Montreal Trust Company, Administrator of the Estate of Eli Prelutsky, Deceased v. Her Majesty the Queen, [1974] CTC 658, 74 DTC 6506

Collier J:—This is an appeal on behalf of the Prelutsky estate against an assessment of estate tax by the Minister of National Revenue.

Eli Prelutsky died intestate on January 25, 1971 at Vancouver, BC. He was at the date of his death the beneficial owner of 71 shares of BC Glass and Lumber Ltd, a private company (hereafter “the company”). The plaintiff contends the situs of those shares at the time of Prelutsky’s death was in British Columbia. If the shares in fact can be deemed to be situated in British Columbia at the relevant time, then the Minister, it is contended by the plaintiff, ought to have allowed certain deductions, pursuant to section 9 of the Estate Tax Act, RSC 1970, c E-9, from the tax otherwise payable. The Minister disallowed the deduction. He took the view the shares were situate in the Province of Saskatchewan which was not, under the Estate Tax Act, a prescribed province. This appeal followed.

The amounts of tax here involved are large indeed. The net value of the estate is about $2,077,000. The tax as assessed by the Minister is $613,396.64. If the shares are situate in British Columbia the deduction or rebate will amount to $460,047.48 leaving a net federal tax payable of $153,349.16.

The Province of British Columbia has tentatively, under its legislation, assessed the estate for succession duties in the amount of $606,378.24. -

If the present assessment by. the Minister stands, and if the tentative assessment by the Province of British Columbia is levied, then the total tax payable on this estate is $1,219,774.88. If the estate is entitled to the rebate or deduction in question here, the total tax payable will (according to my calculations) be $759,727.40.

It is therefore possible, in the ultimate result, there may be double taxation of this estate. One has sympathy to this claim for relief by the administrator and the beneficiaries. Neither the possibility of double taxation, nor sympathy, can, however, influence the legal result if the facts and the law are against the submission on behalf of the estate.

The parties have agreed on a number of facts. I quote from the statement:

1. Eli Prelutsky (“Prelutsky”) died intestate on January 25, 1971, and at the time of his death was resident and domiciled in the Province of British ‘Columbia.

2. By a grant of letters of administration, Montreal Trust Company was appointed ‘administrator of the estat ‘of Prelutsky on May 17, 1971.

3. At the time of his death, Prelutsky was the beneficial owner of seventy-one (71) shares in the capital stock of BC Glass and Lumber Ltd being all of the issued and outstanding share capital in the company. Seventy of the shares were registered in the name of Prelutsky. while one share was registered in the name of Mr J D Cooper of the City of Moose Jaw in the Province of Saskatchewan as Trustee for Prelutsky.

4. BC Glass and Lumber Ltd is a body corporate incorporated pursuant to the laws of the Province of Saskatchewan as Saskatoon Glass Limited on February 26, 1935. he name of the company was changed to Saskatoon Glass and Lumber Ltd on September 2, 1942, and was further changed to BC Glass and Lumber Ltd on August 15, 1955.

5. The company at all times has maintained a registered office in- Saskatchewan and at the time. of, Prelutsky’s death the company was in good standing in the Province of Saskatchewan.

6. During or before 1941, Prelutsky moved from the Province of Saskatchewan to the Province of British Columbia and has, since that time, resided and been domiciled in the Province of British Columbia.

7. In 1955, the company was registered as an extra-provincial company in the Province of British Columbia pursuant to the provisions of the British Columbia Companies Act. Since that time the company has always maintained a head office of the company within the Province of British Columbia.

8. The Company’s Minute Book was retained in the Province of British Columbia from and after 1941, and there was also retained in British Columbia a share certificate stub book from and after that date.

9. Two shares in the capital stock of the company have been transferred since the company was registered as an extra-provincial company. The first was a transfer on August 20; 1958 from William Prelutsky, a son of Prelutsky, to Clarence H Waldo of the City of Moose Jaw in the Province of Saskatchewan. The second was a transfer on October 15, 1970, from Mr Waldo, deceased, to Mr J D Cooper who has held the share in trust for Prelutsky.

