Rolland and Trust Company of Canada v. His Majesty the King, [1950] CTC 197

The late Arthur Décary died in the City of Montreal on January 22nd, 1946, leaving a last Will dated November 9, 1944, executed before Morin, Notary (Exhibit P-1), by which he bequeathed all his property in trust to three trustees and executors, namely, the two petitioners and his widow Dame Laura Sénécal, who died on January 8, 1945, and was never replaced.

Some years prior to his death, Arthur Décary made two donations in trust, dated, respectively, November 29, 1932, and August 10, 1936, both executed before Morin, Notary, and duly registered in the Registry Office for the Registration Division of Montreal, on December 1, 1932, and August 12, 1936, respectively.

The collector of succession duties ruled that these two donations were both dispositions of property assimilated to a transmission owing to death under division 6 of the Quebec Succession Duties Act and that therefore succession duties were exigible in respect of the transmission, by reason of the death of the late Arthur Décary, of the property which was the subject, of the two donations. The duties assessed were paid under protest on September 25, 1947, and the petitioners in their quality as testamentary executors and trustees of the late Arthur Décary, by petition of right, now claim from respondent repayment of $33,529.64.

The respondent in its defence claims that the succession duties were properly assessed in respect of the two donations.

It appears from the pleadings and particularly from the written admissions filed in the case that by the deed of donation of November 29, 1932 (referred to hereinafter for brevity as the first donation), Arthur Décary gave in trust to Trust Général du Canada as Trustee, thereunto accepting 600 shares of the par value of $100 each of the capital stock of Rougier Frères Compagnie Incorporée, under charge to collect the revenues therefrom and after paying expenses to pay the net revenues, as follows :

1 (a) : Du vivant du donateur: le revenu net de ces actions aux deux filles du donateur, madame Gabrielle Décary, épouse de M. Francois-Alexandre Rolland, et madame Renée Décary, épouse de M. Andréa Gasparinetti, et ce, jusqu’au décès du donateur.

(b) : Après le décès du donateur: une moitié du revenu net de ces actions à madame Laura Sénécal, épouse du donateur, aussi longtemps qu’elle vivra, et l’autre moitié aux- dites Gabrielle et Renée Décary, les deux filles susnommées du donateur, par égales parts entre elles, leur vie durant.

(c) : Après le décès de l’épouse du donateur: la totalité du revenu disponible des biens qui font l’objet de la présente donation auxdites Gabrielle et Renée Décary, par égales parts entre elles, et leur vie durant.

(d) : Au décès de l’une desdites Gabrielle et Renée Décary, ci-après appelées «donataires bénéficiares», la part de revenu qui lui sera payable en vertu des dispositions ci-dessus sera distribuée par égales parts entre ses enfants, et à défaut d’enfant, elle sera versée à la survivante des deux donataires bénéficiares, et si la survivante est alors décédée laissant des enfants, elle sera distribuée à ces derniers, jusqu’à l’époque ci-après fixée pour la remise du capital des biens qui font l’objet de la présente donation à ceux qui doivent le recevoir en dernier lieu.

2: Après le décès de l’épouse du donateur et de ses deux filles, Gabrielle et Renée, le fiduciaire est chargé de remettre le capital des biens qui font l’objet de la présente donation aux petits-enfants du donateur, enfants desdites Gabrielle et Renée, par égales parts entre eux et par têtes, à la condition cependant que ces enfants aient alors atteint l’âge de trente ans; le fiduciaire devant continuer de garder et gérer les parts non versées de ces biens, jusqu’à ce que ces enfants atteignent respectivement l’âge de trente ans, tout en leur en versant les revenus à compter du décès de leurs mères respectives.

Si l’une desdites filles du donateur décède sans laisser de postérité, le capital de sa part accroîtra aux enfants de l’autre par égales parts entre eux.

Si l’un des enfants desdites Gabrielle et Renée Décary était décédé laissant des enfants, ces derniers, arrière-petits-enfants du donateur, recueilleront la part de leur parents décédés par représentation et par souches.

