de
Grandpré,
J
(concurred
in
by
Laskin,
CJC,
Judson,
Pigeon
and
Beetz,
JJ)
[Translation]:—This
appeal
poses
the
following
question:
When
spouses
stipulate
in
their
marriage
contract
that
the
community
property
shall
belong
to
the
survivor,
is
there
a
passing
of
property
to
the
wife
on
the
death
of
the
husband,
within
the
meaning
of
sections
2
and
3
of
the
Estate
Tax
Act,
SC
1958,
c
29?
The
question
arises
in
a
simple
context:
(a)
by
notarized
deed
dated
July
4,
1911,
in
Belgium,
a
marriage
contract
was
concluded
between
François
Faure
and
Lucie
Simon,
by
which
they
stated
that
they
adopted
the
regime
of
community
of
acquests,
in
accordance
with
Articles
1498
and
1499
of
the
Belgian
Code
civil;
the
parties
agree
on
the
fact
that
the
Quebec
Civil
Code
is
to
the
same
effect;
(b)
this
marriage
contract
contained
the
following
stipulation:
[Translation]
The
future
spouses
stipulate,
as
a
marriage
covenant,
that
the
whole
of
the
community
shall
belong,
with
full
right
of
ownership,
to
the
surviving
spouse,
whether
or
not
there
are
children
or
descendants
born
of
this
marriage;
(c)
Francois
Faure
died
on
August
5,
1966;
(d)
in
calculating
the
property
passing
on
death,
respondents,
in
their
Capacity
as
executors,
excluded
the
whole
of
the
community
of
acquests.
Appellant
contended
that
there
was
a
passing
within
the
meaning
of
the
Act.
In
his
assessment,
he
included
in
computing
the
value
of
property
passing
on
the
death
of
Francois
Faure
the
latter’s
share
in
the
community
of
acquests.
This
assessment
was
set
aside
by
the
Tax
Appeal
Board,
and
this
finding
was
concurred
in
by
the
Federal
Court—
Trial
Division,
[1973]
FC
783;
[1974]
CTC
460;
73
DTC
5236,
and
Appeal
Division,
[1975]
CTC
136;
75
DTC
5076.
For
the
purposes
of
answering
the
question
put
to
the
Court,
I
do
not
believe
that
it
is
necessary
to
analyse
the
nature
of
the
community,
reduced
to
its
acquests,
as
the
parties
invited
the
Court
to
do.
Were
the
spouses
co-owners
of
this
property
during
the
existence
of
the
community?
Do
we
have
here
a
type
of
partnership
or
an
institution
sui
generis?
These
questions
I
will
leave
unanswered.
Whatever
the
nature
of
the
community
may
be,
on
its
dissolution
by
the
death
of
the
husband,
giving
rise
to
application
of
the
above-
mentioned
stipulation
in
the
marriage
covenants,
the
widow
became
owner
of
all
the
property,
retroactively
to
the
date
of
the
marriage.
In
Sura
v
MNR,
[1962]
SCR
65;
[1962]
CTC
1;
62
DTC
1005,
speaking
of
the
share
of
the
community
property
going
to
the
spouse
in
a
case
in
which
the
exclusive
right
of
the
survivor
was
not
at
issue,
Taschereau,
J,
as
he
then
was,
stated
at
page
71
[8,
1008]:
[Translation]
.
.
.
if
the
wife
was
not
co-owner
of
the
community
property,
she
would
have
to
pay
succession
duties
on
dissolution
of
the
community,
because
there
would
then
be
a
passing
of
property
from
her
husband.
However,
this
is
not
the
case
here,
because
there
was
no
passing,
but
partition,
in
which
she
took
the
share
coming
to
her,
which
had
belonged
to
her
since
the
marriage.
What
she
received
did
not
come
from
the
estate
of
her
husband.
In
support
of
his
views,
Taschereau,
J
cited
as
authorities
several
authors,
including
Mignault,
who
stated,
in
volume
6
of
his
Droit
Civil,
page
337,
that
in
the
event
of
renunciation
the
interest
is
retroactively
terminated,
the
other
spouse
being
[Translation]
‘‘deemed
to
have
always
been
the
sole
owner
of
the
property
which
made
up
the
community’’.
To
these
authorities,
I
would
add
Troplong,
Le
Droit
Civil
Expliqué,
2nd
edition,
Du
Contrat
de
mariage,
volume
Ill,
page
679,
No
2184:
[Translation]
.