10. In the case of each of the transfers, minutes of meetings in the Province of British Columbia approving each of the transfers were prepared in the Province of British Columbia and were retained in the Company’s Minute Book. Notations were made on the share certificate stubs in the share certificate book which was retained in the Province of British Columbia wherein the transfer of the separate shares was recorded.

11. There was no book or document entitled a “Register of Transfers” maintained in the Province of Saskatchewan or in the Province of British Columbia. The company did not have any assets in the Province of Saskatchewan and did not carry on any business in the Province of Saskatchewan from and after 1955.

12. From and after 1955, the Minute Book and the share certificate stub book were retained at 789 West Pender Street, Vancouver, British Columbia, except on isolated occasions when the books may have been retained in the Prelutsky residence for short periods of time.

13. The Minute Book and share certificate stub book were never returned to the Province of Saskatchewan for any period of time after the company was registered as an extra-provincial corporation in the Province of British Columbia.

14. The only corporate seal of the company was retained in the Province of British Columbia subsequent to extra-provincial registration in the Province and was situated in the Province of British Columbia at the date of Prelutsky’s death.

In addition the following was agreed (1 have numbered these facts 15 and 16).

15. The company at the. date of death of the deceased was In good standing under the Companies Act of the Province: of British Columbia.

16. At no time did the articles of association of the company provide for the keeping outside of Saskatchewan a branch register of members resident outside of that province.

It is common ground the particular provisions of the Estate Tax Act relevant hefe are found in paragraph 9(7)(d). ! quote in part:

(d) shares, stocks and debenture stocks of a corporation and rights to subscribe for or purchase shares or stocks of à corporation (including any: such property held by a nominee, whether the beneficial ownership is evidenced by scrip certificates or otherwise) shall be deemed to be situated

(i) in the province where the deceased was domiciled at the time of his death, if any register of transfers or place of transfer is maintained by the corporation in that province for the transfer thereof,

There are some additional facts which, to my mind, flow from the evidence in this case and which have some relevance. These are:

(a) When the company registered in British Columbia in 1955, a statement of extra-provincial registration as required by the British Columbia Companies Act was filed.

(b) An attorney was appointed, again in compliance with the requirements of the British Columbia statute.

(c) The transfers of shares referred to in paragraph 9 of the agreed statement of facts were made in order to comply with the provisions of The Companies Act of Saskatchewan requiring one director to be resident in that province.

(d) The share certificate stubs, in respect of the only two transfers of shares ever made since the company was registered extra- provincially in British Columbia, by their very words: indicate the particular shares were in fact being “transferred” and indicated the name of the transferor and the transferee.

(e) Copies of the annual reports required to be filed under the British Columbia legislation were kept, as I understand it, among the other records of the company. These reports cover the years 1955 to 1970 inclusive. In each case they indicate the location of the head office of the company both within and without the Province of British Columbia, the names, addresses and occupations of persons holding shares in the company who reside in the Province of British Columbia and the full names, addresses and occupations of the directors of the company. At all times only 71 shares of an authorized. capital of 200 shares were issued: From 1955 to 1957 inclusive the annual reports showed the deceased as the holder of 70 shares and his son as the holder of one share. In those years the deceased was shown as the sole director except for 1957 when his wife was listed as a director as well. The return for 1958 lists the deceased as holding 70 shares and Waldo as holding one. Under the heading in the report “. . . particulars of shares transferred since the date of the last report . . .” there is typed the word “nil”. The reports for 1959 and 1960 are the same. The returns for 1961 and 1963 (1962 appears to be missing) show Prelutsky and Waldo as the directors, and Prelutsky and Waldo as the shareholders (holding 70 and 1 respectively). Particulars of transfers of shares is marked “nil”. For the years 1964 to 1969, the deceased and Waldo are listed as directors but. Prelutsky is shown as the only. shareholder, holding 70 shares. The particulars regarding transfer of shares has the word “nil” in those years.* The return for 1970 reports the deceased, his wife and Cooper as directors, and as before (since 1964) the deceased as the only shareholder, holding 70 shares. The word “nil” appears in respect of particulars of shares transferred since the last report.