Après le décès desdites Gabrielle et Renée Décary et de madame Laura Sénécal, leur mère, le fiduciaire remettra à chacun de leurs enfants alors vivants leur part respective des biens qui font l’objet de la présente donation au fur et à mesure qu’ils atteindront l’âge de trente ans, et si l’un d’eux était alors décédé laissant des enfants, le fiduciaire remettra sa part à ses descendants par souches.

Si lesdites Gabrielle et Renée Décary, ainsi que leurs enfants, décédaient sans postérité avant le donateur le capital des biens faisant l’objet de la présente donation reviendra alors par droit de retour au donateur, et le fiduciaire est par les présentes chargé de lui remettre ces biens dans cette éventualité.

Si, après le décès du donateur, lesdites Gabrielle et Renée Décary et leurs enfants décédaient tous sans postérité avant que ces derniers aient atteint l’âge requis pour recevoir et toucher le capital des biens qui font l’objet de la présente donation, le fiduciaire est alors chargé de remettre ces biens aux héritiers légitimes du donateur, ou, s’il laisse un testament, suivant les dispositions de ce testament.

The other provisions of the first donation are not relevant to the decision of this case.

The certificates for the shares, the subject of the first donation, were delivered to the trustee on November 29, 1932, and the shares were on that date registered in the name of the trustee on the books of Rougier Frères which issued a new certificate in the name of the trustee. At all times, since November 29, 1932, Trust Général du Canada has remained the registered owner of the shares and all the net revenues from the shares have been paid to the beneficiaries.

By the deed of donation of August 10, 1936, (hereinafter referred to as the second donation) Arthur Décary gave in trust to Trust Général du Canada as trustee thereunto accepting 2500 shares without nominal or par value of the capital stock of The Shawinigan Water and Power Company and 400 shares of the par value of $100 each of the capital stock of La Banque Canadienne Nationale under charge to collect the revenues therefrom and to pay the net revenues in exactly the same manner and subject to exactly the same conditions as set forth in the first donation quoted above.

The certificates for the shares, the subject of the second donation, were delivered to the trustee on August 10, 1936, the shares were on that date registered in the name of the trustee on the transfer books of the two companies concerned and new certificates representing the said shares were issued in the name of the trustee. At all times, since August 10, 1936, Trust Général du Canada has remained the registered owner of said shares and all the net revenues from the shares have been paid to the beneficiaries.

In the second donation the donor forbade the trustee to sell the shares, the subject of the second donation, without his prior approval and, after his death, without the consent of the beneficiaries in revenue of full age. The relevant portion of the second donation reads as follows :

Toutefois, quand il s’agira de vendre des titres ou valeurs dépendant de la présente fiducie, le fiduciaire avant d’agir, devra avoir préalablement obtenu l’approbation du donateur, aussi longtemps qu’il vivra et, après son décès, l’approbation des bénéficiaires en revenu, autant qu’ils seront majeurs et capables de contracter; le fiduciaire pouvant agir seul si, en aucun temps, aucun des bénéficiaires n’était majeur et capable de contracter.

The donor, in order to assimilate the second donation to the first donation, also purported in the second donation with the consent of the trustee to amend the first donation to give the trustee power to sell the Rougier Frères shares and to reinvest the proceeds in certain designated types of securities, but only with the prior approval of the donor, and after his death, of the beneficiaries in revenue of full age. The relevant portion of the second donation reads as follows:

DONATION ANTERIEURE

Attendu que par acte de donation passé devant Victor Morin, notaire soussigné, le vingt-neuf novembre mil neuf cent trente-deux, enregistré au bureau d’enregistrement de Montréal le premier décembre suivant, sous le No 321.935, ledit Arthur Décary a fait une autre donation de six cents actions d’une valeur nominale de cent dollars chacune de Rougier Fréres Compagnie Incorporée au Trust Général du Canada, en fidéicommis, pour les mêmes bénéficiaires et dans le même esprit que la présente donation, et qu’il désire donner à ladite donation les mêmes effets que ceux de la présente donation ;

Mais attendu que, dans la donation précitée du vingt-neuf novembre mil neuf cent trente-deux, il a oublié de pourvoir à la vente éventuelle des actions Rougier Frères Compagnie Incorporée ansi données par l’acte précité.

