Supreme Court of Canada
London (City) et al. v. St. Thomas (City) et al., [1958] S.C.R. 49
Date: 1958-04-01
The Corporation of the
City of London, the London
Railway Commission and the London and Port Stanley Railway Company (Plaintiff)
Appellants;
and
The Corporation of the
City of St. Thomas (Defendant) Respondent.
The Corporation of
the City of London, the London
Railway Commission and the London and Port Stanley Railway Company (Plaintiff)
Appellants;
and
The Corporation of the
Township of Yarmouth (Defendant) Respondent.
The Corporation of the
City of London, the London
Railway Commission and the London and Port Stanley Railway Company (Plaintiff)
Appellants;
and
The Corporation of the
Village of Port Stanley (Defendant) Respondent.
Present: Kerwin C.J. and Rand, Locke,
Cartwright and Fauteux JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR
ONTARIO.
Taxation—Municipal real property
assessment—Effect of amendment of ss. 4(9) and 39 of The Assessment Act, R.S.O.
1950, c. 24, by 1952, c. 3, ss. 1(1), 10.
Under the relevant legislation the lands
owned by The London and Port Stanley Railway Company were leased by it to the
City of London and managed and controlled by the London Railway Commission.
Held: The
effect of the 1952 amendments to ss. 4(9) and 39(1) of The Assessment Act was
that these lands, although they were previously assessable and taxable as
“land…leased by…a municipal corporation” became exempt from taxation on the
coming into force of the 1952 amendments.
[Page 250]
Generally speaking, the interests of an owner
and of a tenant are not valued separately under The Assessment Act for
purposes of assessment or taxation, and it is only in special cases, such as
those referred to in ss. 21 and 32, that the tenant is assessed or deemed to be
the owner. The words “land” and “lands” as used in s. 39, as re-enacted, are
not to be interpreted as including leasehold interests, notwithstanding the
provisions of s. 1(g) of The Municipal Act and s. 33 of The
Interpretation Act.
APPEALS from the judgments of the Court of
Appeal for Ontario, in three appeals
argued together. Appeals allowed.
W.B. Williston, Q.C., and J.D. Taylor,
for the appellants.
J.J. Robinette, Q.C., and D.K. Laidlaw,
for the respondents.
The judgment of the Court was delivered by
THE CHIEF JUSTICE:—These are appeals by the
Corporation of the City of London, the London Railway Commission and the London
and Port Stanley Railway Company from three orders of the Court of Appeal for
Ontario, in one
of which the Corporation of the City of St. Thomas is respondent, in
another of which the Corporation of the Township of Yarmouth is respondent, and
in the third of which the Corporation of the Village of Port Stanley is
respondent. One point in connection with the City of St. Thomas will be mentioned and dealt with later, but, in the meantime, the
appeals with respect to the three municipalities may be considered together.
The proceedings commenced with applications to
the courts of revision of the several municipalities under s. 124 of The
Assessment Act, R.S.O.1950, c. 24, the applicable part of which reads as
follows:
124. (1) An application to the court of
revision for the abatement or refund of taxes levied in the year in respect of
which the application is made may be made by any person…
(f) in respect of land which has
become exempt from taxation during the year…
In each case the London and Port Stanley Railway Company was registered as owner of the
“land”.
[Page 251]
That company was incorporated by c. 133 of the
1853 statutes of Canada. The
City of London, by its holding
of shares and bonds with share-voting rights, owned in 1952, and now holds, a
majority of the share-voting rights in the company. By c. 103 of the Ontario statutes of 1913 the City of London was empowered to enter into a lease
with the railway company for a lease of the railway and to operate the same. By
statute of Canada 1914, c. 96, a 99-year lease and agreement, dated November
28, 1913, from the company to the Corporation of the City of London was
confirmed “and the whole management and control of the making, completion,
equipment, operation, alteration and maintenance of the said The London and
Port Stanley Railway for, and as the agents of, the Corporation” was entrusted
to a body corporate known as The London Railway Commission. The lease set forth
in a schedule to the Act was given “subject to all the rents, conditions,
provisos and agreements” mentioned in it and by para. 6 of the said lease it
was provided that:
The parties of the second part [The
Corporation of the City of London] shall pay all taxes, rates, duties and
assessments whatsoever, whether municipal, parliamentary, or otherwise, or
which may or shall during the term aforesaid, be charged upon the said The
London and Port Stanley Railway or its appurtenances, or upon the said parties
of the first part [The London and Port Stanley Railway Company] on account
thereof, or on account of any of its property.
By Ontario statute 1950, c. 105, ss. 7 and 8, it was enacted:
7. The Corporation of the City of London is hereby authorized and empowered,
in addition to all other powers now vested in it, to acquire, operate and
dispose of the undertaking and assets of The London & Port Stanley Railway
Company, or any part thereof, and such authority and powers may be, by by-law,
delegated to The London Railway Commission.