The plaintiff submits that on all these facts, the company maintained in the Province of British Columbia a register of transfers or a place of transfer for the transfer of the shares of BC Glass and Lumber Ltd: therefore by virtue of subparagraph 9(7)(d)(i) the deceased’s shares are deemed to have been situated in British Columbia.

Both counsel were in agreement that the two cases most closely in point were A N Leckie Estate v MNR, 39 Tax ABC 397; 65 DTC 744: [1966] Ex CR 1048; [1966] CTC 310; 66 DTC 5237, (Gibson, J, Exchequer Court); [1967] SCR 291; [1967] CTC 79; 67 DTC 5062, and H M Schiller Estate v MNR, [1968] CTC 233; 68 DTC 5164 (Jackett, P (now CJ), Exchequer Court); [1969] CTC 348; 69 DTC 5256 (Can SC). In the Leckie case, the deceased held shares in two companies. At the date of his death he was domiciled, and had been for some time prior, in Ontario. One of the companies was a Manitoba public company, but the deceased was, for practical purposes, the sole shareholder. The Companies Act of Manitoba provided that the register of transfers was to be kept at its head office, but permitted the directors to authorize the keeping of branch transfer registers elsewhere, either within or without the province. One of the by-laws of the company provided for the keeping of a register of transfers. The directors never at any time established a branch register. The main register was, in fact, always kept at the company’s head office in Winnipeg. Mr Davis of the Tax Appeal Board (after a review of authorities) considered the shares of the company could be effectively dealt with only at Winnipeg, Manitoba: their situs was therefore Manitoba, and not Ontario, as contended by the estate. This decision was ultimately affirmed in the Supreme Court of. Canada. Cartwright, J, giving the judgment of the Court, said at pages 293-4 [80-81, 5063]:

At the time of his death Adam Newton Leckie, hereinafter referred to as “the deceased”, was domiciled and ordinarily resident at Oakville in the County of Halton in the Province of Ontario. He was the beneficial owner of the 30,003 common shares which were all the issued common shares of the Company and the registered owner of all of these except two used to qualify

*There was no evidence adduced to explain why particulars of the two share transfers (earlier referred to) in 1958 and 1970 were not set out in the annual reports for those years. I do not attach any real significance to the omission. The transfers were mere formalities in order that a resident of Saskatchewan be appointed a director. Nor was there any evidence before me to explain why from 1964 to 1970 the reports in setting out the shareholdings in the company listed only the deceased as a shareholder (with 70 shares). In previous reports the deceased and one other shareholder had been listed. Again, I do not place much weight on these errors. It is well known that annual reports, particularly for tightly held private companies are often prepared by legal secretaries in the office of a solicitor and frequently not scrutinized personally by the attending solicitor. I think the errors here are quite understandable and do not militate against the legal efficacy, if any, these reports have in deciding the issue in this case.

directors who were his nominees and acted entirely on his instructions. The preferred shares had no voting rights and it is not questioned that the deceased was at all times in complete control of the company.

The Company was incorporated pursuant to the provisions of the Manitoba Companies Act on October 2, 1957. Its head office was at all times in the City of Winnipeg. It maintained only one register for the transfer of shares and that register was at its head office in Winnipeg.

Section 346(1) of the Manitoba Act provides as follows:

“346. (1) The register of transfers of every corporation with capital stock shall be kept at the head office of the corporation, and one or more branch registers of transfers, at which transfers may be validly registered, may be kept at such office or offices of the corporation or other, place or places within or without the province as the directors, from time to time, appoint. Both registrars and transfer agents may issue and deliver share certificates in such manner as the directors of the company from time to time authorize.’’

