Supreme Court of Canada
Minister of Municipal Affairs (N.B.) v. Canaport Ltd.,
[1976] 2 S.C.R. 599
Date: 1975-12-19
Minister of
Municipal Affairs of the Province of New Brunswick and The Provincial
Secretary of the Province of New Brunswick Appellants;
and
Canaport Limited Respondent.
1975: November 10; 1975: December 19.
Present: Laskin C.J. and Martland, Ritchie,
Dickson and Beetz J.J.
ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION
Assessment—Real property—Storage tanks and
sub-structures—Assessment Act, 1965-66 (N.B.), c. 110, ss. 1(g), 18.
Respondent’s property which was assessed as
“real property” consisted of an oil terminal on which were constructed various
facilities consisting of ten welded steel plate tanks for storage of crude petroleum
each having 250,000 barrel capacity, a ballast water tank of 100,000 barrel
capacity, a water tank for fire fighting purposes and various other tanks.
Respondent alleged that it was entitled to a “tax concession” in relation to
these properties under s. 18 of the Assessment Act, 1965-66 (N.B.),
c. 110, by virtue of being a subsidiary of Irving Oil Refining Limited and
entitled to the concession conferred by the Irving Refining Limited Act, 1958
(N.B.), c. 72, but the trial judge and the Appeal Division were both
satisfied that under s. 18(2) of the Assessment Act the concession
only applied to companies in existence before November 19, 1965, and that the
respondent, incorporated on July 2, 1968, was not entitled to it. There were
further concurrent findings in both Courts that the ten tanks were structures
providing shelter for moveable property (i.e. that they constituted
“buildings” and fell to be assessed as “real property” within the meaning of
s. 1(g)(ii) of the Assessment Act) but that they came within the exclusion
in s. 1(g)(v). As a result a declaration was granted that the ten tanks
were not “real property” within the meaning of the Assessment Act and
not taxable as such under that Act.
Held: The
appeal should be allowed.
Having decided that the ten storage tanks are
to be treated as ‘buildings’ for the purposes of the Act, there
[Page 600]
is no room for the inquiry as to whether or
not they are ‘machinery, equipment, apparatus and installations’ other than
those for providing services to buildings. In the context of s. 1(g) of
the Assessment Act the word ‘installations’ must be construed ejusdem
generis with the words ‘machinery, equipment and apparatus’ which precede
it and thus connotes something quite separate and distinct from a ‘building’ or
‘buildings’ as those words are used elsewhere in s. 1(g). These tanks
could not be converted from ‘buildings’ in terms of s. 1(g)(ii) into
‘machinery, equipment, apparatus and installations’ by reason that the crude
oil from them was delivered by a pipeline to a refinery of a different company
some miles away. The other tanks, likewise providing shelter for moveable
property, are also assessable without regard to the reason for which the
shelter is provided.
Acadian Pulp and Paper Ltd. v. Minister of
Municipal Affairs (1973), 6 N.B.R. (2d) 755
distinguished.
APPEAL from a judgment of the Supreme Court of New Brunswick,
Appeal Division, allowing in part an appeal from a judgment of Barry J. at
trial. Appeal allowed.
D.K. Laidlaw, Q.C., and David Norman, for
the appellants.
P.B.C. Pepper, Q.C., Donald GilIis, Q.C.,
and Ian Whitcomb, for the respondents.
The judgment of the Court was delivered by
RITCHIE J.—This is an appeal from a judgment of
the Appeal Division of the Supreme Court of New Brunswick allowing in part an
appeal from the judgment rendered at trial by Mr. Justice Barry whereby he
had granted a declaration that the respondent’s tanks with the substructures
thereunder including the mounds, moats, pads, gravel fill, dikes, and holding
ponds were not assessable for real property or business tax purposes under the Assessment
Act, 1965-66 (N.B.), c. 110. The effect of the judgment of the Appeal
Division was to limit this declaration to the tanks in question.
The respondent’s property, which was assessed as
“real property” under the Assessment Act, is described as follows in the
reasons for judgment
[Page 601]
delivered on behalf of the Court of Appeal by
Chief Justice Hughes:
Canaport Limited is the owner of an Oil
terminal at Mispec Point in the City of Saint John on which are constructed
various facilities (herein referred to as the ‘Canaport facilities’). These
consist of (a) ten welded steel plate tanks used for the storage of crude
petroleum received from oil tankers which are moored some 4,000 feet off shore
when discharging their cargoes. Each tank is 180 feet in diameter, 56 feet in
height and has a capacity of 250,000 barrels. They are constructed on site and
each rests on a concrete ring wall enclosing an asphalt covered gravel base.
The primary purpose of these tanks is to contain crude oil which is discharged
from oil tankers and subsequently pumped from the storage tanks to the oil
refinery of Irving Refinery Limited some five and one‑half miles distant
where the oil is further processed; a secondary purpose is to provide storage
facilities for crude oil for transport by tankers to other refineries. On each
tank is a floating steel roof for the purpose of reducing evaporation of oil
and the abatement of pollution of the atmosphere; (b) a ballast water tank
having a capacity of 100,000 barrels, the purpose of which is to receive and
hold ballast water discharged from crude oil tankers before they are loaded
with oil from the storage tanks; (c) a water tank for fire fighting purposes;
(d) three tanks having an estimated capacity of 500 to 1,000 barrels used in
the process of removing oil from ballast water and (e) a tank for the storage
of fuel oil used to fire a furnace located in a small building on the site
which heats oil circulating through coils in the ballast water tank and the
water tank used for fire fighting purposes.