Les parties aux présentes ont convenu de se qui suit pour assimiler à la présente donation celle du 29 novembre 1932, savoir :

Ledit Arthur Décary, donateur des biens décrits dans la donation précitée et dans la présente, donne audit fiduciaire, donataire en fidéicommis des biens mentionnés à ces deux actes, le pouvoir de vendre lesdites actions de Rougier Frères Compagnie Incorporée, soit en partie, soit en totalité, tout comme il a le pouvoir de vendre, aux termes du présent acte, les valeurs données par cet acte, si, en aucun temps, le fiduciaire jugeait opportun de faire telle vente dans l’intérêt des bénéficiaires de ladite donation.

A cette fin ledit donateur confère et attribue à ladite partie de seconde part le droit et le poivoir de vendre et aliéner, de gré à gré, sans formalités de justice et sans l’autorisation ni la participation des bénéficiaires, les actions de Rougier Frères Compagnie Incorporée qui ont fait l’objet de la donation précitée, soit en totalité, soit en partie seulement, de recevoir le produit de ces ventes et d’en donner bonnes et valables quittances.

Il attribue de plus à ladite partie de seconde part le pouvoir de placer et de remplacer les fonds ainsi encaissés en bons ou obligations du gouvernement du Canada, du gouvernement de la province de Québec, ou de corporations municipales ou scolaires de cités et villes de la province de Québec ayant une population d’au moins dix mille âmes, et de revendre les valeurs ainsi acquises ou de modifier la composition du portefeuille des placements, valeurs ou titres dépendant de ladite fiducie, dans les limits ci-dessus déterminées.

Toutefois, quand il s’agira de vendre ces actions ou les bons ou obligations acquis en remploi, le fiduciaire devra, avant d’agir, avoir préalablement obtenu l’approbation du donateur, aussi longtemps qu’il vivra, et après son décès, l’approbation des bénéficiaires en revenus aux termes des actes précités, mais de ceux seulement qui seront alors majeurs et capables de contracter.

Les valeurs ainsi acquises en remploi tiendront lieu, à toutes fins, des actions de Rougier Frères Compagnie Incorporée qui auront pu être aliénées, et le fiduciaire disposera des revenus de ces valeurs encaissées en remploi et du capital d’icelles, conformément aux dispositions de ladite donation.

Les présentes modifications sont ainsi faites par le donateur et acceptées par le donataire en fidéicommis pour faire partie de l’acte précité du vingt-neuf novembre mil neuf cent trente-deux, tout comme si elles étaient insérées audit acte, le donateur voulant que les libéralités par lui faites aux terms des ces deux actes soient soumis à des conditions identiques.

None of the beneficiaries ever became a party to either donation although the donor’s two daughters, at some undesignated time after the execution of the donations, learned of both donations and of their terms. Both of the donor’s daughters survived him.

The Court will now consider, seriatim, the arguments advanced by Counsel for respondent to sustain the disputed assessment.

It was first argued that the mere fact of the appointment of a trustee by the donor raised a presumption of control or administration by the donor which makes the donation subject to duty under art. 24 of the Quebec Succession Duties Act, which reads in part:

24, 1. For the purposes of this Act, the ownership, usufruct or enjoyment of any property shall be deemed to be transmitted owing to death whenever the gratuitous disposition has taken effect more than five years before the death of the person who has made it and whenever such person has reserved to himself, in whole or in part, the control, administration, ownership or enjoyment of such property or part thereof, until his death or until the period comprised in the five years previous to his death.