The directors did not authorize a branch register to be kept at any office of the Company in Ontario or at any other place in Ontario.

On this state of facts it seems plain that the condition prescribed in clause (i) of paragraph (d) of subsection 8 of Section 9 of the Estate Fax Act, quoted above, was not fulfilled and for the purposes of that Act the situs of these shares is governed by clause (ii) of that paragraph and accordingly they shall be deemed to be situated in the place where the register of transfers or place of transfer nearest to the place where the deceased was ordinarily resident at the time of death was maintained by the company for the transfer thereof.

The wording of this provision is mandatory and appears to me to be clear and free from any ambiguity. On the admitted facts it has the inevitable result of declaring that the shares in question shall be deemed to be situated in Manitoba.

In the Leckie case, it appears the company at all times kept its records and carried on business in Manitoba. Its only connection with Ontario was because the sole shareholder resided there for some years and was domiciled there at the time of his death. The facts in the case before me are, of course, dissimilar.

The Schiller case also was concerned with the situs of shares for the purposes of estate tax. The estate contended the shares in question were situated in Ontario; the Minister contended their situs was in Saskatchewan. I think it convenient to quote at length from the decision of Ritchie, J, with whose judgment the other sitting members of the Court concurred. At pages 348-52 [5256-8] :

The following portions of The Companies Act, RSS 1955, c 124 as amended by c 18 of the Statutes of Saskatchewan 1956, appear to me to be particularly relevant:

“76. (1) Every company shall keep in one or more books a register of its members, and shall enter therein the names of the subscribers to the memorandum and the name of every other person who agrees to become a member of the company, together with the following particulars:

(a) the full name, address and occupation of every such subscriber and person, and of every person to whom section 91 or 92 applies, and who requests the company to enter his name in a representative capacity;

(b) the date at which each person was entered in the register as a member;

(6) the date at which any person ceased to be a member;

(d) the kind and class of the shares held by each member, their nominal amount or par value, if any, and the amount paid or agreed to be considered as paid on each share;

(e) particulars of the transfer by ‘any member of his shares;

(f) in the case of a person to whom section 91 or 92 applies, a descrip- tion of the capacity in which such person represents any share in the

company so held by him and the name of the estate or person so represented, , ; -,

77. On the application of the transferor of : any share in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.”

Section 78a

“78a. The register of members shall be kept at the registered office of the company; provided that the register may be kept at an office in the province of a trust company licensed under The Companies Inspection and Licensing Act, and so long:as the register is so kept the trust company shall be subject to the provisions of this Act respecting the register in the same manner and to the same extent as if the register were kept at the registered office of the company, but the trust company shall under no circumstances be entitled to a lien on the register.” ,

The Company in question was incorporated on May 26, 1927. By its Memorandum of Association it was provided that the registered office was to be situate at the City of Regina in the Province of Saskatchewan and no provision was ever made, either in the Company’s Articles of Association or otherwise for any. other registered office or branch registry.

From the time of its incorporation until thé date of his death, the late Mr Schiller owned or controlled all the issued common shares of the Company; he was its president and exercised the full degree of control and management consequent upon his ownership of the shares and his office as president. Until March 1953, Mr Schiller resided in the City of Regina where he was domiciled and where the business of the Company was conducted, but from that date until his death he became resident and domiciled in the City of Toronto to which City he removed the Minute Book, Share Register Book and Shareholders’ Register of the Company, and where he conducted ail its affairs, although the Company continued to file annual returns as required by The Companies Act of Saskatchewan wherein it reported the address of its “Registered Office” as being 1702 Hamilton Street in the City of Regina, which was a building owned by it.

