TRUEMAN
J.A.
(dissenting
in
part)
:—The
University
of
Manitoba
was
founded
by
ec.
11
of
the
Statutes
of
Manitoba,
1877
(40
Vict.)
as
a
body
politic
and
corporate.
By
s.
2
it
is
provided
that
the
corporation
may
purchase,
take
and
hold,
real
and
personal
estate
which
may
be
hereafter
sold,
ceded,
exchanged,
bequeathed
or
granted
to
the
University.
In
1887,
by
ce.
43
of
50
Vict.,
it
was
enacted
(s.
5)
that:
"‘All
property,
real
and
personal,
owned
by
or
held
for
the
use
of
the
University
.
.
.
Shall
be
exempt
from
taxation.”’
The
provision
was
continued
in
the
University
Act,
e.
171,
R.S.M.
1902,
by
s.
55;
in
c.
201,
R.S.M.
1913,
by
s.
58;
and
in
ce.
47
of
the
Acts
of
1936,
by
s.
63(1).
The
last
named
section
was
amended
by
ec.
45,
s.
1
of
the
Acts
of
1937-38
by
adding
the
following
proviso
thereto,
viz.
:
"‘Provided
that
from
and
after
the
first
day
of
January,
1938,
notwithstanding
this
Act
or
any
other
Act
of
the
Legislature
the
exemption
of
lands
and
buildings
from
taxation
shall
not
apply
to
such
lands
and
buildings,
if
any,
thereon
owned
by
The
University
of
Manitoba
in
rural
municipalities
which
are
not
directly
used
for
educational
purposes
and
which
are
revenue
bearing,
but
taxes
shall
not
be
payable
by
the
University
on
any
parcel
of
land
in
excess
of
the
net
revenue
arising
therefrom
in
the
year
of
taxation.
Revenue
herein
shall
include
principal,
interest
and
rent
but
not
the
proceeds
from
hay
and
wood
permits.
‘
‘
By
s.
3
of
c.
93
of
the
Acts
of
1935,
in
amendment
of
s.
278(3)
of
the
Winnipeg
Charter,
1918,
c.
120,
amended
by
s.
2
of
c.
92
of
the
Acts
of
1936,
it
was
enacted
as
follows:
‘‘
Provided
that
from
and
after
the
first
day
of
January,
1936,
notwithstanding
‘The
University
of
Manitoba
Act’
1936,
or
any
other
Act
of
the
Legislature,
the
exemption
of
lands
and
buildings
from
taxation
shall
not
apply
to
such
lands
and
buildings,
if
any,
thereon
owned
by
the
University
of
Manitoba
which
are
not
directly
used
for
educational
purposes
and
which
are
revenue
bearing,
but
taxes
shall
not
be
payable
on
any
parcel
of
land
in
excess
of
the
net
revenue
arising
therefrom
in
the
year
of
taxation.”
At
the
instance
of
the
University,
the
constitutionality
of
the
foregoing
taxing
authorization
is
made
the
subject
of
a
reference
to
this
Court
by
Order
in
Council.
Pursuant
to
Rupert’s
Land
Act,
1868
(Imp.),
e.
105,
and
Order
of
Her
Majesty
in
Council,
under
date
of
June
23,
1870,
Rupert’s
Land
and
the
North-Western
Territory
were
surrendered
by
the
Governor
and
Company
of
Adventurers
of
England
trading
into
Hudson’s
Bay
to
the
Crown
and
became
part
of
the
Dominion
of
Canada.
The
Manitoba
Act,
1870,
c.
3,
which
provided
for
the
formation
of
the
Province
out
of
Rupert
9
Land
and
the
North-Western
Territory,
enacts
by
s.
30
that
“All
ungranted
or
waste
lands
in
the
Province
shall
be
.
.
.
vested
in
the
Crown
and
administered
by
the
Government
of
Canada
for
the
purposes
of
the
Dominion.”
In
1885,
by
ec.
50
of
48-49
Vict.,
of
the
Statutes
of
Canada,
intituled
An
Act
for
the
final
settlement
of
the
Claims
made
by
the
Province
of
Manitoba
on
the
Dominion,
it
was
provided
by
s.
1
that:
“All
Crown
lands
in
Manitoba
which
may
be
shown
to
the
satisfaction
of
the
Dominion
Government
to
be
swamp
lands,
shall
be
transferred
to
the
Province
and
enure
wholly
to
its
benefit
and
uses.’’
Section
2
enacts
as
follows:
‘‘
An
allotment
of
land,
not
exceeding
one
hundred
and
fifty
thousand
acres,
of
fair
average
quality,
shall
be
selected
by
the
Dominion
Government
and
granted
as
an
endowment
to
the
University
of
Manitoba
for
its
maintenance
as
a
University
capable
of
giving
proper
training
in
the
higher
branches
of
education,
and
to
be
held
in
trust
for
that
purpose
upon
some
basis
or
scheme
to
be
framed
by
the
University
and
approved
by
the
Dominion
Government.’’
Section
7
provides
that:
‘‘The
grants
of
land
and
payments
authorized
by
the
foregoing
sections
shall
be
made
on
the
condition
that
they
be
accepted
by
the
Province
(such
acceptance
being
testified
by
an
Act
of
the
Legislature
of
Manitoba,)
as
a
full
settlement
of
all
claims
made
by
the
said
Province
.
..
and
all
other
questions
and
claims
discussed
between
the
Dominion
and
the
Provincial
Government,
up
to
the
tenth
day
of
January,
one
thousand
eight
hundred
and
eighty-five.
‘
‘
The
Manitoba
Legislature,
by
c.
38
of
49
Vict.,
1886,
after
reciting
said
Dominion
Act
and
Dominion
Act,
49
Vict.,
c.
8,
supplementary
thereto,
enacted
as
follows:
‘‘The
Legislature
of
the
Province
of
Manitoba
accepts
the
grants
and
payments
as
authorized
and
construed
by
the
above
recited
Acts
as
a
full
settlement
of
all
claims
by
the
said
Province
upon
the
Dominion,
as
therein
set
forth
.
.
.
”
A
final
basis
or
scheme,
pursuant
to
s.
2
of
said
Dominion
Act.
c.
00
of
the
Acts
of
1885
(re-enacted
by
c.
47,
R.S.C.
1886),
agreed
upon
by
the
Dominion
and
University,
is
set
out
on
a
patent
granted
by
the
Dominion
under
date
of
March
29,
1898,
the
delay
being
due
to
negotiations
as
to
its
terms
between
the
University
and
Dominion
authorities.
The
patent
grants,
conveys
and
assures
unto
the
University,
their
successors
and
assigns
forever
the
lands
therein
described:
"‘To
have
and
to
hold
the
said
lands
unto
the
said
‘The
University
of
Manitoba,’
their
successors
and
assigns
forever,
for
the
purposes
hereinafter
mentioned
and
upon
and
subject
to
the
trusts
and
conditions
hereinafter
expressed
and
contained
.
.