.
.
by
the
retroactive
effect
of
the
occurrence
of
the
condition
of
survival,
the
surviving
spouse
is
deemed
to
have
been
the
owner
ab
initio,
from
the
time
of
the
acquisitions.
The
predeceased,
on
the
other
hand,
is
deemed
never
to
have
had
any
interest;
he
passes
nothing
to
his
heirs.
I
accept
without
hesitation
the
finding
of
the
Sura
decision,
which
dealt
with
the
case
of
an
ordinary
community,
as
I
said.
This
reasoning,
applied
to
the
whole
of
the
property
when
the
marriage
covenants
contain
a
complete
stipulation
in
favour
of
the
survivor,
leads
necessarily
to
the
conclusion
that
there
was
here
no
“passing”
giving
rise
to
assessment,
unless
this
word
has
been
given
a
broader
meaning
by
the
legislator.
This
is
what
appellant
submitted
to
the
Court,
declining
to
rely
in
this
Court
on
paragraph
3(1)(f);
we
therefore
do
not
have
to
decide
on
it.
He
relies
on
sections
3
and
58,
the
relevant
portions
of
which
should
now
be
cited:
3.
(1)
There
shall
be
included
in
computing
the
aggregate
net
value
of
the
property
passing
on
the
death
of
a
person
the
value
of
all
property,
where-
ever
situated,
passing
on
the
death
of
such
person,
including,
without
restricting
the
generality
of
the
foregoing,
(a)
all
property
of
which
the
deceased
was,
immediately
prior
to
his
death,
competent
to
dispose;
(2)
For
the
purposes
of
this
section,
(a)
a
person
shall
be
deemed
to
have
been
competent
to
dispose
of
any
property
if
he
had
such
an
estate
or
interest
therein
or
such
general
power
as
would,
if
he
were
sui
juris,
have
enabled
him
to
dispose
of
that
property;
(e)
notwithstanding
anything
in
this
section,
the
expression
in
paragraph
(a)
of
subsection
(1)
“property
of
which
the
deceased
was,
immediately
prior
to
his
death,
competent
to
dispose’’
does
not
include
the
share
of
the
spouse
of
the
deceased
in
any
community
of
property
that
existed
between
the
deceased
and
such
spouse
immediately
prior
to
his
death.
58.
(1)
In
this
Act,
(i)
“general
power’’
includes
any
power
or
authority
enabling
the
donee
or
other
holder
thereof
to
appoint,
appropriate
or
dispose
of
property
as
he
sees
fit,
whether
exercisable
by
instrument
inter
vivos
or
by
will,
or
both,
but
does
not
include
any
power
exercisable
in
a
fiduciary
capacity
under
a
disposition
not
made
by
him,
or
exercisable
as
a
mortgagee;
Appellant’s
argument
is
that
immediately
before
his
death
Francois
Faure
was
competent
to
dispose
of
half
of
the
community
of
acquests,
and
as
a
result
the
word
“passing”
must
be
more
broadly
interpreted,
and
that
the
fact
that
Francois
Faure,
under
Article
1292
CC,
was
bound
to
obtain
the
consent
of
his
wife
with
respect
to
certain
dispositions
is
not
an
obstacle
to
such
an
interpretation.
The
reply
to
this
argument
is
found
in
The
Royal
Trust
Company
(A
H
Wilson
Estate)
v
MNR,
[1968]
SCR
505;
[1968]
CTC
224:
68
DTC
5158.
Fauteux,
J,
as
he
then
was,
wrote,
delivering
the
judgment
of
the
Court
(at
p
513
[229,
5162]):
While,
in
a
loose
sense,
it
may
be
said
that
the
husband
is
competent
to
dispose,
in
his
lifetime,
of
community
assets,
under
the
general
administrative
power
conferred
on
him
by
articles
1299
et
seq
of
the
Civil
Code
of
the
province
of
Quebec,
he
is
not
free,
not
competent
to
dispose
of
such
assets
in
any
sense
contemplated
by
Sections
3(1)(a),
3(2)(a)
and
58(1)(i)
quoted
above.
The
premise,
on
which
rests
the
second
branch
of
the
dilemma
propounded
by
appellants,
is
not
valid.
In
my
opinion,
these
provisions
of
Section
3(2)(e)
do
not
support
appellants’
interpretation
of
Section
3(1)(a).
I
would
dismiss
the
appeal
with
costs.
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