It is agreed between the parties that at the time of Mr Schiller’s death the Share Register of the Company was physically situate in Toronto where entries were made in it from time to time as appears therein, but neither The Companies Act of Saskatchewan nor the Articles of Association of the Company authorized it to keep a Register of Members or a branch Register of Members anywhere except in the Province of Saskatchewan, and the whole question raised by this appeal is whether, notwithstanding the provisions of the Saskatchewan Companies Act requiring the Register of Members of a company to be kept in that Province, the fact that such Register was kept in the Province of Ontario at the time of Mr Schiller’s death, had the effect of giving the Company’s shares a situs in the Province of. Ontario within the meaning of. Section 9(8)(d) of the Estate Tax Act. In my view this case is governed by the direct authority of the decision of the Privy Council in Erie Beach Company, Limited v The Attorney-General for Ontario, [1930] AC 161. In that case the question for determination was whether the shares of a company incorporated under the Ontario Companies Act were situate in the Province of Ontario or the State of New York for succession duty purposes.

Under the Ontario Companies Act (RSO:1914, c 178) companies incorporated under that statute were required to keep a Register of Shares and Shareholders at the head office “within Ontario”, but Mr Bardol, who owned or controlled all the shares in the company managed his business from his office in Buffalo, New York, where the books, records and documents. of. the company were kept, and such transfers as took place were made and recorded. corded. In delivering the judgment on behalf of the Privy’ Council, Lord Merrivale said:

“In Attorney-General v Higgins, [1914] AC 176, as in Brassard v Smith, [1925] AC 371, duty upon shares was in question. In Attorney-General v Higgins, supra, Baron Martin held that when transfer of shares in a company must be effected by a change in the register, the place where the register is required by law to be kept determines the locality of the shares. Lord Dunedin, in delivering the judgment of this Board in Brassard v Smith, epitomized the crucial inquiry in a sentence—Where could the shares be effectually dealt with? The circumstances relied upon by the appellants which show the predilection of the members of the plaintiff company for transacting its business in Buffalo—so far as they might—have, in their Lordships’ opinion, no material weight. The shares in question can be effectually dealt with in Ontario only. They are therefore property situate in Ontario and subject to succession duty there.”

I take this to be authority for the proposition that the situs of a company’s shares is at the place where its share register is required to be kept by law and that the physical presence of the share register in another jurisdiction has no effect upon the matter. I am accordingly of opinion that the words “. . . if any register of transfers or place of transfer is maintained by the corporation in that provinCe . . .” as they are used in Section 9(8)(d)(i) of the Estate Tax Act must be construed as meaning “maintained” in accordance with the requirements of the statute under which the company in question was incorporated and that in the present case this must mean in the Province of Saskatchewan.

Counsel for the defendant here contends that on the authority of the Schiller case, the Prelutsky shares had a situs in Saskatchewan, not in British Columbia. He argues that the fact of extra-provincial registration by the company and the carrying on of business in British Columbia is insufficient to distinguish the Schiller decision; that there was no register of transfers or place of transfer in British Columbia; the only register of transfers and the only place of transfer was Saskatchewan; that province was the sole place where the shares of this company could be effectually dealt with.

To my mind, the first issue in this case is whether or not the share records kept by the company amounted to the maintenance by it of a register of transfers. The terms “register of transfers or place of transfer” are not defined in the Estate Tax Act. Some jurisdictions, in their legislation in respect of corporations, provide for a register of transfers in addition to what is commonly called a shareholder’s register or register of members. One normally associates a register of transfers with a public company, and as inapplicable to a private company. The Companies Acts do not appear to make any distinction. The Canada Corporations Act, RSC 1970, c C-32 provides for the keeping of a register of transfers (see sections 109-110). The predecessor statute merely required that the company books record all transfers, with particulars. The Business Corporations Act of Ontario, RSO 1970, c 53, requires the keeping of a register of transfers, and makes provi- sion for branch registers (see sections 158-160). The present British Columbia legislation (Companies Act, SBC 1978, c 18) has similar provisions (see sections 64 and 186).