.
that
is
to
say
:
‘1.
That
the
said
University,
their
successors
and
assigns,
may
at
any
time
and
in
such
manner
and
on
such
terms
as
they
may
deem
proper,
sell
and
dispose
of,
mortgage,
pledge
or
lease
the
said
lands
or
any
portion
thereof,
and
receive
the
proceeds
or
income
resulting
therefrom.
"‘2.
That
the
said
University,
their
successors
or
assigns,
may
apply
such
portion
of
the
said
proceeds
and
income
as
may
be
considered
proper
to
pay
the
expenses
of
the
care
and
management
of
the
said
lands,
and
of
the.moneys
arising
therefrom;
to
purchase
a
suitable
site,
or
suitable
sites
for
and
to
erect
thereon
University
buildings
and
to
furnish
such
buildings,
and
shall
invest
such
portion
of
the
said
proceeds
as
may
not
be
immediately
required
for
any
of
the
said
objects,
in
such
securities
and
on
such
terms
as
the
said
University,
their
successors
or
assigns,
may
deem
proper
and
safe
for
the
purpose
of
deriving
an
income
therefrom,
and
may
apply
the
income
arising
out
of
the
leasing
of
the
said
lands
and
from
such
investments
or
any
portion
thereof
to
any
of
the
purposes
aforesaid
or
to
any
purposes
contemplated
or
provided
for
either
by
the
said
Chapter
47
of
the
Revised
Statutes
of
Canada,
or
by
the
Act
of
Incorporation
of
the
said
University,
or
any
acts
amending
the
same.
“Provided
always,
that
if
at
any
time
hereafter
the
said
University
shall
be
dissolved
or
shall
cease
to
exercise
its
functions
as
a
University,
then,
and
in
such
case,
any
and
all
of
the
said
lands
which
may
remain
unsold
shall
revert
to
and
become
revested
in
Us
and
Our
successors
as
of
Our
and
their
former
estate
therein,
subject
to
any
mortgage
or
pledge
which
may
have
been
given
by
the
said
University;
and
all
funds
in
the
hands
of
the
said
University,
their
suecessors
or
assigns,
the
proceeds
of,
or
which
in
any
way
result
from
the
sale,
lease,
mortgage,
pledge
or
other
disposal
of
the
said
lands,
shall
be
immediately
paid
over
to
Us,
Our
successors
and
assigns.
"
Provided
further,
and
it
is
hereby
made
an
express
condition
of
this
grant,
that
at
all
times
hereafter
the
said
University,
their
successors
and
assigns,
shall
keep
or
cause
to
be
kept
such
separate
and
distinct
accounts
of
the
proceeds
and
income
resulting
from
the
sale,
lease,
mortgage,
pledge
or
other
disposal
of
and
of
all
moneys
in
any
way
derived
from
or
arising
out
of
the
said
lands
as
shall
clearly
and
readily
disclose
the
amount
and
nature
thereof
as
well
as
all
dealings
therewith,
and
also
that
all
books,
vouchers
and
papers
containing,
or
in
any
way
relating
to
such
accounts,
shall
at
all
times
be
open
to
the
inspection
of
any
person
or
persons
appointed
by
Our
Governor
in
Council
to
inspect.
the
same.”
The
University
considers
that
its
position
is
further
fortified
by
the
Natural
Resources
Agreement
between
the
Dominion
and
Manitoba
which
was
entered
into
on
December
19,
1929.
The
Agreement,
after
reciting
inter
alia
that
by
s.
30
of
the
Manitoba
Act,
c.
3
of
33
Vict.,
it
is
provided
that
all
ungranted
or
waste
lands
in
the
Province
shall
be
vested
in
the
Crown
and
administered
by
the
Government
of
Canada
for
the
purposes
of
the
Dominion,
it
is
declared
in
para.
1
that
:
“In
order
that
the
Province
may
be
in
the
same
position
as
the
original
Provinces
of
Confederation
are
in
by
virtue
of
section
one
hundred
and
nine
of
‘The
British
North
America
Act,
1867,’
the
interest
of
the
Crown
in
all
Crown
lands
.
.
-
shall,
from
and
after
the
coming
into
force
of
this
agreement,
and
subject
as
therein
otherwise
provided,
belong
to
the
Provinee,
subject
to
any
trusts
existing
in
respect
thereof,
and
to
any
interest
other
than
that
of
the
Crown
in
the
same.’’
Paragraph
2
provides
that
:
"
"
The
Province
will
carry
out
in
accordance
with
the
terms
thereof
every
contract
to
purchase
or
lease
any
Crown
lands
.
.
.
and
every
other
arrangement
whereby
any
person
has
become
entitled
to
any
interest
therein
as
against
the
Crown,
and
further
agrees
not
to
affect
or
alter
any
term
of
any
such
.
.
.
arrangement
by
legislation
or
otherwise,
except
.
.
.
with
the
consent
of
all
the
parties
thereto
other
than
Canada
.
.
.”
Paragraph
25
states
that:
"This
agreement
is
made
subject
to
its
being
approved
by
the
Parliament
of
Canada
and
by
the
Legislature
of
the
Province
of
Manitoba,
and
shall
take
effect
on
the
fifteenth
day
of
July,
1930,
if
His
Majesty
has
theretofore
given
His
Assent
to
an
Act
of
the
Parliament
of
the
United
Kingdom
of
Great
Britain
and
Northern
Ireland
confirming
the
same
.
.
.”
Approval
of
the
agreement
was
given
by
the
Legislature
of
Manitoba,
by
ec.
30
of
the
Statutes
of
1930;
and
by
the
Parliament
of
Canada,
by
c.
29
of
the
Statutes
of
1930
;
and
confirmed
by
the
Parliament
of
the
United
Kingdom
of
Great
Britain
and
Northern
Ireland,
by
the
B.N.A.
Act,
1930,
¢.
26
of
20
&
21
Geo.
5,
assented
to
July
10,
1930.
Of
the
said
endowment
of
150,000
acres
of
land,
Mr.
Allen
states
that
substantially
the
whole
had
been
transferred
to
the
University
prior
to
July
15,
1930.
In
a
letter
to
him
from
the
Dominion
Department
of
Mines
and
Resources,
under
date
of
January
20,
1939,
it
is
stated
that
the
area
for
which
patents
were
issued
comprise
149,701.28
acres.
Of
these
it
appears
that
45,000
acres
remain
unsold.
The
foregoing
material
speaks
for
itself,
and
leaves
little
room
for
observation
or
legal
construction.
There
is
first
the
Dominion
Act
of
1885
by
which
the
endowment
is
to
be
held
in
trust
for
the
maintenance
of
the
University
"‘upon
some
basis
or
scheme
to
be
framed
by
the
University
and
approved
by
the
Dominion
Government.’’
Then,
by
s.
7,
it
is
provided,
inter
alia,
that
the
grants
of
land
(ss.