2. This section shall apply also whenever the person making the disposition has reserved to himself, in whole or in part, the control, administration, ownership or enjoyment of such property or part thereof, until his death or until a period comprised in the five years previous to his death, in each of the following cases : . ..

c) Whenever the control or administration is exercised through a fiduciary or an interposed person;

The Court was referred to no authority for this proposition and is unable to accept it. Art. 24. 2 of the Quebec Succession Duties Act subjects a gift to tax only if the donor has reserved to himself control, administration, ownership or enjoyment until death or until a time less than five years before death, whether the donor exercise such control or, etc., himself, or through a trustee. The basic requirement, however, is that the donor has reserved to himself control and there is no presumption of such reservation of control arising from the appointment by the donor of a trustee. Indeed, a trustee of a gift in trust holds for the benefit not of the donor but of the beneficiaries. Moreover, if respondent’s contention be correct, it would appear to have been unnecessary by the Act (1949), 13 Geo. 6, ch. 32, sec. 7 to amend the Quebec Succession Duties Act to add the new art. 27a, reading :

27(a) : For the purpose of this act, the ownership, usufruct or enjoyment of any property shall be deemed to be transmitted owing to death, whenever the deceased has disposed of same by gratuitous title, in any manner whatsoever, by a disposition which has taken effect more than five years prior to the date of death, unless the ownership, possession, usufruct, enjoyment, administration of and the revenue from or the income of the said property has actually been assumed and thenceforward retained by the real beneficiary, to the exclusion of the donor or of any other person.

However, dispositions inter vivos by gratuitous title executed prior to the 22nd of February, 1949, shall be governed by the law in force prior to the enactment of this act.

Article 27 a does not apply to the determination of this case.

Secondly, it was contended that as only the revenues were paid to the beneficiaries during the lifetime of the donor, with the capital being retained by the trustee until long after the death of the donor, both donations were taxable because they did not take effect until after the death of the donor within the meaning of art. 22 of the Act. The second paragraph of art. 22 is as follows:

When property, disposed of by gratuitous title consists in a sum of money, the disposition thereof is, for the purpose of this act, deemed to take effect only on the date on which the said sum is really paid.

In the opinion of the undersigned, both donations took effect upon the acceptance by the trustee on November 29, 1932, and August 10, 1936, respectively, more than five years before the death of the donor and, accordingly, neither donation attracts succession duties under art. 22 of the Act.

Thirdly, it was argued that the clause in the second donation stipulating that the trustee should not, without the approval of the donor, sell the securities the subject of the gift, was a reservation by the donor to himself of control or, etc., within the meaning of art. 24 of the Act. It was further contended that the second donation had amended and incorporated in the first donation a similar clause and that said amendment of the first donation by the second donation had been accepted tacitly by the beneficiaries by reason of their acceptance of the revenues from the second donation.

A gift in trust is completed by the acceptance of the trustee and is then irrevocable unless a right of revocation has been stipulated. Rinfret J. (as he then was) makes this point clear in his judgment in Curran v. Davis, [1933] S.C.R. 283, 307, where he says:

Dans le contrat de fiducie, l’autre partie contractante est • le fiduciaire ou le trustee. Dés que ce dernier accepte, le transport est effectué, complet et définitif. Le créateur du trust est dessaisi de la chose qui en a fait l’objet. Cette chose ne fait plus partie de son patrimoine. Elle est dès lors subordonnée à l’affectation qu’il en a faite. Il ne peut plus la reprendre. Il ne peut avoir le droit de révocation qui suivant les termes et les conditions qu’il a fixés.

See also Mignault, Droit civil canadien, vol. 5, p. 158.

Nor can a gift in trust, once accepted by the trustee, be amended by the donor and the trustee without the intervention of the beneficiaries. It is unnecessary to consider the question whether a deed of amendment in appropriate form and terms executed by the donor, the trustee and all the beneficiaries would be effective because no such deed was executed. Certainly the tacit consent of the beneficiaries to a deed of amendment executed by the donor and the trustee (even if proved), would not suffice. Accordingly, in the present case the first donation was not amended by the second donation and hence the respondent ’s third argument must fail in respect of the first donation.