In respect of this company, however, and at the: relevant times there was no mention in the Saskatchewan legislation,* [1] nor in the British Columbia legislation,! [2] of a register of transfers, branch registers of transfers, or places of transfer. Companies incorporated under either statute, or registered extra-provincially in either province, were. not required in law to keep a separate record called a. “register of transfers” or to maintain a “place of transfer”. In both provinces, companies were required to keep a register of members with prescribed information, including ‘‘particulars of the transfer by any member of his shares” (section 77 Saskatchewan; section. 79 BC). The register of members was to be kept at its registered office, or at the office of a trust company (section 80 Saskatchewan; section 82 BC). If authorized by its articles, a company was permitted to keep without the province a register of members resident outside the company’s “home” province (section 85 Saskatchewan; section 87 BC). A transfer of shares could not be registered unless a proper instrument of transfer was delivered to the company (section 95. Saskatchewan; section 97 BC).

In the case of this company, its minute book contained a sheet headed ‘‘Register of Shareholders” (Exhibit 25). This sheet is obviously a printed form similar to those easily obtained from any printer of legal stationery. It contains various headings including one: “Particulars of Transfer’. The whole sheet is blank. I see no magic in printed forms. Nor do I think a shareholders’ register need be kept with the particularity of the register filed as Exhibit 24 (obviously a copy of the register in the Schiller case). In my opinion, the minute book kept by this company, the share certificate stub book, and the copies of the annual reports, when looked at from a practical and businesslike point of view, complied with the requirements of the Saskatchewan statute in respect of the keeping of a register of members. I think also there was compliance with section 200 of the British Columbia statute. That section is as follows:

200. An extra-provincial company registered under this Act shall keep at its head office in the Province or at the office of its transfer agent or registered attorney a register of its members who reside in the Province, and enter therein their full names, addresses, and occupations, and full. particulars of any transfer of shares to or from such members, and the register may be inspected and copies required in accordance with the provisions of section 83.

It should be remembered that the requirements set out in section 200 are minimum requirements only. Here the company, by means of the records I have mentioned, kept more than a register of its British Columbia members. It kept a register, in British Columbia, of all its members and by means of the share certificate stubs, particulars of the only two transfers of shares. The defendant points to section 85 of the Saskatchewan statute and says there was never any-authority for the keeping of a branch register. It is true there is no article of association to that effect. De facto, however, as opposed to de jure, a branch register (and as I see it the principal register as well) were kept in British Columbia. By section 200 of that province’s legislation, some form of register was required to be maintained.

I have little difficulty in: taking the next step: that the records which I have concluded are sufficient to constitute a register of members, are equally sufficient to constitute the maintenance of a “register of transfers”. I am also of the view the head office of the company in British Columbia (see the various annual reports) was a “place of transfer” for the company’s shares in that province. Jackett, P (now Chief Justice) found the shareholders’ register in the Schiller case to be a “register of transfers” within the provisions of the Estate Tax Act. I quote from page 237 [5166-7]:

Insofar as Schiller’s Limited is concerned, I am of the view that its Shareholders’ Register, which, as I have already indicated, is in my view the “register of members” that it was required by The Companies Act to keep, was a “register of transfers” within section 9(8)(d) of the Estate Tax Act, that its “registered office” was a “place of transfer” within that section, and that both the Shareholders’ Register and the registered office were “maintained” by the company inter alia “for the transfer” of shares in the company as required by the Saskatchewan law under which the company operates. I come to that conclusion by reason of the view that the “transfer” contemplated by section 9(8)(d) is one that is effective as between the holder of the shares and the company, and not one that is merely effective between transferor and transferee.

To my mind the function of a register of transfers (when it is required by statute) is twofold: firstly to provide certain information so it is available to and for the benefit of the public, and secondly to provide a system whereby shares may be conveniently: dealt with without the necessity of always being driven to the so-called home base of the particular company. Similarly, providing various places of transfer is, in my view, aimed at facilitating (in public companies, particularly) dealings in shares. In the case of a private company such as the one here, even less formality, in the sense of records, ought to be demanded, provided the minimum requirements of the relevant statutes are met.* [3] In this case, the principal statute is of course, the Estate Tax Act; the statute giving birth to the company and the statutes of the places where it chooses to carry on business must also be considered.

