Addy,
J:—This
action,
as
originally
constituted,
consisted
of
an
appeal
by
the
plaintiff
of
an
assessment
for
income
tax
purposes
for
the
taxation
year
1969,
of
revenue-producing
apartment
buildings
in
Montreal
sold
by
the
plaintiff
on
December
30,
1969
to
Louis
Bass,
Bennie
Bass
and
Moe
Bass
(hereinafter
referred
to
as
“the
Bass
brothers’’).
By
reassessment
notices,
issued
at
various
intervals,
the
Minister
assessed
the
non-depreciable
portions
of
the
real
estate,
that
is
the
lands,
in
so
far
as
the
plaintiff
was
concerned
at
an
amount
of
$169,000
and
for
the
same
year
in
so
far
as
the
Bass
brothers
are
concerned,
at
an
amount
of
$350,089.
Before
trial,
by
special
order
pursuant
to
paragraph
174(3)(b)
of
the
Income
Tax
Act,
the
Bass
brothers
were
joined
in
the
action
as
parties
and
it
was
further
ordered
that
the
question
to
be
determined
at
trial
would
be
the
following:
For
the
purpose
of
paragraph
20(6)(g)
of
the
Act,
what
portion
of
the
aggregate
price
of
certain
land,
buildings
and
equipment
located
on
Grenet
Street
in
the
City
of
St
Laurent
in
the
amount
of
$1,335,000,
sold
on
December
30,
1969,
by
the
Plaintiff
to
the
Joined
Parties
can
reasonably
be
regarded
as
attributable
to
the
land
and
buildings
respectively?
The
price
paid
on
December
30,
1969
for
the
lands,
buildings
and
equipment
was
$1,335,000.
It
is
not
disputed
that
the
value
of
the
equipment
was
$18,000.
The
consideration
for
the
lands
and
buildings
was
therefore
$1,317,000.
Since
no
one
has
attempted
to
establish
that
the
purchase
price
of
$1,317,000
paid
on
December
30,
1969,
as
aforesaid,
did
not
represent
the
fair
market
price
at
that
time
of
both
lands
and
buildings
as
a
whole,
and
since
the
transaction
was
an
arm’s
length
one,
and
both
the
vendor
and
the
purchasers
were
obviously
astute
and
well-informed
parties
and,
finally,
since
the
vendor
was
under
no
particular
pressure
to
sell
and
the
purchasers
had
no
particular
need
for
that
specific
property,
I
find
no
difficulty
in
coming
to
the
conclusion
that
the
price
paid
represented
the
actual
or
real
value
of
both
the
lands
and
buildings.
In
other
words,
the
purchasers
paid
neither
too
much
nor
too
little
for
either
the
lands
or
the
buildings
when
they
purchased
the
whole.
The
expert
called
by
the
plaintiff
gave
no
consideration
whatsoever
to
the
value
of
the
lands
as
they
existed
in
1969,
that
is,
with
the
apartment
buildings
actually
erected
on
them;
on
the
contrary,
in
accordance
with
his
instructions,
he
valued
the
lands
as
if
they
were
completely
vacant
and
made
no
inspection
or
valuation
of
the
buildings.
This
was
a
completely
improper
approach
and
is
of
little
assistance
to
the
Court;
pursuant
to
paragraph
20(6)(g),
in
order
to
determine
what
part
of
the
total
amount
can
be
“reasonably
regarded’’
as
being
consideration
for
the
disposition
of
the
lands
as
opposed
to
the
buildings,
the
Court
must
consider
the
whole;
each
of
the
two
elements
constituting
the
whole
must
necessarily
be
subject
to
whatever
advantages
or
disadvantages
actually
flow
from
the
existence,
nature,
site,
use
and
condition
of
the
other
as
well
as
whatever
other
factors
might
affect
the
desirability,
marketability
and
investment
value
of
the
other.
No
other
expert
real
estate
valuation
evidence
whatsoever
was
offered
and
the
Court
is
left
only
with
the
valuations
for
municipal
assessment
purposes.
The
Court
is
permitted
to
use
municipal
assessments
in
arriving
at
a
valuation
of
property.
(See
Turnbull
Real
Estate
Company
v
The
King;
Corkery
et
al
v
The
King;
De
Bury
et
al
v
The
King
(1903),
33
SCR
677.)
Paragraph
818(c)
of
the
Charter
of
the
City
of
Montreal,
1960,
1964,
12-13
Eliz
Il,
c
71,
which
governs
assessments
within
the
City
of
Montreal,
requires
that
the
assessment
rolls
reflect
the
“actual
value
of
the
immoveables
and,
separately,
that
of
the
lots
and
that
of
the
buildings
thereon
erected’’.
It
appears
therefore
that
assessors
in
Montreal
are
obliged
by
law
to
assess
both
lands
and
buildings
in
accordance
with
their
actual
value.
A
similar
provisions
exists
in
the
Cities
and
Towns
Act,
RSQ
1964,
c
193,
subsection
485(1),
which
governs
the
remainder
of
the
Province
of
Quebec.
There
was
some
evidence
that,
as
a
result
of
a
study
made
of
some
areas
in
Montreal,
it
was
found
that
in
1976,
realty
there
had
been
assessed
at
that
time
at
about
90%
of
actual
value.