1
and
2)
are
made
on
the
condition
that
they
be
accepted
by
Act
of
the
Legislature
of
Manitoba,
as
a
full
settlement
of
all
claims
made
by
the
Province.
Pursuant
thereto
the
Manitoba
Act
of
1886
recites
said
Dominion
Act
and
accepts,
inter
alia,
said
grants
as
a
full
settlement
of
said
claims.
The
patent
which
thereafter
followed,
and
which
grants
an
estate
in
fee
simple
in
the
lands
to
the
University,
is
drawn,
it
will
have
been
noticed,
with
marked
deliberation
in
order
to
ensure
that
the
trusts
thereby
created
should
be
scrupulously
delimited
and
observed
and
that
the
proceeds
from
.
sales,
mortgages,
pledges,
and
leases
of
the
land,
and
income
therefrom,
should
be
strictly
applied
to
the
specific
purposes
enumerated
therein.
These
need
not
be
recapitulated.
What
must
be
emphasized
is
the
close
and
continuing
oversight
of
the
perform-
ance
of
the
trust
the
patent
reserves
to
the
Dominion
and
the.
reversion
rights
of
the
Dominion
in
the
event
of
the
University’s
dissolution.
Studying
the
patent,
the
Dominion
Act
of
1885,
and
the
Mamtoba
Act
of
1886,
my
conclusion
is
that
the
trust
set
out
in
the
patent
is
a
statutory
trust
and
binds
the
Province
as
well
as
the
University,
with
the
result
that
no
encroachment
thereon
may
be
made
by
provincial
legislation.
See
C.P.R.
V.
Burnett
(1889),
5
Man.
R.
395;
C.P.R.
v.
Cornwallis
(1890),
7
Man.
R.
1;
19
S.C.R.
702;
North
Cypress
v.
C.P.R.
(1903),
14
Man.
R.
382
;
35
S.C.R.
550.
The
integrity
of
an
endowment
fund,
with
restriction
upon
the
uses
of
income
therefrom,
even
though
not
created
by
a»
legal
trust,
is
upheld
by
the
New
York
Court
of
Appeals
in
St.
Joseph’s
Hospital
v.
Bennett
(1939),
281
N.Y.
115,
22
N.E.
(2nd)
305.
In
view
of
the
terms
of
the
taxing
power
conferred
upon
municipalities
by
the
impeached
legislation,
it.
should
be
pointed
out
that
none
of
the
lands
still
unsold
is
farmed
by
the
University,
and
that
any
revenue
derived
from
such
land
is
exclusively
principal,
interest
or
rent
within
the
words
of
the
patent.
I
am
not
insensible
to
what
can
be
said
on
the
other
side.
There
is
the
fact
that
the
Manitoba
Legislature,
by
s.
5
of
c.
43
of
the
Acts
of
1887
(supra)
enacted
that:
"‘All
property,
real
or
personal,
owned
by
or
held
for
the
use
of
the
University
.
.
..
shall
be
exempt
from
taxation,’’
and
that
this
legislation
remained
in
foree
until
qualified
by
the
enactments
made
the
subject
of
the
reference.
I
do
not
read
the
foregoing
provision
as
indicative
that
the
University
and
the
Legislature
studied
the
patent
and
the
Dominion
Act
of
1885
and
the
Manitoba
Act
of
1886,
and
came
to
the
conclusion
that
unless
taxation
was
prohibited
by
the
Province
the
lands
were
taxable
by
municipalities.
Even
had
that
opinion
been
arrived
at,
it
could
have
no
weight
or
place
in
the
argument
herein.
It
could
equally
be
said
that
the
legislation
was
passed
for
the
guidance
of
municipalities
and
to
prevent
the
question
being
made
the
subject
of
litigation.
Had
the
power
to
tax
been
given
to
municipalities
by
the
Act
of
1887
no
one
can
doubt
that
it
would
have
been
resisted
as
a
violation
of
the
trust.
To
have
exposed
the
land
to
taxation
would
conceivably
have
seriously
impaired
the
trust
in
event
of
the
lands
not
being
quickly
sold.
Continued
against
the
present
unsold
lands
it
would
probably
have
nullified
the
trust
with
respect
to
them
:
Spooner
Oils
Ltd.
v.
Turner
Valley
Gas
Conservation
Board,
[1933],
4
D.L.R.
545
at
pp.
558-9,
S.C.R.
629.
Had
the
University
asked
for
drainage
or
ditching
of
the
lands
or
other
municipal
services
in
connection
with
them,
the
con-
dition
of
getting
them
would
be
that
they
be
paid
for.
See
Minister
of
Justice
for
Canada
v.
Levis,
45
D.L.R.
180,
[1919]
A.C.
505.
‘m
The
real
estate
owned
by
the
University
in
the
City
of
Winnipeg,
and
made
subject
to
taxation
by
the
city
by
virtue
of
legislative
amendments
to
the
University
‘s
charter,
represents
lands
purchased
for
investment
by
the
University
from
proceeds
of
sales
of
said
endowment
lands,
and
lands
on
which
the
University
made
mortgage
loans
from
the
same
source
and
to
which
the
University
acquired
title
through
foreclosure
and
other
default
proceedings.
While
the
Dominion
patent
authorizes
the
University
to
invest
proceeds
from
the
sales,
etc.,
of
land
thereby
conveyed
in
"such
securities
and
on
such
terms
as
the
said
University
.
.
.
may
deem
proper
and
safe
for
the
purpose
of
deriving
an
income
therefrom,”
it
is
open
to
question
whether
mortgage
loans
on
real
estate
are
within
the
words
in
the
foregoing
context.
See
Re
Rayner,
[1904]
1
Ch.
176;
Re
Gent
&
Eason
s
Contract,
[1905]
1
Ch.
386:
Re
Johnson,
Greenwood
v.
Robinson
(1903),
89
L.T.
84,
520;
Re
Tapp
(1905),
74
L.J.
Ch.
023.
What
is
certain
is
that
neither
the
purchase
of
real
estate
nor
its
acquisition
by
reason
of
default
in
payment
of
mortgage
loans
is
within
the
clause.
It
follows
that
these
lands
are
subject
to
taxation
under
said
amendments
to
city’s
charter.
The
contention
can
be
made,
and
is
made
by
Mr.
Allen,
that
as
the
patent
granted
to
the
University
an
estate
in
fee
simple
in
the
land,
it
was
necessary
that
their
exemption
from
taxation,
if
such
was
intended,
should
have
been
expressly
declared
in
the
patent.
An
analogy
is
drawn
from
the
contract
between
the
Dominion
and
the
Canadian
Pacific
R.
Co.
for
the
construction
of
the
main
line
of
the
railway
to
the
British
Columbia
seaboard.
In
aid
of
the
company
the
contract
provided
for
a
grant
to
it
by
the
Dominion
of
25,000,000
acres
of
Crown
lands
in
western
Canada,
and
by
el.
16
it
was
provided
that
the
lands
until
they
were
either
sold
or
occupied
should
be
free
from
taxation
by
1
rovinces
thereafter
to
be
established,
or
by
any
municipal
corporation
therein.
