In Re the Income Tax Act, in Re Ramsey., [1938-39] CTC 263

SHEPHERD J.:—The appellant, James Ramsey, appeals from three assessments made by the Provincial Treasurer of Alberta covering the years 1931, 1932, 1933, in respect of income derived by him as a shareholder in the James Ramsey Co. Ltd., a body corporate incorporated under the Companies Act of Alberta (1929 (Alta.), c. 14).

It is admitted that the appellant and his son, one T. N. Ramsey, together hold a majority of the stock in this company, and that during the years under review the appellant lived in Alberta and that T. N. Ramsey while being the appellant’s son was during these years an adult living with his wife and children in his own household apart from that of the appellant and was not dependent on his father for support.

It is also admitted that more than one-fourth of the gross revenue of the company for the years in question was derived from rents.

The question for determination is whether or not under these circumstances T. N. Ramsey was during these three years a member of James Ramsey’s family within the meaning of s. 2(g) of the Income Tax Act, being c. 5, Statutes of Alberta, 1932, as amended.

It is further agreed that if T. N. Ramsey was during the said period a member of the appellant’s family within the meaning of said section, the appeal must be dismissed, and if not, the appeal must be allowed.

Section 2(g) reads as follows:

"Personal corporation’ means a corporation or joint stock company (no matter when or where created) controlled directly or indirectly by one person, who resides in Alberta, or by one such person and his wife or any member of his family, or by any combination of them, or by any other person or corporation on his or their behalf, whether through holding a majority of the stock of such corporation, or in any other manner whatsoever, the gross revenue of which is to the extent of one quarter or more derived from one or more of the following sources, namely :

(i) From the ownership of or the trading or dealing in bonds, stocks or shares, debentures, mortgages, hypothecs, bills, notes or other similar property ;

(ii) From the lending of money with or without security, or by way of rent, annuity, royalty, interest or dividend; or

(iii) From or by virtue of any right, title or interest in or to any estate or trust.’’

There is no definition in the Act of the meaning of the word, " " family, ’ ’ and various definitions as found in the text books are so different that authority may be found for almost any conceivable desired signification. Jn its ordinary and primary meaning the term signifies the collective body of persons living in one house or under one head or manager—a collective body of persons consisting of parents or children or other relatives, domestics or servants residing together in one house or upon the same premises.

In a more restricted sense the term includes only parents and their children whether living together or not. It has also been held that the meaning of ‘‘family’’ includes persons yet to be born. Re New, Re Leavers, Re Morley, [1901] 2 Ch. 534.

To give effect to the appellant’s contention would be putting a much too restricted meaning on the word, "‘family,'' which could never have been contemplated by the Legislature. It would defeat the whole object of the legislation. If any such restriction were intended it should have been expressed in the Act. Furthermore, if the appellant’s contention is correct, the company might be a personal corporation today and cease to be one tomorrow upon the marriage of a shareholder’s son who upon marriage left the father’s household and set up his own household, and then upon the son becoming a widower he should return to live with his father the company would again become a personal corporation. Surely no such situation was or could be intended.

The word must be given a liberal interpretation such as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit.

I hold that T. N. Ramsey was during the period covered by the assessments in question a member of the appellant’s family within the meaning of the Act, and therefore the appeal must be dismissed.

The respondent will be entitled to his costs.

Judgment accordingly.