There
is
no
evidence
as
to
what
the
situation
was
in
1969.
In
any
event,
if
the
assessors
were
not
in
1969
assessing
strictly
in
accordance
with
actual
value;
there
is
still
no
reason
to
conclude
or
even
suspect
that
they
were
not
applying
the
same
variation
from
either
current
market
price
or
actual
value
to
both
lands
and
buildings,
whatever
that
variation
might
be.
In
view
of
there
being
no
evidence
to
the
contrary,
I
find
that,
on
the
balance
of
probabilities,
the
proportion
which
the
municipal
valuation
of
the
land
for
the
year
1969-70
bears
to
that
of
the
whole
is
the
correct
one.
The
municipal
valuation
or
assessment
for
taxation
year
1969-70
of
$217,050
for
the
lands
and
$1,313,500
for
the
buildings,
establishes
a
proportion
of
14.18%
of
the
value
as
being
attributable
to
the
lands.
On
applying
that
proportion
to
the
value
of
the
whole,
as
determined
by
the
above-mentioned
sale
price
of
$1,317,000
paid
for
the
lands
and
buildings,
one
arrives
at
the
amount
of
$186,750.
I
find
that
amount
to
be
the
portion
of
the
aggregate
price
of
the
lands,
buildings
and
equipment
concerned
in
this
action
which
can
reasonably
be
regarded
as
attributable
to
the
lands
and
the
balance,
namely
$1,130,250,
as
attributable
to
the
buildings.
The
assessments
of
the
plaintiff
and
of
the
Bass
brothers
for
the
taxation
year
1969
will
therefore
be
referred
back
to
the
Minister
for
reassessment
in
accordance
with
these
figures.
Before
dealing
with
the
question
of
costs,
I
would
like
to
add
that
where,
as
in
the
present
case,
the
Minister
has
made
for
the
same
taxation
year
regarding
the
same
asset,
two
absolutely
contradictory
and
mutually
exclusive
assessments
arising
out
of
the
same
transaction,
it
would
be
ludicrous
for
the
Court
to
allow
the
Minister,
in
such
a
case,
to
enjoy
the
benefit
of
the
burden
of
proof
which
he
normally
enjoys
in
assessment
appeal
cases,
since
the
Minister
is,
in
the
same
action,
seeking
to
have
the
Court
confirm
two
contradictory
statements.
Counsel
for
the
plaintiff,
at
trial,
requested
costs
on
the
solicitor-and-
client
basis
in
any
event
of
the
cause
and
the
question
of
costs
was
argued
before
me.
Although
there
appears
to
be
no
legal
bar
to
the
Minister
assessing
two
different
amounts
for
the
same
asset
in
the
same
taxation
year
when
the
value
to
be
determined
arises
out
of
the
same
transaction,
I
feel
that
this
custom
is
highly
improper
and
fundamentally
unfair
and
constitutes
the
kind
of
conduct
which
is
most
likely
to
bring
the
taxing
authority
into
disrepute.
As
previously
stated,
the
servants
of
the
defendant,
in
the
case
at
bar,
valued
the
lands
at
the
time
of
sale
at
$169,000
in
so
far
as
the
plaintiff
was
concerned.
The
plaintiff
contested
that
assessment,
claiming
in
its
statement
of
claim
that
the
lands
were
worth
$350,089.
The
defendant’s
assessors,
while
still
maintaining
the
valuation
of
$169,000
against
the
plaintiff
who
was
the
vendor,
then
deliberately
used
the
very
figure
alleged
by
the
plaintiff
of
$350,089
and
issued
a
supplementary
assessment
in
that
amount
against
the
purchasers,
the
Bass
brothers.
The
Minister
confirmed
this
last-mentioned
assessment.
The
defendant
then
made
a
motion
to
have
the
Bass
brothers
joined
and
subsequently
sat
back
quite
confidently
allowing
the
two
sets
of
taxpayers
to
fight
it
out
among
themselves
and
have
the
Court
decide
who
should
pay
the
piper.
Assessors
of
the
Department
of
National
Revenue
in
issuing
assessments
owe
a
duty
to
the
public
in
general
and
to
the
taxpayers
concerned
by
the
assessment
in
particular
to
do
so
in
a
bona
fide
and
conscientious
manner.
The
provisions
of
the
Income
Tax
Act
are
not
intended
to
allow
them
to
merely
issue
figures
indiscriminately
nor
the
Minister
to
subsequently
confirm
those
figures
with
obvious
disregard
to
the
value
of
the
asset
and
then
oblige
taxpayers
to
resort
to
the
courts
to
do
what
they
should
have
done
in
the
first
place
in
accordance
with
their
statutory
duty,
namely,
to
make
an
honest
attempt
to
determine
what
a
reasonable
value
really
is.
For
the
above
reasons,
I
am
allowing
both
the
plaintiff
and
the
Bass
brothers
their
costs
throughout
on
a
solicitor-and-client
basis,
except
that
the
fees
of
the
witnesses
Mr
Bigras
and
Mr
Attes
shall
be
taxed
on
a
party-and-party
basis
and
that
of
the
aforesaid
witness
Mr
Attes
shall
be
taxed
as
an
ordinary
witness
and
not
as
an
expert
since
he
was
not
allowed
to
testify
as
such
at
the
trial.
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