The
contract
was
confirmed
by
Dominion
Act,
44
Vict.,
c.
1.
By
Act,
44
Viet.,
c.
14,
increasing
the
boundaries
of
Manitoba,
it
is
provided
(s.
2)
that:
‘The
terms
and
conditions
upon
which
such
increase
is
made
are
as
follows:
‘(b)
The
said
increased
limit
and
the
territory
thereby
added
to
the
Province
of
Manitoba
shall
be
subject
to
all
such
provisions
as
may
have
been
or
shall
hereafter
be
enacted,
respecting
the
Canadian
Pacific
Railway
and
the
land
to
be
granted
in
aid
thereof.
‘
‘‘
The
terms
and
conditions
were
accepted
by
the
Legislature
of
Manitoba
by
Act,
44
Vict.,
c.
6.
The
grant
of
lands
to
the
railway
company
has
nothing
in
common
with
the
University
endowment.
The
contract
with
the
company
necessarily
gave
to
the
company
complete
control
of
the
-sale
or
disposition
of
the
lands
thereby
granted,
and
in
the
use
of
the
proceeds.
The
University,
while
empowered
by
the
patent
to
sell,
mortgage,
lease
or
pledge
the
lands
granted
to
it,
is
restricted
in
its
use
of
the
proceeds
therefrom
to
the
specific
objects
set
out
in
the
patent
and
put
beyond
reach
of
change
by
the
legislation
associated
therewith.
Counsel
for
the
Crown
and
for
the
University
devoted
considerable
argument
to
insisting
upon
a
literal
reading
of
s.
129
of
the
B.N.A.
Act,
by
which
it
is
declared
that:
"No
Lands
or
Property
belonging
to
Canada
or
any
Province
shall
be
liable
to
Taxation.”
Counsel
for
the
Province
was
concerned
to
show
that
the
University
is
not
an
arm
or
function
of
the
Crown,
and
is
therefore
not
within
the
section.
Counsel
for
the
University
was
equally
tenacious
in
pressing
the
view
that
the
University
stood
in
such
a
relationship,
for
which
reason
the
Province
could
not
authorize
taxation
of
the
lands
in
question.
Qui
haeret
in
litera
haeret
in
cortice!
The
section
was
enacted
to
serve
a
two-fold
purpose.
One
was
that
it
should
be
made
clear
that
neither
the
Dominion
nor
the
Province
in
the
exercise
of
their
taxing
powers
should
undertake
to
tax
the
lands
or
property
of
the
other.
The
other
purpose
was
to
serve
notice
on
municipalities
that
Crown
lands
are
not
subject
to
municipal
taxation.
To
suppose
that
the
section
forbids
the
Province
from
authorizing
municipal
taxation
of
its
own
lands
or
property
is
to
impose
a
singularly
inept
restriction
upon
the
plenary
powers
the
Province
is
endowed
with
by
the
B.N.A.
Act.
In
Hodge
v.
The
Queen
(1883),
9
App.
Cas.
117,
the
Judicial
Committee
said
(p.
132)
:
"When
the
British
North
America
Act
enacted
that
there
should
be
a
legislature
for
Ontario,
and
that
its
legislative
assembly
should
have
exclusive
authority
to
make
laws
for
the
Province
and
for
provincial
purposes
in
relation
to
the
matters
enumerated
in
sect.
92,
it
conferred
powers
not
in
any
sense
to
be
exercised
by
delegation
from
or
as
agents
of
the
Imperial
Parliament,
but
authority
as
plenary
and
as
ample
within
the
limits
prescribed
by
sect.
92
as
the
Imperial
Parliament
in
the
plenitude
of
its
power
possessed
and
could
bestow.
Within
these
limits
of
subjects
and
area
the
local
legislature
is
supreme,
and
has
the
same
authority
as
the
Imperial
Parliament,
or
the
Parliament
of
the
Dominion,
would
have
had
under
like
circumstances
to
confide
to
a
municipal
institution
or
body
of
its
own
creation
authority
to
make
by-laws
or
resolutions
as
to
subjects
specified
in
the
enactment,
and
with
the
object
of
carrying
the
enactment
into
operation
and
effect.’’
See
also
R.
v.
Anderson
(1930),
54
Can.
C.C.
321
at
p.
323,
39
Man.
R.
84,
where
reference
is
made
to
Lord
Loreburn’s
statement,
speaking
for
the
Judicial
Committee,
in
A.-G.
Ont.
v.
A.-G.
Can.,
3
D.L.R.
509
at
p.
013,
[1912]
A.C.
571,
that
"‘whatever
belongs
to
self-government
in
Canada
belongs
either
to
the
Dominion
or
to
the
Provinces,
within
the
limits
of
the
British
North
America
Act.’
1
The
Legislature
of
the
Province
having
by
s.
92
of
the
B.N.A.
Act
power
to
exclusively
make
laws
in
relation
to
‘‘2.
Direct
Taxation
within
the
Province
in
order
to
the
raising
of
a
Revenue
for
Provincial
Purposes,’’
can
by
virtue
thereof
and
(8)
authorize
municipal
taxation
of
provincial
lands
or
property:
A.-G.
Ont.
v.
A.-G.
Can.,
[1896]
A.C.
348
at
pp.
363-4;
Montreal
v.
Beauvais
(1909),
42
S.C.R.
211
at
p.
218;
Smith
v.
London
(1909),
26
O.L.R.
133
at
p.
154.
In
A.-G.
B.C.
v.
A.-G.
Can.,
[1923]
4
D.L.R.
669,
42
Can.
C.C.
398,
[1924]
A.C.
222,
it
is
pointed
out
by
the
Judicial
Committee
that
s.
125
is
not
to
be
taken
alone
and
read
without
consideration
of
the
scheme
of
the
B.N.A.
Act,
with
its
different
allocations
of
powers
and
authorities
to
the
provincial
and
Dominion
Governments
:
"‘It
is
to
be
found
in
a
series
of
sections
which
beginning
with
see.
102
distribute
as
between
the
Dominion
and
the
Province
certain
distinct
classes
of
property
and
confer
control
upon
the
Province
with
regard
to
the
part
allocated
to
them.
But
this
does
not
exclude
the
operation
of
Dominion
laws
made
in
exercise
of
the
authority
conferred
by
sec.
91.’’
(pp.
670-1
D.L.R.,
p.
400
Can.
C.C.)
It
is
on
this
principle
that
a
provincial
Legislature
may
impose
direct
taxation
upon
those
portions
of
a
Dominion
railway
which
are
within
the
Province
in
order
to
the
raising
of
a
revenue
for
provincial
purposes:
C.P.R.
v.
Parish
of
Notre
Dame
de
Bonsecours,
[1899]
A.C.
367.
So
while
s.