8. The Corporation of the City of London is
hereby authorized and empowered and declared to have had the authority and
power to acquire, use, hold and dispose of lands, premises, buildings and
equipment throughout the County of Middlesex and the County of Elgin for the
purposes of or in any way used in connection with the operation of The London &
Port Stanley Railway or the advancement of the business thereof.
It may be added that (although this occurred
after 1952) there is an Ontario statute, 1953, c. 118, ratifying and confirming
an agreement of October 23, 1952, between the City of London and Canadian
National Realties Limited and another, by the terms of which the City became
the owner of the Canadian National company’s 2,347 shares
[Page 252]
of the railway company, and it was agreed that,
upon obtaining the necessary statutory authority, all the assets and
undertaking of the railway should be transferred to the city. All parties to
these proceedings agree that no such transfer may be made without a special Act
of the Parliament of Canada and this has not been obtained.
In the year 1951 the City of St. Thomas
assessed the railway company as owner of certain lands within its limits; the
Village of Port Stanley assessed the railway company and the City of London as
owners of certain lands within the limits of that municipality; and the
Township of Yarmouth assessed the railway company and the City of London as
owners of certain lands within its limits. In each case in 1952 the taxes
imposed for that year on the lands assessed in 1951 were paid by the London
Railway Commission to the assessing municipality and it was for a refund of
these taxes that the applications were made under s. 124 of The Assessment
Act. The applications went through the regular channels and were ultimately
granted by the Ontario Municipal Board, but the latter’s orders were set aside
by the Court of Appeal. The present appellants allege that by virtue of certain
provisions of The Assessment Act, as amended in 1952, the real property
upon which the taxes had been paid had become exempt from taxation during the
year 1952. The validity of that contention depends upon the proper construction
of s. 4(9) and s. 39 of the Act, as amended by 1952, c. 3, which amendments,
although assented to on April 10, 1952, were by virtue of s. 21 of the amending
Act deemed to have come into force on January 1, 1952.
At the time of the assessments in 1951, s. 4(9)
of The Assessment Act read as follows:
4. All real property in Ontario shall be liable to taxation subject
to the following exemptions:…
9. Except as provided in sections 39
and 40, the property belonging to or leased by any county or municipality or
vested in or controlled by any public commission wherever situate and whether
occupied for the purposes thereof or unoccupied; but not when occupied by a
tenant or lessee, nor when used for parking vehicles where a, fee is charged
for such parking.
As to the exceptions referred to, we are
concerned only with subs. (1) of s. 39:
39. (1) Land owned or leased by or vested
in a municipal corporation or commission or in trustees or any other body
acting for and on behalf of a municipal corporation and used for the purpose of
supplying water,
[Page 253]
light, heat or power to the inhabitants of
the municipality, or for the purposes of a transportation system or telephone
system shall be liable to assessment and taxation for municipal and school
purposes in the municipality in which it is situate at its actual value,
according to the average value of land in the locality.
By the amending Act of 1952, para. 9 of s. 4 was
amended by striking out the words at the commencement thereof “Except as
provided in sections 39 and 40”; and s. 39 was repealed and the following
substituted therefor:
39. (1) In this section,
(a) “commission” means the
council of a municipal corporation, or a commission or trustees or other body,
operating a public utility for or on behalf of the corporation;
(b) “public utility” means a public
utility as defined in The Department of Municipal Affairs Act.
(2) For the purposes of this section, land
and buildings owned by and vested in a municipal corporation and used for the
purposes of a public utility shall be deemed to be vested in the commission
operating the public utility.
(3) Every commission shall pay in each
year, to any municipality in which are situated lands or buildings owned by and
vested in the commission and used for the purposes of the public utility it
operates, the total amount that all rates, except, subject to
subsections 4 and 5, rates on business assessment, levied in that
‘municipality for taxation purposes based on the assessed value of the land at
the actual value thereof according to the average value of land in the locality
and the assessed value of such buildings, would produce.
* * *
(10) The provisions of this
section shall apply notwithstanding anything in this or any other general
or special Act or any agreement heretofore made and any agreement heretofore
made, under which a commission pays taxes, or money in lieu of taxes or for
municipal services, shall be void.
By s. 1(g) of The Department of
Municipal Affairs Act, R.S.O. 1950, c. 96 (referred to in para. (6) of s.
39(1)) “public utility” is defined as including:
...any street or other railway system…which
[is] vested in or owned, controlled or operated by a municipality or
municipalities or by a local board.
It appears to be clear that if the latter part
of s. 4(9) of The Assessment Act before the 1952 amendments had stood
alone, the lands of the railway company, which had been leased by the City of
London, would have been exempt from taxation, because such lands were
“property...leased by [a]…municipality”. However, that provision commenced
“Except as provided in sections 39 and 40”, and the effect of the
exception in s. 39(1) was that such lands were assessable and taxable as
“land…leased by…a municipal corporation”.
[Page 254]
By the amendments in 1952, the words quoted
above at the commencement of s. 4(9) were stricken out and in the new s. 39 the
only provision for the payment of rates is in connection with lands or
buildings “owned by and vested in the commission”, which, by virtue of subs.