It remains to be decided whether the clause in the second donation requiring the trustee to obtain the donor’s consent before selling the securities, the subject of the donation, constitutes a reservation by the donor to himself in whole or in part of "‘the control, administration, ownership or enjoyment of such property’’ within the meaning of art 24 of the Act. It is not seen how it could be said that the donor, by the clause under consideration, reserved to himself either ownership or enjoyment. Neither has he, by the clause in question, reserved to himself administration for the administration is entirely in the hands of the trustee. Has he observed to himself "‘control''?

Counsel for petitioners argued that the right of the donor to refuse the trustee permission to sell securities did not give the donor control in whole or in part of the trust property within the meaning of art. 24; that the word ""control” should be interpreted as meaning f " possession ” ; that the donor could validly have forbidden the trustee to sell without falling foul of art. 24 ; that the clause in question, far from giving any degree of control to the donor, merely limited the trustee’s power of sale ; that the word " " control ’ ’ implies that the donor must reserve the right to deal with the property for his own advantage or benefit; and that, finally, the control of the donor must be upon the property and not as in the present case upon the trustee.

After consideration, the Court has concluded that the clause in question has not reserved to the donor any i( control” within the meaning of art. 24 of the Succession Duties Act. This conclusion is borne out by the judgment of Mr. Justice Kerwin in Minister of National Revenue v. National Trust Co., [1948] C.T.C. 339, 352. In that case, C. R. Wood made to two trustees a gift of trust in favour of his daughter under charge to pay to the daughter the annual income during his lifetime and on his death to transfer to her, absolutely, the trust property and any accumulated income. The trustee’s power of sale of the donated securities was limited, as follows (p. 348) :

2. The Trustees shall have power to hold the securities set forth in Schedule "A'' hereto or any securities substituted therefor or hereinafter provided, notwithstanding that the said securities may not be securities in which trustees are authorized by law to invest trust funds, and shall from time to time upon the direction in writing of the settlor during his lifetime sell, call in and convert into money the said securities or any part thereof, and invest the moneys thereby produced in such securities or investments as the settlor may from time to time direct and notwithstanding that the said securities or investments may not be securities or investments in which trustees are authorized by law to invest trust funds, and shall have power upon the direction in writing of the settlor during his lifetime to accept from the settlor in substitution in part or in toto of the said securities set forth in Schedule ‘‘A”’ hereto other securities in respect of which the settlor shall certify in writing that the securities so substituted are of a value at least equal to the value of the securities for which the same are substituted, and the securities so substituted together with the securities to be retained by the trustees and constituting the Trust Fund shall yield at the date of such substitution a net income of at least $24,000 per annum after allowing from the gross income from such securities for the payment of all taxes payable by the beneficiary in respect of the income from such securities which may be assessed or levied by the Dominion of Canada or Province of Ontario, or any other taxing authority.

The trustees shall be entitled to accept the hereinbefore referred to certificate of the settlor as the conclusive evidence of truth of any statement of facts therein contained, and the trustees shall be completely protected in relying and acting upon any such certificate.

The trustees shall incur no responsibility whatsoever to the beneficiary and the beneficiary shall have no claim what- soever against the trustees by reason of the trustees retaining the securities set forth in Schedule "‘A’ hereto in their present state of investment or selling the same or any part thereof and investing the proceeds therefrom in securities or investments which may not be securities or investments in which trustees are authorized by law to invest trust funds, or accepting by way of substitution in the manner hereinbefore provided other securities for any or all of the said securities set forth in Schedule "‘A’’ hereto .. .