The facts in this case go much beyond the circumstances in the Schiller case. In that case the company apparently still carried on business in Saskatchewan (although the deceased Shiller managed its affairs from his residence and domicile in Ontario). The company’s minute book, share register book and shareholders’ register were

facto from time to time were recorded various transactions entered into by the late Mr Leckie which required some corporate record; that there was no reference in the minutes of the company to the maintaining of any “register of transfers of shares” or “place of register”.

In brief, the evidence established that the late Mr Leckie operated Leckie Enterprises Limited as if it was a sole proprietorship. owned by him.

The so-called share “register of transfers” in fact. consisted merely of stubs from printed forms of share certificates. And at all material times the actual share certificate were endorsed in blank, and in such street form were pledged to and were in the custody of the Bank of Montreal head office branch in Winnipeg, Manitoba as collateral security for a loan, so that the “register of transfers” that the parties have agreed was kept at Winnipeg was a very basic thing, but quite satisfactory for a company such as this.

The problem is what would a company such as this do to maintain a “place of transfer”. Certainly, as indicated in the evidence, it would be ridiculous for it to have a public trust company as such, which, as stated, a company with many public shareholders often does.

To reach a practical answer to this problem it is relevant to keep in mind that the deceased Adam Newton Leckie considered and treated Leckie Enterprises Limited as part of himself, in the same manner as so many lay persons do in reference to corporations they wholly own and control. They do not look on such corporations as third parties separate and distinct from themselves even though legally it is uncontrovertible that such corporations are separate legal entities.

Taking this into consideration, there is no doubt in my mind on the facts of this case that the deceased in effect considered the shares of Leckie Enterprises Limited could be transferred at any material time where he was, as, for example, where he resided, namely, in Oakville, Ontario. The question is whether or not this is sufficient to constitute Oakville a place of transfer to bring it within the statutory prescription that the corporation at the time of the deceased’s death must in fact have maintained a ‘‘place of transfer” in the Province of Ontario before the provincial credit to this estate is allowable.

It is unequivocal that this statutory provision is remedial. and it is also patent on the facts of this case that a grievous injustice and absurd result will obtain if this estate is denied this deduction of provincial tax credit.

On considering this sub-section in the Estate Tax Act it would seem clear that this provision was enacted having in mind the usual situation that obtains with a public corporation, namely, a large number of public shareholders, substantial corporate staff, good corporate business practice which would dictate the necessity of having a register of transfers of shares and. places of transfers in. all provinces where there were any number of shareholders, and so forth. But this provision also in law does not apply to Leckie Enterprises Limited which it is clear is an entirely different kind of corporation and one which the drafters of the legislation may not have had in mind. But the proper rules of construction of statutes must also apply to the case of this corporation.”

kept in Toronto where the deceased lived, apparently as a matter of convenience. With the Prelutsky company, it ceased to carry on business in Saskatchewan (it moved its business activities to British Columbia); it became registered in accordance with the ‘law; it maintained (not as a matter of convenience, but as required by British Columbia law) its records in respect of shareholders of the province. I have already pointed out the company complied (for practical purposes) with the minimum requirements of British Columbia law in respect of a list of resident shareholders, In fact, the company kept a register there of all shareholders. Here, in distinction to the Schiller case, there was more than the mere “. . physical presence of the share register in another jurisdiction”.

I have designedly expressed no opinion as to whether this company on the facts here, maintained a “register of transfers or place of transfer” in the province of Saskatchewan as well as in British Columbia. That may well be.* [4]

For the reasons I have given, the appeal is allowed. The assessment will be referred back to the Minister for reassessment with the direction that at the date of death of the deceased the shares in question are deemed to have been situated in the Province of British Columbia. The plaintiff is entitled to the costs of this action.