(2), applies only to “land and buildings owned by and vested in a municipal
corporation”. Undoubtedly the words “owned” and “owner” may be susceptible of
different meanings, depending upon the subject-matter under consideration. That
is shown by the cases referred to in the reasons for judgment of the majority
of the Court of Appeal, although it might be pointed out that the decision of
the Divisional Court in York et al. v. Township of Osgoode et al. was reversed by the Court of Appeal and that it was the latter’s judgment which
was affirmed by this Court. The
distinction between an owner and tenant in the law of real property is well
known and is recognized by s. 1(o) of The Assessment Act:
(o) “tenant” includes occupant and
the person in possession other than the owner.
Generally speaking, under The Assessment Act the
interest of an owner and of a tenant are not valued separately for the purposes
of assessment or taxation. In s. 21 the Legislature is concerned with farmers
and their relatives. Section 32, relating to the assessment of Crown
lands, is dealing with a specific subject and there the tenant of such lands is
to “be assessed in respect of the land in the same way as if the land was owned
or the interest of the Crown was held by any other person”. I cannot agree that
the majority of the Court of Appeal were justified in relying upon subs. (10)
of s. 30:
(10) Where land is assessed against a
tenant under subsection 4 or 9, the tenant, for the purpose of imposing
and collecting taxes upon and from the land, shall be deemed to be the owner.
Under this provision the tenant is deemed to be
the owner only for the purpose of imposing and collecting taxes upon and from
the land which has been assessed against the tenant under subs. (4) or (9), the
first of these providing that occupied land owned by a person who is not a
resident in the municipality shall be assessed against the owner, if
[Page 255]
known, and against the tenant, and the second
providing for the case of joint owners one of whom is not resident in the
municipality and particularizing what is to happen if the land is occupied by
any of the owners or if it is unoccupied.
It was argued that in any event the City of
London is the owner of the lease; that “land” in s. 39(2) and “lands” in
s. 39(3), enacted by 1952, c. 3, s. 10, included a leasehold interest by virtue
of the combined operation of s. 33 of The Interpretation Act, R.S.O.
1950, c. 184:
33. The interpretation section of The
Municipal Act shall extend to all Acts relating to municipal matters.
and s. 1(g) of The Municipal
Act, R.S.O. 1950, c. 243:
1. In this Act,…
(g) “land” includes lands,
tenements and hereditaments, and any estate or interest therein, and any right
or easement affecting them, and land covered with water.
However, s. 1 of The Interpretation Act enacts:
1. The provisions of this Act shall apply
to every Act of the Legislature contained in these Revised Statutes or
hereafter passed, except in so far as any such provision,
(a) is inconsistent with the intent
or object of the Act; or
(b) would give to any word,
expression or clause of the Act an interpretation inconsistent with the
context; or
(c) is in the Act declared not
applicable thereto
and s. 2 provides:
2. Where an Act contains an interpretation
section or provision, it shall be read and construed as subject to the
exceptions contained in section 1.
To give to “land” or “lands” in s. 39(2) and
(3), as enacted in 1952, the meaning contended for by the respondents would be
both inconsistent with the intent or object of The Assessment Act and
would give to those words an interpretation inconsistent with the context.
Upon a consideration of The Assessment Act in
its entirety, even before the 1952 amendments, I am of opinion that a lease to
the City of London for 99 years
did not place that municipality in the position of an owner. I am also of
opinion that the effect of those amendments is to exempt from taxation the
railway property leased by the City of London because it is not “owned by and vested in”
[Page 256]
the City. I have not overlooked s. 18 of The
Interpretation Act:
18. The amendment of an Act shall not be
deemed to be or to involve a declaration that the law under such Act was, or
was considered by the Legislature to have been, different from the law as it
has become under such Act as so amended.
But this cannot apply if the meaning of the Act
as amended and read as a whole is clear, as in my view it is.
The special point with reference to the appeal
as against the City of St. Thomas relates to the powers of the Ontario Municipal Board. It was argued
that on June 24, 1954, the Board gave a decision which, not having been
appealed from, prevented the Board from reconsidering the matter and making its
order of October 18, 1955.
However, for the reasons given by Hogg J.A., with whom the other two members of
the Court of Appeal agreed, there is no substance in the point, since the Board
had power to vary its order as provided by s. 46 of The Ontario Municipal
Board Act, R.S.O. 1950, c. 262, as amended. This view, however, does not
affect the proper disposition of the appeals, which should be allowed, the
orders of the Court of Appeal set aside and those of the Board restored. These
latter have the effect of directing a refund of the 1952 taxes paid to each of
the respondents. The appellants are entitled to their costs in this Court and
in the Court of Appeal.
Appeals allowed with costs throughout.
Solicitors for the appellants: Fasken,
Robertson, Aitchison, Pickup & Calvin, Toronto.
Solicitor for the respondents: W. Scott
McKay,St. Thomas.
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