Board of Trustees of Separate School in Seneca Township and Village of Cayuga v. Township of Seneca, [1964] SCR 569

Supreme Court of Canada

Board of Trustees of Separate School in Seneca Township and Village of Cayuga v. Township of Seneca, [1964] S.C.R. 569

Date: 1964-06-03

The Board of Trustees of the Roman Catholic Union Separate School for the United Sections Number 11 in the Township of Seneca and the Village of Cayuga (Applicant) Appellant;

and

The Corporation of the Township of Seneca (Respondent) Respondent.

1964: May 4; 1964: June 3.

Present: Cartwright, Abbott, Judson, Hall and Spence JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Taxation—Lands and building owned by school board ceasing to be used as a school—School remaining closed and property not used for any purpose—Whether liable to taxation—The Assessment Act, R.S.O. 1960, c. 23, s. 4, as amended, 1960-61 (Ont.), c. 4, s. 1; 1961‑62 (Ont.), c. 6, s. 1.

[Page 570]

The appellant school board acquired a school site in March of 1959 and built on it a one‑room school which came into use in December 1959. In December 1961 the board ceased to use the building as a school. From that date the building remained vacant and was not used for any purpose. On July 31, 1962, the respondent township entered the lands and building on the collector’s roll as having ceased to be exempt from taxation for the balance of the year 1962, and further, assessed the lands and building for the year 1963 as taxable property.

An application was made by the board to the Supreme Court of Ontario for an order declaring that the lands in question were exempt from taxation pursuant to the provisions of The Assessment Act. The Chief Justice of the High Court made this declaration. His judgment was reversed by a majority decision of the Court of Appeal. An appeal was then brought to this Court pursuant to leave granted by the Court of Appeal.

Held (JUDSON J. dissenting): The appeal should be allowed.

Per Cartwright, Abbott, Hall and Spence JJ.: The appellant’s lands, although unoccupied, were exempted from taxation by the plain words of clause 9 of s. 4 of The Assessment Act, it not having been shown that it was “otherwise provided in this or any other Act”. The circumstance that, because the condition prescribed as to use had not been fulfilled, the wording of clause 4 was not apt to entitle the appellant to exemption under that clause fell short of providing that it shall not be entitled to exemption under the plain words of clause 9, the application of which depends on ownership and not upon use.

Per Judson J., dissenting: Paragraph 9 of s. 4 of The Assessment Act was amended in 1962 by the addition of the words “and except as otherwise provided in this or any other Act”. Exemption was thus given to the property of a school board except as otherwise provided in this or any other Act. This put the two assessments with which this appeal was concerned under para. 4 of s. 4, as that was the only possible reference to anything otherwise provided in this Act.

The result was that para. 9 does not operate to confer exemption in two cases: (a) Where public utility commissions and municipal parking authorities are concerned. These are subject to s. 43 of the Act; (b) Where the case falls within para. 4 of s. 4 for there it is otherwise provided. Therefore, under para. 4 of s. 4, if buildings and grounds cease to be used and occupied as a school, they lose their exemption.

APPEAL from a judgment of the Court of Appeal for Ontario[1], reversing a judgment of McRuer C.J.H.C. Appeal allowed, Judson J. dissenting.

D.F. McDonald, Q.C., and J.W. Morden, for the appellant.

H. Turkstra, for the respondent.

The judgment of Cartwright, Abbott, Hall and Spence JJ. was delivered by

[Page 571]

CARTWRIGHT J.:—There is no dispute as to the facts out of which this appeal arises.

In March 1959, the appellant purchased the lands which the respondent seeks to tax and later in that year erected thereon a one-room school for the teaching of all eight grades of elementary education. Until December 1961, the lands and building were used and occupied by the appellant as a school. On the last-mentioned date the teacher employed at the school left the appellant’s employment and the students of the school were transferred elsewhere. Since then the school has remained closed and the lands and building have not been used for any purpose. They are not leased to anyone but continue in the appellant’s ownership.

The respondent has taken the necessary steps to assess and tax these lands if, on the true construction of The Assessment Act, they are liable to taxation.

