
or
allowances’’;
that
‘‘where’’
replaces
the
word
‘‘whether’’
as
used
in
the
Dominion
Act,
and
that
the
words
‘‘or
otherwise”?
follow
the
expression
‘‘or
out
of
any
fund
established
for
the
purpose.’’
These
variations
are
of
great
significance
and
I
think
it
may
be
assumed
that
if
the
words
‘‘or
otherwise’’
were
also
in
the
Dominion
Act,
the
appeal
herein
would
fail.
My
conclusion,
therefore,
is
that
the
monthly
payment
of
$214.00
to
Mrs.
Flintoft,
not
being
payable
or
granted
out
of
the
Pension
Trust
Fund
or
out
of
any
other
fund
established
for
the
purpose,
but
being
a
voluntary
payment
made
by
the
company
out
of
its
revenue,
does
not
fall
within
the
provisions
of
Section
3(1)
(g)
and
is
not
a
‘‘succession’’
under
any
provision
of
the
Act.
The
appeal
will
therefore
be
allowed
and
there
will
be
a
declaratio
:
(1)
That
the
only
part
of
the
monthly
payment
to
Mrs.
Flintoft
which
is
subject
to
payment
of
succession
duties
is
the
capitalized
value
of
that
part
thereof
which
is
payable
out
of
the
Canadian
Pacific
Railway
Pension
Trust
Fund,
which
capitalized
value
by
agreement
of
the
parties
is
fixed
at
$2,108.00;
(2)
That
the
appellants
are
entitled
to
be
repaid
the
difference
between
such
amount
as
they
have
paid
under
the
assessment
relating
to
the
whole
of
the
said
pension,
and
the
amount
properly
assessable
on
the
monthly
payment
of
$16.74,
payable
out
of
the
Canadian
Pacific
Railway
Company
Trust
Fund,
having
a
capitalized
value
of
$2,108.00.
During
the
course
of
the
trial,
counsel
for
the
appellants
intimated
that
such
difference
amounted
to
$2,842.93
but
I
do
not
think
that
counsel
for
the
respondent
agreed
thereto.
If
the
parties
are
unable
to
agree
on
the
amount,
there
will
be
a
reference
back
to
the
Minister
for
the
purpose
of
amending
the
assessment
in
accordance
with
my
finding.
I
should
state
further
that
by
the
stipulation
of
the
parties
duly
filed,
it
has
been
agreed
that
while
in
the
original
assessment
in
respect
of
the
whole
pension
its
capitalized
value
was
fixed
at
$29,056.13,
that
valuation
was
in
error
and
should
have
been
fixed
at
$16,000.00.
The
appellants
are
also
entitled
to
their
costs
after
taxation,
and
to
payment
out
of
the
amount
deposited
for
security
for
costs.
Judgment
accordingly.
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