CAMERON.
J.:—This
appeal
is
from
an
assessment
made
by
the
respondent
under
the
provisions
of
the
Dominion
Succession
Duty
Act,
1941,
as
amended.
The
appellants
are
respectively
the
nephew
and
niece
of
the
late
Mary
Catherine
Fisher
who
died
at
Vancouver
on
October
23,
1943,
and
probate
of
whose
last
will
and
testament
and
a
codicil
thereto
was
duly
granted
to
Cora
Lillie
Smith,
the
executrix
therein
named,
who
is
also
the
mother
of
the
appellants.
The
appeal
is
taken
in
regard
to
one
matter
only,
namely,
the
valuation
placed
by
the
respondent
on
the
interest
of
the
deceased
in
one-third
of
the
income
arising
from
the
Vancouver
real
estate
of
Charles
Woodward,
deceased,
father
of
the
said
Mary
Catherine
Fisher.
Charles
Woodward,
a
merchant
of
Vancouver,
under
date
of
December
21,
1922,
leased
to
Woodward’s
Limited,
Lot
16
in
Block
4,
Old
Granville
Townsite,
being
the
northwest
corner
of
Hastings
and
Abbott
Streets
in
the
city
of
Vancouver,
on
which
is
situated
a
five-storey
building
forming
a
portion
of
a
very
large
departmental
store
(known
as
Woodward’s
Stores)
for
the
term
of
sixty-five
years,
at
an
annual
rental
of
$30,000,
plus
taxes.
In
order
to
further
secure
the
payment
of
the
said
rentals,
he
obtained
from
Woodward’s
Limited
a
mortgage
dated
April
17,
1924,
in
his
favour,
covering
an
adjoining
Lot
15
and
the
easterly
20
feet
of
Lot
14
(on
which
the
main
part
of
the
departmental
store
is
constructed)
in
the
sum
of
$150,000.
Under
date
of
June
17,
1930,
he
obtained
a
further
mortgage
over
the
same
property
for
an
additional
sum
of
$150,000,
making
added
security
in
all
of
$300,000.
Charles
Woodward
died
on
June
2,
1937,
Exhibit
2
being
a
copy
of
his
last
will
and
testament
and
a
second
codicil
thereto
duly
admitted
to
probate.
He
directed
his
trustees
to
hold
the
income
from
the
above-mentioned
Vancouver
real
estate
for
his
two
daughters
and
the
daughter
of
a
deceased
daughter,
in
equal
shares,
and
(except
for
special
directions
applicable
to
the
income
arising
therefrom
during
the
first
three
years
after
his
death)
provided
that
his
trustees
should
distribute
the
whole
of
such
income
annually
during
the
lifetime
of
the
last
survivor
of
five
persons,
namely,
his
two
daughters
(Mrs.
Smith
and
Mrs.
Fisher),
his
granddaughter
(Mrs.
MacLaren,
a
daughter
of
a
deceased
daughter)
and
the
appellants
herein,
in
equal
shares
between
his
two
daughters
and
the
said
Mrs.
MacLaren.
Provision
was
also
made
that
if
either
of
his
daughters
or
Mrs.
MacLaren
should
predecease
him
leaving
children,
the
children
of
such
deceased
person
should
take
the
share
of
the
mother
and
if
more
than
one
equally
between
them.
Mrs.
Fisher
survived
her
father
and
became
entitled
to
one-third
of
the
income
from
his
Vancouver
real
estate.
On
application
made,
it
has
been
held
by
Mr.:
Justice
Coady
that
the
gift
to
Mrs.
Fisher
of
the
share
of
the
income
from
the
Vancouver
real
estate
vested
in
her
on
the
death
of
her
father
and
did
not
become
divested
upon
her
death:
The
executrix
of
the
estate
of
Mrs.
Fisher
is
therefore
entitled
to
receive
Mrs.
Fisher’s
share
in
that
income
until
the
death.
of
the
last
of
the
present
four
survivors
of
the
group
named
in
the
will
of
Charles
Woodward.
ii
(:
110
The
appellants
under
the
will
of
the
said
Mary
Catherine
Fisher
are
each
entitled
to
the
income
for
life
from
one-half
the
residue
of
Mrs.