By its Statement of Claim the appellant alleged
that it was entitled to a “tax concession” in relation to these properties
under s. 18 of the Assessment Act by virtue of its being a
subsidiary of Irving Oil Refining Limited and thereby entitled to the
concession conferred upon the latter company by the “Irving Refining Limited
Act”, 1958 (N.B.) c. 72, but the trial judge and the Appeal Division were
both satisfied that under s. 18(2) of the Assessment Act the
concession only applied to companies which were in existence before November
19, 1965, and that as the responent was not incorporated until July 2, 1968, it
was not entitled to a tax concession under the statute in question. I would not
disturb this finding and am satisfied
[Page 602]
that the question for determination before this
Court is whether the properties in question are assessable as “real property”
within the meaning of s. 1(g) of the Assessment Act which reads as
follows:
1. (g) ‘real property’ means
(i) land, or
(ii) land and buildings including
machinery, installations and equipment for providing services to the buildings,
and where a building is erected on land under lease, licence or permit, such
building may for the purposes of this Act, be treated as real property separate
from the land,
but excludes
(v) structures other than buildings, not
providing shelter for people, plant or moveable property, and all machinery,
equipment, apparatus and installations other than those for providing services
to buildings as mentioned in subclause (ii) whether or not the same are affixed
to land and buildings.
Both the trial judge and the Appeal Division
found that the ten petroleum storage tanks were “structures” which in fact
provided shelter for moveable property and despite the contention so forcefully
advanced on behalf of the respondent to the effect that the floating roofs on
the tanks did not constitute “shelter”, I would not interfere with the
concurrent findings of both Courts in this regard. In my view the words
“structures other than buildings not providing shelter for people, plant or
other moveable property” as used in the exclusion would have been meaningless
surplusage unless it had been intended that the structures which did provide
such shelter constituted “buildings” and were therefore assessable as “real
property” within the meaning of s. 1(g)(ii) of the Assessment Act. I
am accordingly of opinion that the finding that the tanks were structures
providing shelter for moveable property is tantamount to a finding that they
are “real property” within the meaning of the Act.
Faced with this finding, the respondent has
assumed the onus of satisfying the Court that its tanks come within the
exclusion provided by s. 1(g)(v) on the ground that they constitute
“machi-
[Page 603]
nery, equipment, apparatus and installations”
within the meaning of the section, and to this end Chief Justice Hughes has
invoked and relied upon the decision in Acadian Pulp and Paper Limited v.
Minister of Municipal Affairs, which
he construed as holding:
…that notwithstanding that certain tanks
including an acid tank used to hold acid required in the refining process and
two tanks required to hold oil to fire a boiler and kiln were excepted from the
definition of ‘real property’ because they constituted part and parcel of the
‘machinery, equipment, apparatus and installations’ used in the refining
process.
In reaching that conclusion the Court was
of the opinion that the language used in the definition of ‘real property’
disclosed an intention to except from taxation all machinery, equipment,
apparatus and installations used in industry and not providing the services to
buildings whether or not it was affixed to land or buildings.
In applying the reasoning employed under the
very different circumstances which existed in the Acadian Pulp and Paper
Limited case to the property here in question Chief Justice Hughes held
that because the ten Canaport storage tanks were connected with the refinery of
Irving Refining Limited situate some 5½ miles distant by means of a
pipeline carrying crude oil from the storage tanks to the refinery for
processing, it therefore followed that these tanks “constituted part and parcel
of the ‘machinery, equipment, apparatus and installations’” used in the Irving
refinery. It was upon this basis that the Appeal Division found that the ten
tanks came within the exclusion contained in s. 1(g)(v) and accordingly
granted a declaration to the effect that they were not “real property” within
the meaning of the Assessment Act and not taxable as such under that
Act.
In my view once it has been decided that the
tanks are to be treated as “buildings” for the purposes of the Assessment
Act, there is no room for the inquiry as to whether or not they are
“machinery, equipment, apparatus and installations other than those for
providing services to buildings.” It may be that such storage tanks are
[Page 604]
sometimes loosely referred to as
“installations”, but in the context of s. 1(g) of the Assessment Act, that
word must, in my opinion, be viewed as having a meaning ejusdem generis with
the words “machinery, equipment and apparatus” which precede it and when so
viewed it will be seen to connote something quite separate and distinct from a
“building” or “buildings” as those words are used elsewhere in s. 1(g).
With the greatest respect for the opinion
expressed by the Appeal Division, I cannot agree that the ten crude oil storage
tanks which both Courts found to be “buildings” within the meaning of
s. 1(g)(ii) could be converted into “machinery, equipment, apparatus and
installations”, by reason of the fact that the crude oil from such tanks was
delivered by means of a pipeline to the refinery at Irving Refining Limited, a
different company located some 5½ miles away.
As I have indicated, the Appeal Divison appears
to have considered the Acadian Pulp and Paper Limited case as a
controlling authority in the present circumstances. But the facts of that case
were entirely different from the present one and in any event I cannot
subscribe to the view that the question of whether or not a “building” is
subject to assessment under s. 1(g)(ii) is in any way dependant upon the
use to which it is put.
Unlike the Appeal Division, I take the view that
the ballast water tank, the water tank for fire fighting purposes, the three
tanks used for removing oil from ballast water and the tank for storage of fuel
oil are structures providing shelter for moveable property and as such are
assessable as “real property” without regard to the reason for which the
shelter is provided.
For all these reasons I would allow this appeal
with costs and dismiss the respondent’s claim for a declaration relieving it
from assessment for taxation under the Assessment Act.
Appeal allowed with costs.
[Page 605]
Solicitors for the appellants: The
Attorney General for New Brunswick, Fredericton.
Solicitors for the respondent: McKelvey,
Macaulay, Machum & Fairweather, Saint John.
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