125
precludes
the
taxation
of
any
interest
the
Crown
has
in
any
land
or
property,
it
is
within
the
power
of
a
Province
to
authorize
the
taxation
of
the
beneficial
or
equitable
interest
of
a
person
in
lands
to
which
the
Crown
in
the
right
of
the
Dominion
holds
the
legal
title
and
retains
some
beneficial
interest
as
well:
Calgary
&
Edmonton
Land
Co.
v.
A.-G.
Alta.
(1911),
45
S.C.R.
170
at
p.
191
;
Smith
v.
Vermilion
Hills,
30
D.L.R.
83,
[1916]
2
A.C.
569;
Southern
Alberta
Land
Co.
v.
McLean
(1916),
29
D.L.R.
403,
53
S.C.R.
151.
See
also
Montreal
v.
A.-G.
Can.,
70
D.L.R.
248,
[1923]
A.C.
136,
followed
in
Halifax
v.
Fairbanks,
[1927]
4
D.L.R.
945,
[1928]
A.C.
117.
Section
125
states
a
common
law
principle.
Property
owned
and
occupied
by
the
Crown,
or
in
which
the
Crown
has
a
beneficial
interest,
is
exempt
from
taxation
unless
rendered
liable
by
statute,
either
by
express
words
or
necessary
implication.
See
Hornsey
Urban
Dist.
Council
v.
Hennell,
[1902]
2
K.B.
73
at
p.
80.
The
exemption
is
held
to
apply
where
Crown
property
is
occupied
by
bare
trustees
for
public
purposes,
such
as
are
required
and
created
by
the
Government
of
the
country
:
Mersey
Docks
&
Harbour
Board
Trustees
v.
Cameron,
11
H.L.C.
443
at
p.
005,
11
E.R.
1405.
A
further
argument
by
Mr.
Allen
should
be
noticed,
lest
it
be
deemed
that
it
was
overlooked.
It
is
concerned
with
the
need
he
felt
of
getting
rid
of
the
reversionary
interest
in
the
lands,
etc.,
in
the
Dominion
Crown
by
reason
of
the
reservation
thereof
in
the
patent,
in
event
of
the
dissolution
of
the
University,
his
view
apparently
being
that
if
this
reservation
still
exists
it
constitutes
a
bar
to
taxation
by
rural
municipalities
by
the
legislation
in
question.
With
all
respect
I
cannot
admit,
so
far
as
the
Crown’s
case
is
concerned,
the
relevance
of
this
argument.
The
reference
turns,
in
my
opinion,
upon
the
material
I
have
set
out,
and
presents
no
other
issue
than
whether
or
not
a
statutory
trust
was
created,
and,
if
so,
whether
it
precludes
the
enactment
of
said
legislation.
l'he
reterence
propounds
the
following
questions
:
"‘(1)
Is
the
University
of
Manitoba
an
emanation
or
arm
or
braneh
of
the
Government
of
Manitoba
so
that
any
property
standing
in
its
name
is
therefore
exempt
from
taxation?
<A.
For
the
reasons
I
have
stated,
the
question
requires
no
answer.
"‘2.
Is
s.
3
of
the
said
Statutes
of
Manitoba,
being
c.
93
of
1935,
as
amended
by
s.
2
of
e.
92
of
the
Statutes
of
Manitoba,
1936,
within
the
legislative
competence
of
Manitoba
to
enact?
(This
relates
to
taxation
by
the
City
of
Winnipeg.)
A.
Yes.
«
(3)
Is
s.
1
of
the
Statutes
of
Manitoba,
1937-38,
e.
45,
within
the
legislative
competence
of
the
Province
to
enact?
(This
relates
to
taxation
by
municipalities.)
<A.
No.
(4)
Has
the
Province
of
Manitoba
any
legislative
competence
to
authorize
the
imposition
of
taxation
upon
"
"
(a)
any
part
of
the
150,000
acres
of
land
conveyed
to
the
University
by
the
Dominion
as
an
endowment,
and
still
remaining
in
the
name
of
the
University
unsold?
<A.
No.
(b)
any
part
of
the
proceeds
of
the
sale
or
other
disposition
of
any
part
of
the
said
endowment
grant?
A.
The
question
in
this
general
form
cannot
be
answered.
"‘(c)
any
part
of
the
investments
of
the
proceeds
or
income
from
any
part
of
the
endowment?
A.
The
answer
to
(b)
applies
to
this
question.
"‘(d)
any
property
which
may
be
said
to
result
from
or
arise
out
of
the
management
or
disposition
of
the
said
endowment
;
or
"
(e)
the
estate
or
interest
of
the
University
therein
’?
A.
The
answer
to
(b)
applies
to
Qq.
(d)
and
(e).‘‘
ROBSON
J.A.:—This
is
a
reference
by
His
Honour
the
Lieutenant-Governor
under
the
Act
for
Expediting
the
Decision
of
Constitutional
and
other
Provincial
Questions,
R.S.M.
1913,
c.
38.
The
questions
now
put
relate
to
the
right
of
the
Province
to
tax
lands
which
formed
part
of
the
endowment
of
the
University
of
Manitoba.
The
grant
was
made
by
the
Crown
at
a
time
when
lands
not
already
granted
were
held
by
the
Crown
in
the
right
of
the
Dominion.
Section
2
of
c.
50
of
the
Statutes
of
Canada,
48-49
Vict.
(1885),
being
An
Act
for
the
final
settlement
of
the
Claims
made
by
the
Province
of
Manitoba
on
the
Dominion,
is
as
follows:
"‘An
allotment
of
land,
not
exceeding
one
hundred
and
fifty
thousand
acres,
of
fair
average
quality,
shall
be
selected
by
the
Dominion
Government
and
granted
as
an
endowment
to
the
University
of
Manitoba
for
its
maintenance
as
a
University
capable
of
giving
proper
training
in
the
higher
branches
of
education,
and
to
be
held
in
trust
for
that
purpose
upon
some
basis
or
scheme
to
be
framed
by
the
University
and
approved
by
the
Dominion
Government.
’
’
The
form
of
Crown
patent
to
be
used
was
settled
in
1898
and
therefore
long
before
the
agreement
whereby
all
land
resources
were
to
be
transferred
from
the
Dominion
to
the
Province.
The
form
of
grant
so
decided
on
and
which
has
been
followed,
after
the
formal
part,
reads
as
follows
:
“Now
Know
YE
That
WE
do
by
these
presents
grant,
convey
and
assure
unto
the
said
University
of
Manitoba,
their
successors
and
assigns
forever,
all
that
parcel
or
tract
of
land,
situate,
lying
and
being
in
the
(Description
of
property.)