Fisher’s
estate,
of
which
residue
her
interest
in
the
Charles
Woodward
Estate
forms
a
part.
In
assessing
the
estate
of
the
late
Mrs.
Fisher
in
regard
to
this
asset,
the
respondent
proceeded
under
the
provisions
of
section
34
of
the
Dominion
Succession
Duty
Act
and
the
applicable
regulation
made
under
section
58(2)
(c)
of
the
Act,
all
of
which
are
as
follows:
^34.
The
value
of
every
annuity,
term
of
years,
life
estate,
income,
or
other
estate,
and
of
every
interest
in
expectancy
in
respect
of
the
succession
to
which
duty
is
payable
under
this
Act
shall
for
the
purposes
of
this
Act
be
determined
by
such
rule,
method
and
standard
of
mortality
and
of
value,
and
at
such
rate
of
interest
as
from
time
to
time
the
Minister
may
decide.”
1'58.
(2)
The
Minister
may
make
any
regulations
deemed
necessary
for
carrying
this
Act
into
effect,
and
in
particular
may
make
regulations
:
(c)
prescribing
what
rule,
method
and
standard
of
mortality
and
of
value,
and
what
rate
of
interest
shall
be
used
in
determining
the
value
of
annuities,
terms
of
years,
life
estates,
income,
and
interests
in
expectancy.
’
’
Regulation
19—as
amended,
and
as
published
in
the
Canada
Gazette,
November
8,
1941,
and
as
in
effect
at
the
death
of
Mrs.
Fisher
:
“19.
(1)
The
value
of
every
annuity,
term
of
years,
life
estate,
income
or
other
estate,
and
of
every
interest
in
expectancy,
shall
be
determined,
(i)
if
the
succession
does
not
depend
on
life
contingencies,
on
the
basis
of
compound
interest
at
the
rate
of
four
per
centum
per
annum
with
annual
rests,
and
(ii)
if
the
succession
depends
on
life
contingencies,
on
the
basis
of
interest
as
aforesaid,
together
with
the
standard
of
mortality
as
defined
in
Table
II
below,
and
Tables
I,
III
and
IV,
below,
which
are
derived
from
the
bases
aforesaid,
shall
be
used
so
far
as
they
may
be
applicable
in
the
valuation
of
any
succession.
(2)
The
amount
of
the
duty
payable
in
respect
of
any
succession
coming
within
the
terms
of
section
7(3)
(a)
(11)
shall
be
determined
in
accordance
with
Table
V
below.”’
As
indicated
in
paragraph
8
of
the
Statement
of
Defence,
the
respondent
determined
that
under
the
will
of
Charles
Woodward
the
estate
of
Mrs.
Fisher
was
entitled
to
receive
annually
the
sum
of
$10,000
until
the
death
of
the
last
survivor
of
Charles
MeCarroll
Smith,
Phyllis
G.
Rudd,
Mrs.
Cora
Lillie
Smith
and
Mrs.
Eleanor
Maclaren
who,
at
the
time
of
Mrs.
Fisher’s
death
were,
respectively,
30,
33,
57
and
36
years
of
age,
and
that
the
value
of
that
interest
on
the
date
of
Mrs.
Fisher’s
death,
in
accordance
with
the
Tables
referred
to
in
Regulation
19
and
at
a
rate
of
4%,
was
$213,667.
The
appellants
do
not
dispute
the
accuracy
of
the
computation
so
made
by
the
respondent
but
they
say
that
the
respondent
has
proceeded
on
entirely
wrong
principles.
They
allege
that
it
was
the
duty
of
the
respondent
to
assess
the
value
of
this
interest
at
its
fair
market
value
and
that
the
interest
here
in
question
does
not
come
within
the
provisions
of
section
34
(supra).
The
appellants
take
the
position
that
the
Fisher
Estate
is
entitled
to
receive
a
one-third
share
in
the
net
income
from
the
Vancouver
realty
and
not
an
income
or
annuity
of
$10,000
per
year.
They
submit
that
the
proper
valuation
to
be
placed
on
that
asset
is
what
it
would
realize
at
a
sale
;
that
by
paragraph
4
of
the
will
of
Mrs.