The appellant applied by originating notice to the Supreme Court of Ontario for an order declaring that the lands in question were exempt from taxation. The motion was heard by McRuer C.J.H.C. who made the order asked for without recorded reasons.

The Court of Appeal¹, by a majority, reversed this order and directed that the originating motion be dismissed with costs throughout. Kelly J.A., dissenting, would have dismissed the appeal with costs.

The appellant appeals to this Court pursuant to leave granted by the Court of Appeal. The operative part of the order granting leave reads as follows:

1. THIS COURT DOTH ORDER that leave to appeal to the Supreme Court of Canada from the Order of this Court made on June 5th, 1963, be and the same is hereby given on condition that, regardless of the outcome of the said appeal, no costs of the said appeal shall be awarded against the Respondent, The Corporation of the Township of Seneca.

In this Court, for the first time, counsel for the respondent sought to raise the objection that the proceedings were not properly commenced by way of originating notice. The Court over‑ruled this objection at the hearing, being of opinion that the case falls within the terms of R. 612(1)(b) reading as follows:

612(1) Where the rights of the parties depend,…

(b) upon undisputed facts and the proper inference from such facts, such rights may be determined upon originating notice.

[Page 572]

The relevant provisions of The Assessment Act, R.S.O. 1960, c. 23, as amended, in force at the time at which the rights of the parties are to be determined, are as follows:

4. All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:...

4. The buildings and grounds of and attached to or otherwise bona fide used in connection with and for the purposes of a university, high school, public or separate school, whether vested in a trustee or otherwise, so long as such buildings and grounds are actually used and occupied by such institution, but not if otherwise occupied.

(a) The exemption from taxation under this paragraph does not apply to lands rented or leased to an educational institution mentioned in this paragraph by any person other than another such institution.

* * *

9. Subject to section 43 and except as otherwise provided in this or any other Act, the property belonging to any county or municipality or vested in or controlled by any public commission or local board as defined by The Department of Municipal Affairs Act, including a municipal parking authority, wherever situate and whether occupied for the purposes thereof or unoccupied but not when occupied by a tenant or lessee.

The wording of clause 4 of the exemptions has remained unaltered for some years but clause 9 has recently been twice amended.

In R.S.O. 1960, c. 23, it read as follows:

9. Subject to section 43, the property belonging to any county or municipality or vested in or controlled by any public commission, including a municipal parking authority, wherever situate and whether occupied for the purposes thereof or unoccupied but not when occupied by a tenant or lessee.

By s. 1(2) of c. 4 of the 1960-61 Statutes, the words “or local board as defined by The Department of Municipal Affairs Act” were inserted after the word “commission”; and by s. 1 of c. 6 of the 1961-62 Statutes the words “and except as otherwise provided in this or any other Act” were inserted after “43”.

It is common ground that the appellant is a “local board as defined by The Department of Municipal Affairs Act”; the lands sought to be taxed are vested in and controlled by it and therefore, although unoccupied, are exempted from taxation by the plain words of clause 9 unless it can be shewn that it is “otherwise provided in this or any other Act”. Counsel for the respondent submits that it is otherwise provided by clause 4 of the exemptions; this submission found favour with the majority in the Court of Appeal but I am unable to agree with it.

[Page 573]

The words of clause 4 of the exemptions do not impose taxation on anything, they prescribe an exemption from taxation of buildings and grounds conditional upon their being used and occupied for certain educational purposes; their application depends primarily on use rather than ownership. The words which impose taxation are the opening words of s. 4 which have already been quoted: “All real property in Ontario is liable to assessment and taxation subject to the following exemptions from taxation:” When the section is read as a whole it is clear that these opening words impose taxation only upon such real property in Ontario as does not fall within any of the eighteen exempting clauses; they do not impose it on the appellant’s lands because those lands are exempt by the words of clause 9. The circumstance that, because the condition prescribed as to use has not been fulfilled, the wording of clause 4 is not apt to entitle the appellant to exemption under that clause appears to me to fall short of providing that it shall not be entitled to exemption under the plain words of clause 9, the application of which depends on ownership and not upon use.

For these reasons I have reached the conclusion that clause 9 of the exemptions governs this case as it has not been shewn that it is otherwise provided in The Assessment Act or in any other Act.