“To
have
and
to
hold
the
said
lands
unto
the
said
‘The
University
of
Manitoba,’
their
successors
and
assigns
forever,
for
the
purposes
hereinafter
mentioned
and
upon
and
subject
to
the
trusts
and
conditions
hereinafter
expressed
and
contained;
saving
and
reserving
nevertheless,
unto
Us,
Our
successors
and
assigns,
the
free
uses,
passage
and
enjoyment
of,
in,
over,
and
upon
all
navigable
waters
that
now
are
or
may
be
hereafter,
found
on,
or
under,
or
flowing
through
or
upon
any
part
of
the
said
parcel
or
tract
of
land;
also
reserving
thereout
and
therefrom
all
rights
of
fishery
and
fishing
and
occupation
in
con-
nection
therewith,
upon,
around
and
adjacent
to
said
land,
and
also
the
privilege
of
landing
from
and
mooring
boats
and
vessels
upon
any
part
of
the
said
lands,
and
using
the
said
lands
in
connection
with
the
rights
of
fishery
and
fishing
hereby
reserved,
so
far
as
may
be
reasonably
necessary
to
the
exercise
of
such
rights.
"
"
Provided
always
that
the
said
lands
are
to
be
held
by
the
said
University,
their
successors
and
assigns
for
the
purposes
hereinafter
mentioned,
and
upon
and
subject
to
the
following
trusts
and
purposes,
that
is
to
say
:
"1.
That
the
said
University,
their
successors
and
assigns,
may
at
any
time
and
in
such
manner
and
on
such
terms
as
they
may
deem
proper,
sell
and
dispose
of,
mortgage,
pledge
or
lease
the
said
lands
or
any
portion
thereof,
and
receive
the
proceeds
or
income
resulting
therefrom.
2.
That
the
said
University,
their
successors
or
assigns,
may
apply
such
portion
of
the
said
proceeds
and
income
as
may
be
considered
proper
to
pay
the
expenses
of
the
care
and
management
of
the
said
lands,
and
of
the
moneys
arising
therefrom;
to
purchase
a
suitable
site,
or
suitable
sites
for
and
to
erect
thereon
University
buildings
and
to
furnish
such
buildings,
and
shall
invest
such
portion
of
the
said
proceeds
as
may
not
be
immediately
required
for
any
of
the
said
objects,
in
such
securities
and
on
such
terms
as
the
said
University,
their
successors
or
assigns,
may
deem
proper
and
safe
for
the
purpose
of
deriving
an
income
therefrom,
and
may
apply
the
income
arising
out
of
the
leasing
of
the
said
lands
and
from
such
investments
or
any
portion
thereof
to
any
of
the
purposes
aforesaid
or
to
any
purposes
contemplated
or
provided
for
either
by
the
said
Chapter
47
of
the
Revised
Statutes
of
Canada,
or
by
the
Act
of
Incorporation
of
the
said
University,
or
Acts
amending
the
same.
Provided
always,
that
if
at
any
time
hereafter
the
said
University
shall
be
dissolved
or
shall
cease
to
exercise
its
functions
as
a
University,
then,
and
in
such
case,
any
and
all
of
the
said
lands
which
may
remain
unsold
shall
revert
to
and
become
revested
in
Us
and
Our
successors
as
of
Our
and
their
former
estate
therein,
subject
to
any
mortgage
or
pledge
which
may
have
been
given
by
the
said
University;
and
all
funds
in
the
hands
of
the
said
University,
their
suecessors
or
assigns,
the
proceeds
of,
or
Which
in
any
way
result
from
the
sale,
lease,
mortgage,
pledge
or
other
disposal
of
the
said
lands,
shall
be
immediately
paid
over
to
Us,
Our
successors
or
assigns.
“Provided
further,
and
it
is
hereby
made
an
express
condition
of
this
grant,
that
at
all
times
hereafter
the
said
University,
their
successors
and
assigns,
shall
keep
or
cause
to
be
kept
such
separate
and
distinct
accounts
of
the
proceeds
and
income
resulting
from
the
sale,
lease,
mortgage,
pledge
or
other
disposal
of
and
of
all
moneys
in
any
way
derived
from
or
arising
out
of
the
said
lands
as
shall
clearly
and
readily
disclose
the
amount
and
nature
thereof
as
well
as
all
dealings
therewith,
and
also
that
all
books,
vouchers
and
papers
containing,
or
in
any
way
relating
to
such
accounts,
shall
at
all
times
be
open
to
the
inspection
of
any
person
or
persons
appointed
by
Our
Governor
in
Council
to
inspect
the
same.’’
It
is
now
contended
by
the
University
that
under
this
form
of
patent
the
University
was
not
the
owner
of
an
estate
in
fee
simple
but
merely
the
holder
of
a
power
of
sale
to
realize
on
the
lands
for
the
purposes
set
out
and
that
the
Dominion
still
held
and
in
fact
now
holds
any
lands
not
disposed
of
by
the
University
under
the
power.
The
result
would
be
that
under
s.
125
of
the
B.N.A.
Act
the
residue
of
lands,
being
on
that
hypothesis
Dominion
lands,
would
not
be
subject
to
any
form
of
provincial
taxation.
The
Attorney-General
of
the
Province
contests
this.
The
Minister
of
Justice
was
notified
of
this
reference
but
did
not
appear
nor
enter
into
the
controversy.
A
great
deal
of
material
was
adduced
showing
the
difficulties
encountered
in
settling
the
form
of
patent
but
in
my
view
inquiry
into
such
matters
is
irrelevant.
It
is
my
view
that
the
expression
in
the
first
proviso
"‘subject
to
the
following
trusts
and
purposes’’
does
not
restrict
the
scope
of
the
grant—all
the
"‘trusts
and
purposes’’
stated
are
merely
the
aims
of
the
University
which
the
University
would
naturally
discharge
and
accomplish
in
its
own
normal
operations.
Clause
2
of
the
first
proviso
authorizes
use
of
Income
to
any
purpose
contemplated
"
"
by
the
Act
of
Incorporation
of
the
said
University
or
any
Acts
amending
the
same.
‘
‘
There
is
nothing
restrictive
about
that.
The
second
proviso
provides
for
reverter
in
case
the
University
shall
be
dissolved
or
cease
to
exercise
its
functions
as
a
University.
To
my
mind
this
is
no
more
than
a
condition
subsequent.
Whether
it
is
repugnant
to
the
deed
and
so
void
need
not
be
discussed.
At
all
events
the
estate
remains
vested
in
the
University
absolutely
meanwhile.
The
significant
word
in
s.
2
of
c.
50
{supra)
is
"granted”
and
as
might
be
expected
the
patent
reads
‘‘grant,
convey
and
assure.
’
‘
These
are
words
of
conveyance
in
fee
simple
and
mean
that
an
estate
in
fee
simple
in
the
lands
was
to
be
conveyed
to
the
University.
The
title
then
left
the
Crown
and
the
Crown
had
no
further
estate.
The
phrase
grant
from
the
Crown
came
in
for
consideration
in
the
several
C.P.R.
land
grant
cases
such
as
North
Cypress
v.
C.P.
Ry.
Co.,
35
8.C.R.
550;
R.
v.
C.P.R.,
[1911]
A.C.
328.