Fisher
this
asset
was
given
to
her
trustee
upon
trust
to
sell
the
same
(paragraph
8
of
the
will,
however,
gives
the
trustee
power
and
discretion
to
postpone
the
sale
of
any
part
of
her
estate
and
to
retain
the
same
as
an
investment
thereof
without
responsibility
for
any
loss
occasioned
thereby),
and
that,
therefore,
it
would
be
the
duty
of
her
trustee
to
sell
the
asset
within
a
reasonable
period
after
the
death
of
Mrs.
Fisher
;
and
that
an
intending
purchaser
(after
giving
consideration
to
all
the
factors
involved,
such
as
the
uncertainty
of
the
period
during
which
the
income
would
be
paid,
the
possibility
of
depreciation
in
value
of
the
leasehold
property,
the
possible
failure
of
the
lessee
thereof,
or
of
the
lease
being
surrendered
and
the
consequent
necessity
of
having
to
convert
the
realty
into
a
self-contained
store,
and
the
incidence
of
income
tax)
would
not
pay
more
than
$55,000
for
the
asset
as
a
whole,
and
that
that
sum—alleged
to
be
the
fair
market
value
of
the
assets—should
be
the
valuation
established
by
the
respondent.
The
respondent,
however,
considered
that
under
all
the
circumstances
of
the
case
the
asset
to
be
valued
was
not
an
interest
in
realty,
but,
in
fact,
a
bequest
of
the
sum
of
$10,000
annually,
terminable
only
upon
the
death
of
the
last
survivor
of
the
four-
named
persons.
I
am
of
the
opinion
that
his
conclusion
was
right.
An
examination
of
the
will
and
codicil
of
Charles
Woodward
indicates
that
apart
from
other
minor
bequests
which
are
not
here
of
importance,
he
desired
to
provide
a
fixed
income
of
that
amount
for
his
three
daughters
(later
substituting
a
granddaughter,
Mrs.
Maclaren,
for
her
mother
who
had
died
after
the
execution
of
the
will).
As
the
will
points
out,
earlier
provision
had
been
made
for
the
testator’s
sons
who
received
no
further
benefits
under
the
will
and
codicil.
His
daughters
and
their
children
were
therefore
his
main
concern.
At
the
time
he
executed
his
will
he
was
the
owner
of
valuable
realty
which
had
been
leased
for
a
term
of
sixty-five
years
at
an
annual
rental
of
$30,000,
and
taxes.
The
lessee
was
a
very
wealthy
corporation
whose
covenants
could
be
relied
on
as
an
adequate
guarantee
of
the
payment
of
the
rental
and
the
due
performance
of
the
other
covenants
contained
in
the
lease
throughout
its
full
term.
In
addition,
the
lease
required
the
lessee
to
ensure
the
property
in
the
name
of
the
lessor
in
the
sum
of
$100,000,
to
keep
the
building
in
repair
(except
for
ordinary
wear
and
tear
and
damage
by
fire,
lightning
and
tempest),
and,
at
the
end
of
the
term,
to
return
the
property
to
the
lessor
with
a
building
thereon
worth
not
less
than
$125,000,
in
a
state
of
good
repair.
There
was
no
provision
that
the
rent
would
cease
or
abate
in
the
event
of
damage
by
fire.
Steps
had
been
taken
to
collaterally
secure
the
payment
of
the
annual
rentals
by
the
two
mortgages
I
have
above
referred
to,
totalling
$300,000,
and
being
first
charges
on
property
worth
many
times
that
sum.
The
value
of
the
land
and
buildings
so
leased
was
approximately
$500,000.
While
during
his
lifetime
he
had
agreed
with
the
lessees
that
the
rental
during
his
lifetime
should
be
reduced
to
$15,000
per
annum
(the
reason
for
which
is
not
apparent),
he
was
careful
to
provide
that
upon
his
death
the
full
annual
rental
of
$30,000
would
be
paid
thereafter,
and
by
his
will
directed
his
trustees
to
hold
his
real
estate
in
trust
and
to
sell
it
only
upon
the
death
of
the
survivor
of
the
five-named
individuals—his
daughters
and
their
issue—and
that
in
the
meantime
the
whole
of
the
income
arising
therefrom
should
be
divided
equally
between
his
two
daughters
and
the
daughter
of
a
deceased
daughter.