I would allow the appeal, restore the order of McRuer C.J.H.C. and direct that the appellant recover its costs in the Court of Appeal from the respondent; in view of the terms of the order granting leave to appeal I would make no order as to costs in this Court.

JUDSON J. (dissenting):—The appellant trustees acquired a school site in March of 1959 and built on it a one-room school which came into use in December 1959. In December 1961 they ceased to use the building as a school. From that date the building remained vacant and was not used for any purpose. On July 31, 1962, the respondent township entered the lands and building on the collector’s roll as having ceased to be exempt from taxation for the balance of the year 1962, and further, assessed the lands and building for the year 1963 as taxable property. In these proceedings the trustees are claiming a declaration that the land and premises are not liable to assessment and taxation. The

[Page 574]

Chief Justice of the High Court made this declaration. His judgment was reversed on appeal, Kelly J.A. dissenting. The appeal comes to this Court pursuant to leave granted by the Ontario Court of Appeal.

Section 4 of The Assessment Act, R.S.O. 1960, c. 23, provides as follows: “All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:” Then follow 18 paragraphs setting out the exemptions. The first one that requires consideration is para. 4, which reads:

4. The buildings and grounds of and attached to or otherwise bona fide used in connection with and for the purposes of a university, high school, public or separate school, whether vested in a trustee or otherwise, so long as such buildings and grounds are actually used and occupied by such institution, but not if otherwise occupied.

It is common ground that but for an amendment made to a subsequent paragraph in 1961, the case would fall to be decided under this paragraph and that the taxes for the year 1962, based upon the additional assessment of July 31, 1962, would be payable, and also for the year 1963.

However, the trustees contend that an amendment to para. 9 of s. 4 enacted in the year 1961 produces a different result. Subsection 9, as amended by 1960-61 (Ont.), c. 4, s. 1, reads:

9. Subject to section 43, the property belonging to any county or municipality or vested in or controlled by any public commission or local board as defined by The Department of Municipal Affairs Act, including a municipal parking authority, wherever situate and whether occupied for the purposes thereof or unoccupied but not when occupied by a tenant or lessee.

The amendment enacted by this legislation was the addition of the underlined words “or local board as defined by The Department of Municipal Affairs Act”. The Department of Municipal Affairs Act, R.S.O. 1960, c. 98, s. 1(d) includes a school board in the definition of “local board”. Therefore, immediately following this amendment we have one paragraph of the exemptions saying that this school is not exempt from assessment and taxation because it is no longer used as a school, and another section saying that property belonging to a school board is exempt from taxation. The

[Page 575]

following year para. 9 was further amended by 1961-62 (Ont.), c. 6, s. 1. It now reads:

9. Subject to section 43 and except as otherwise provided in this or any other Act, the property belonging to any county or municipality or vested in or controlled by any public commission or local board as defined by The Department of Municipal Affairs Act, including a municipal parking authority, wherever situate and whether occupied for the purposes thereof or unoccupied but not when occupied by a tenant or lessee.

The amendment was in the addition of the words “and except as otherwise provided in this or any other Act”. The 1962 amendment came into force on April 18, 1962, a date prior to either of the two assessments with which we are concerned in this appeal.

The question for determination is, what did the Legislature do when it gave exemption to the property of a school board except as otherwise provided in this or any other Act? I agree with the majority opinion in the Court of Appeal that this puts these assessments under para. 4 of s. 4. That is the only possible reference to anything otherwise provided in the Act. The result is that

Paragraph 9 does not operate to confer exemption in two cases:

(a) Where public ultility commissions and municipal parking authorities are concerned. These are subject to s. 43 of the Act;

(b) Where the case falls within para. 4 of s. 4 for there it is otherwise provided.

Therefore if buildings and grounds cease to be used and occupied as a school, they lose their exemption.

I would dismiss the appeal for the reasons given by Aylesworth J.A. There should be no order as to costs.

Appeal allowed, JUDSON J. dissenting.

Solicitors for the appellant: McKenna & Whelan, Hamilton.

Solicitor for the respondent: Herman Turkstra, Hamilton.