That
this
is
the
effect
is
clear
from
the
language
of
these
instruments,
but
from
the
necessities
of
the
case
it
was
to
be
so,
for,
if
trust
it
was,
it
was
an
active
trust
and
the
University
needed
the
title
to
carry
out
its
obligations
whence
the
Courts,
apart
from
the
conveyancer’s
language,
would
hold
there
was
an
intention
that
the
University
be
seized
in
fee
simple.
According
to
the
patent
the
University
"‘may
at
any
time
.
.
.
.
sell
and
dispose
of,
mortgage,
pledge
or
lease
the
said
lands
or
any
portion
thereof
and
receive
the
proceeds
or
income
resulting
therefrom.’’
It
could
not
do
this
without
the
fee:
Underhill
on
Trusts,
7th
ed.,
pp.
193-196,
ec.
II:
Re
Lashmar,
[1891]
1
Ch.
258,
per
Lindley,
L.J.
at
p.
270.
Then
the
instrument
goes
on
to
say
that
the
University
may
apply
the
proceeds
for
its
own
purposes,
in
other
words
it
is
itself
the
beneficiary
of
the
supposed
trust.
The
case
was
argued
as
if
the
University
were
a
bare
trustee
of
the
land
for
the
Crown.
It
is
in
no
such
position.
The
University
is
beneficial
owner
of
the
land
subject
to
a
right
in
the
Crown
to
require
a
reconveyance
of
the
residue
on
hand
in
case
the
University
dissolves
or
ceases
to
function.
Until
that
at
present
remote
possibility
happens
and
is
seized
upon
by
the
Crown
the
University’s
title
remains
that
of
a
person
holding
in
fee
simple.
It
is
the
title
to
the
land
that
is
under
discussion
here.
No
one
1S
questioning
that
the
Crown
has
an
immature
personal
right
to
certain
performance
but
it
is
in
my
opinion
the
right
of
a
covenantee
and
not
a
present
estate
or
interest
in
the
land.
This
to
my
mind
ends
the
matter
on
this
branch
but,
by
way
of
perhaps
unnecessary
addition,
I
would
say
I
cannot
see
how
there
can
be
passed
over
the
fact
that
though
the
Crown
might
retain
an
interest
nevertheless
the
University
has
and
will
have,
as
long
as
it
carries
on,
an
interest
which
it
is
within
the
power
of
the
Province
to
tax.
See
Calgary
&
Edmonton
Land
Co.
v.
A.-G.
Alta.,
45
S.C.R.
170,
and
in
Alberta,
2
A.L.R.
446,
per
Beck
J.;
Smith
v.
Vermilion
Hills,
30
D.L.R.
83;
Southern
Alberta
Land
Co.
v.
McLean,
29
D.L.R.
403.
A
glance
at
the
two
clauses
of
the
first
proviso
shows
such
an
interest.
I
think
that
these
provisoes
cannot
be
put
on
higher
ground
than
that
they
are
conditions
subsequent.
In
Leith’s
Blackstone,
2nd
ed.,
p.
183
there
appears
the
following:
“‘In
all
these
instances
of
limitations
or
conditions
subsequent,
it
is
to
be
observed
that
so
long
as
the
condition,
either
express
or
implied,
either
in
deed
or
in
law,
remains
unbroken,
the
grantee
may
have
an
estate
of
freehold,
provided
the
estate
upon
which
such
condition
is
annexed
be
in
itself
of
a
free-
hold
nature;
as
if
the
original
grant
express
either
an
estate
of
inheritance
or
for
life;
or
no
estate
at
all,
which
is
constructively
an
estate
for
life.
For,
the
breach
of
these
conditions
being
contingent
and
uncertain,
this
uncertainty
preserves
the
freehold:
because
the
estate
is
capable
to
last
for
ever,
or
at
least
for
the
life
of
the
tenant,
supposing
the
condition
to
remain
unbroken.”
I
think
the
case
of
Kennedy
v.
Toronto
(1886),
12
O.R.
211
has
much
application
here.
It
was
the
decision
of
Ferguson
J.,
on
demurrer.
The
case
was
exhaustively
argued
by
eminent
counsel.
It
touches
this
case
in
several
aspects.
I
will
describe
it
as
briefly
as
possible,
using
the
headnote
to
great
extent.
Certain
Ordnance
land
vested
in
the
Crown
was
in
1858
patented
to
the
corporation
of
the
City
of
Toronto
with
the
following
clause
in
the
patent:
“Provided-always
and
this
grant
is
subject
to
the
following
conditions,
viz.
that
the
land
.
.
.
.
shall
be
dedicated
by
the
said
corporation
and
by
them
maintained
for
the
purpose
of
a
public
park
for
the
use,
benefit
and
recreation
of
the
inhabitants
of
the
said
City
of
Toronto
for
all
time
to
come.
‘
‘
In
an
action
by
a
ratepayer
to
prevent
the
land
being
used
as
a
cattle
market
and
money
being
spent
on
it
for
that
purpose,
in
which
it
was
contended
that
the
land
was
granted
upon
a
condition
under
which
the
Crown
might
retake
it,
it
was
held
on
demurrer
that
the
words
in
the
patent
“Provided
always
and
this
grant
is
subject
to
the
following
conditions’’
did
not
create
a
condition
annexed
to
the
estate
granted
but
a
trust
was
created
the
same
as
if
the
words
used
had
been
‘‘upon
the
following
trusts’’
and
that
by
the
grant
the
grantors
parted
with
all
their
estate
and
interest
(see
per
Ferguson
J.
at
pp.
222-225).
See
also
Yates
v.
University
College,
London
(1875),
L.R.
7
H.L.
438.
In
A.-G.
Can.
v.
A.-G.
Ont.,
[1897]
A.C.
199
at
p.
210,
(a
converse
case)
Lord
Watson
dealt
with
the
phrase
“subject
to
any
trusts
existing
in
respect
thereof
‘
‘
as
follows:
"
Their
Lordships
are
not
prepared
to
hold
that
the
word
‘trust’
was
meant
by
the
Legislature
to
be
strictly
limited
to
such
proper
trusts
as
a
court
of
equity
would
undertake
to
administer
;
but,
in
their
opinion,
it
must
at
least
have
been
intended
to
signify
the
existence
of
a
contractual
or
legal
duty,
incumbent
upon
the
holder
of
the
beneficial
estate
or
its
proceeds,
to
make
payment,
out
of
one
or
other
of
these,
of
the
debt
due
to
the
creditor
to
whom
that
duty
ought
to
be
fulfilled.”
In
the
view
I
take
as
to
the
title
the
Natural
Resources
agreement
has
no
bearing
on
the
case
in
that
the
lands
were
transfer-
red
to
the
University
by
the
Dominion
long
before
the
agreement
for
the
transfer
was
effected:
except
that
the
Province
succeeds
to
the
right
to
enforce
the
terms
on
which
the
grant
was
made.
With
regard
to
the
Spooner
Oils
case,
[1933]
4
D.L.R.