At
the
time
of
Mrs.
Fisher’s
death
this
well-secured
lease
would
continue
to
run
for
approximately
forty-four
years,
and
upon
the
expiry
thereof
if
the
lessee’s
covenants
had
been
duly
carried
out,
and
even
if
the
same
lease
were
not
renewed,
the
property
would:
be
of
very
considerable
value
and
return
a
substantial
income.
Insofar
as
it
was
possible
for
him
to
do
so,
Mr.
Woodward
would
seem
to
have
taken
every
possible
precaution
to
provide
for
the
full
annual
payment
of
$10,000
to
his
daughter
Mrs.
Fisher
(and
to
her
executrix
following
her
death)
so
long
as
one
of
the
five-named
individuals
survived.
I
am
of
the
opinion,
therefore,
that
when
the
annual
income
was
so
fixed
and
determined
and
so
well
secured
by
the
lease
and
additional
securities,
that
it
should
be
considered
as
a
gift
of
that
sum
of
money,
payable
annually
and
terminable
only
upon
the
death
of
the
last
survivor
of
the
five-named
persons.
The
same
conclusion
was
reached
by
McFarlane,
J.,
in
considering
the
same
question
under
the
provisions
of
the
Succession
Duty
Act
of
the
Province
of
British
Columbia
(/n
re
Succession
Duty
Act
and
in
re
Fisher
Estate,
[1948]
2
W.W.R.
896).
It
is
submitted,
also,
by
the
appellants
that
the
asset
to
be
valid
is
not
one
of
those
referred
to
in
section
34
of
the
Act
(supra),
and
specifically
that
it
is
not
an
annuity.
In
my
opinion,
it
is
sufficient
to
say
that
that
which
the
Fisher
Estate
is
entitled
to
under
the
will
and
codicil
of
the
late
Charles
Woodward
is
the
right
to
receive
one-third
of
the
total
annual
income
from
the
Vancouver
realty
until
the
death
of
the
last
survivor
of
the
five-named
parties.
That
being
so,
that
right
may
be
properly
described
as
a
"‘life
estate’’,
or
‘‘an
income
or
other
estate’’,
and
so
come
within
the
ambit
of
section
34.
It
is
unnecessary,
therefore,
to
determine
whether
it
is,
in
fact,
an
annuity.
Pursuant
to
the
powers
contained
in
section
98
to
make
regulations
in
regard
to
such
valuations,
Regulation
19
(supra)
was
made
by
the
respondent
and
was
in
effect
at
the
time
of
Mrs.
Fisher’s
death.
The
valuation
made
by
the
respondent
under
the
Tables
referred
to
in
Regulation
19
was,
therefore,
made
with
statutory
authority
and
it
is
not
suggested
that
there
was
any
error
in
such
computation.
Counsel
for
the
appellants
also
pointed
out
that
by
establishing
a
valuation
of
$213,677
on
the
one-third
interest
in
the
income
arising
from
the
Vancouver
realty,
it
would
follow
that
the
total
value
of
such
income
would
substantially
exceed
the
highest
value
placed
by
any
of
the
witnesses
on
the
land
and
buildings
as
of
the
date
of
Mrs.
Fisher’s
death—namely,
about
$500,000.
That
is
so,
but
the
apparent
absurdity
disappears
completely
when
it
is
kept
in
mind
that
it
is
not
the
value
of
the
realty
which
is
the
subject
of
such
assessment,
but
the
income
therefrom
over
a
long
period
of
years
(estimated,
I
think,
at
a
total
of
forty-nine
years),
adequately
guaranteed
and
secured
by
the
collateral
mortgages
of
$300,000
and
the
value
of
the
covenant
of
the
lessee
to
pay
the
rent
and
of
the
other
special
terms
of
the
lease
to
which
I
have
referred.
For
the
reasons
which
I
have
stated,
the
assessment
is
affirmed
and
the
appeal
will
be
dismissed.
The
appellants
will
pay
the
costs
of
the
respondent
after
taxation.
Judgment
accordingly.
Appeal
dismissed.
Email this Content