545
which
was
given
much
prominence
in
argument,
it
is
to
be
observed
that
here
the
trust
or
obligation
is
in
favor
of
the
Crown
and
is
not
a
contractual
license
by
the
Dominion
Crown
(as
in
the
Spooner
Oils
case)
which
under
the
terms
of
the
Resources
Agreement
the
Province
could
not
reduce.
Here
the
Crown’s
obligation
was
fulfilled
long
ago
by
the
issue
of
patents
for
the
lands.
The
possibility
of
reverter
that
was
left
in
the
Dominion
Crown
with
regard
to
the
granted
lands
would
go
to
the
Province
untrammelled
by
any
condition.
In
addition
the
grant
of
the
150,000
acres
was,
as
stated
in
the
statute,
in
part
settlement
of
a
claim
by
the
Province
against
the
Dominion.
In
my
opinion
the
Province
now
possesses
the
"‘possibility''
and
is
in
unrestricted
legislative
control
of
the
lands.
In
addition
to
the
Natural
Resources
Agreement
I
think
the
cases
of
Kennedy
v.
Toronto
(supra)
;
A.-G.
Can.
v.
A.-G.
Ont.,
[1897]
A.C.
199,
and
St.
Catharines
Mllg.
c
Lbr.
Co.
v.
The
Queen
(1888),
14
App.
Cas.
46,
support
this
view.
It
seems
to
be
rather
aimless
to
go
into
the
question
whether
the
contingent
right
in
ease
of
dissolution
of
the
University
belongs
to
the
Dominion
or
provincial
Crown
or
whether
if
the
former
it
will
be
jeopardized
by
provincial
taxation.
Wherever
it
lies
I
would
answer
that
it
is
merely
a
collateral
covenant.
It
is
such
a
problematic
possibility
that
it
leaves
the
value
of
the
land
for
practical
assessment
purposes
without
any
measurable
diminution.
I
have
already
alluded
to
the
clear
beneficial
interest
of
the
University
and
I
think
it
is
taxable.
I
think
this
is
quite
consistent
with
the
language
of
Chief
Justice
Duff
in
Spooner
Oils
Ltd.
v.
Turner
Valley
Gas
Conservation
Board,
[1933]
4
D.L.R.
545
at
pp.
558-9.
In
case
by
reason
of
any
dire
happening
there
might
be
suspension
of
University
operations
relief
from
forfeiture
could
be
expected.
Crabbe’s
Law
of
Real
Property,
p.
2154.
There
is
no
language
in
the
Act
or
patent
that
suggests
that
the
Dominion
meant
the
lands
to
be
free
from
provincial
taxation
until
sold
as
in
the
ease
of
the
C.P.R.
land
grant.
In
any
case
these
lands
were
not
in
the
North-West
Territories
and
the
Dominion
could
not,
once
the
lands
were
granted
or
an
equitable
interest
created,
interfere
with
provincial
taxation
of
the
estate
or
interest
so
granted
or
created.
The
other
argument
advanced
on
behalf
of
the
University
is
that
it
is
an
emanation
from
the
Crown
or
an
arm
of
government.
I
think
a
perusal
of
the
University
Act
(1936
(Man.),
c.
47),
repels
this
argument.
In
one
sense
I
suppose
it
is
true
that
every
corporation
is
an
emanation
from
the
Crown
but
that
is
a
different
thing
from
being
an
arm
of
the
Executive
government.
It
may
be
quite
true
that
the
Crown
exercises
a
prerogative
of
naming
a
majority
of
the
board
of
governors;
that
it
appoints
the
Chancellor
after
nomination
by
the
committee
on
nominations;
that
it
annually
makes
large
financial
augmentations
and
that
the
main
buildings
are
on
Crown
property
;
but
nevertheless
neither
the
appointment
of
authorities
nor
the
grants
of
funds
in
aid
of
education
are
necessarily
inconsistent
with
the
independence
of
the
University
as
an
institution
of
higher
learning.
It
is
not
to
be
imputed
to
the
Crown
that
any
of
its
acts
or
subsidies
would
be
actuated
by
any
motive
of
direction,
let
alone
control,
of
the
University’s
free
scope
in
its
normal
sphere
of
action.
I
think
the
words
of
Hon.
R.
M.
Meredith
in
Scott
v.
Toronto
University
(1913),
10
D.L.R.
154,
are
applicable
here.
That
was
a
case
wherein
the
Board
set
up
immunity
from
liability
for
injury
to
an
employee.
The
Board
of
Governors
there
were
themselves
a
corporation
but
the
point
is
the
same.
The
learned
Chief
Justice
said
(p.
156)
:
"Nor
do
the
other
powers,
respecting
the
university,
which
the
Lieutenant-Governor
in
council
has,
under
the
enactments
mentioned,
bring
to
the
Governors
the
character
of
Crown
officers
governing
Crown
property
for
the
use
or
benefit
of
the
Crown.
They
are
but
officers
of
the
University,
having
power
to
deal
with
the
property
under
their
control
for
the
uses
and
benefit
of
the
University
only.”
There
are
various
other
cases
in
which
the
difference
in
effect
between
independent
management
and
mere
executive
agency
is
shown.
For
instance
Gilbert
v.
Trinity
House
(1886),
17
Q.B.D.
795;
Mackenzie-Kennedy
v.
Air
Council,
[1927]
2
K.B.
517;
Halifax
v.
Halifax
Harbor
Com’rs,
[1935],
1
D.L.R.
657,
S.C.R.
215.
I
would
answer
the
questions
as
follows
:
"
(1)
Is
the
University
of
Manitoba
an
emanation
or
arm
or
branch
of
the
Government
of
Manitoba
so
that
any
property
standing
in
its
name
is
therefore
exempt
from
taxation
?
A.
No.
44
(2)
Was
s.
3
of
the
said
Statutes
of
Manitoba,
being
c.
93
of
1935,
as
amended
by
s.
2
of
c.
92
of
the
Statutes
of
Manitoba,
1936,
within
the
legislative
competence
of
Manitoba
to
enact?
A.
Yes.
«(3)
Was
s.
1
of
the
Statutes
of
Manitoba,
1937-38,
c.
45,
within
the
legislative
competence
of
the
Province
to
enact?
A.
Yes.
"‘(4)
Has
the
Province
of
Manitoba
any
legislative
competence
to
authorize
the
imposition
of
taxation
upon
"‘(a)
any
part
of
the
150,000
acres
of
land
conveyed
to
the
University
by
the
Dominion
as
an
endowment,
and
still
remaining
in
the
name
of
the
University
unsold?
A.
Yes.
"(b)
any
part
of
the
proceeds
of
the
sale
or
other
disposition
of
any
part
of
the
said
endowment
grant?
A.
Yes.
"‘(c)
any
part
of
the
investments
of
the
proceeds
or
income
from
any
part
of
the
endowment?
A.
Yes.
"‘(d)
any
property
which
may
be
said
to
result
from
or
arise
out
of
the
management
or
disposition
of
the
said
endowment?
A.
Yes.
"
(e)
the
estate
or
interest
of
the
University
therein?
A.
Yes.’’
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