4. The trustees shall have power to appoint the settlor or any person named by him as their attorney in their names, places and stead to vote at all meetings and otherwise to act as their proxy or representative in respect of all shares, bonds and other securities which may at any time be held by the trustees under the terms thereof, with all the powers the trustees could exercise if personally present.

5. The settlor may from time to time and at any time reduce or increase the number of trustees or substitute any one or more trustees for either or both of the trustees and may appoint a new trustee or trustees in the event of the death, absence, refusal or incapacity to act of any trustee or in case any trustee desires to be released or is discharged by the settlor from the trusts thereof.

By a document dated February Ist, 1937, clause 2 of the original settlement was amended so as to provide that the power of the trustees to accept from the settlor in substitution in part or in toto of the securities should be exercised upon the direction in writing of the settlor, and the National Trust Company, Limited, or any chartered bank in the Dominion of Canada instead or upon the direction of the settlor alone. The necessary change was also made in the second paragraph of that clause. Clause 4 was stricken out and clause 5 was amended by adding a proviso at the end by which the settlor should not be appointed a trustee.

Section 7. 1. g of the Dominion of Canada Succession Duty Act reads:

7. 1. From the dutiable value of any property included in a succession, the following exemptions shall be deducted and no duty shall be taxable in respect thereof: . ..

(g) in respect of any gift made by the deceased, prior to the twenty-ninth day of April, One Thousand Nine Hundred and Forty-one, when actual and bona fide possession and enjoyment of the property, the subject-matter of the gift, has been assumed by the donee or by a trustee for the donee immediately upon the making of the gift and thenceforward retained to the entire exclusion of the donor, or of any benefit to him, whether voluntary or by contract or otherwise . . .

Mr. Justice Kerwin, with whom Chief Justice Rinfret concurred, held that, notwithstanding the right given to Wood to direct the sale of securities and the reinvestment of the proceeds of the disposition was exempt from Dominion succession duties under art. 7. 1. g, saying, at page 352 :

Finally . . . it is contended that there was no entire exclusion of Mr. Wood or of any benefit to him because of the power of substitution of securities in the trust fund. The evidence discloses that what was actually done in this respect certainly did not insure Mr. Wood’s benefit and in any event it cannot be said that the mere power, hedged about as it was, in itself takes the matter outside the provisions of clause (g) of subsection (1) of section 7.

Fourthly, it was argued that a deed of option (Exhibit D-1) covering the shares of Rougier Frères, which were the subject of the first donation, executed by the donor in favour of J. I. Brodeur and Jean Lanctôt on August 10, 1943, before Victor Morin, Notary, and containing the intervention of Trust Général du Canada, the trustee under the first donation made that donation subject to succession duties under sub-paragraphs d and e of par. 2 of art. 24 of the Act.

The answer to respondent’s fourth argument is that the first donation was completed by the gift in trust by the donor and the acceptance by the trustee, and became irrevocable and not susceptible of amendment without the express consent of the beneficiaries. The beneficiaries were not a party to the deed of option. The donor had divested himself of the shares and could therefore not grant any option in respect of them. There is no proof that the deed of option was known to the beneficiaries or that they ever accepted it even tacitly. Accordingly, it cannot be said that the beneficiaries, by reason of the option, "left the enjoyment, administration or control’’ of the shares to the donor within the meaning of sub-paragraph e of par. 2 of art. 24.

Finally, it was contended that the droit de retour in favour of the donor in both donations rendered them liable to duty under art. 24. It was provided in both donations that :

Si lesdites Gabrielle et Renée Décary, ainsi que leurs enfants, décédaient sans postérité avant le donateur, le capital des biens faisant l’objet de la présente donation reviendra alors par droit de retour au donateur, et le fiduciaire est par les présentes chargé de lui remettre ces biens dans cette éventualité. Si, après le décès du donateur, lesdites Gabrielle et Renée Décary et leurs enfants décédaient tous sans postérité avant que ces derniers aient atteint l’âge requis pour recevoir et toucher le capital, . . . le fiduciaire est alors charge de remettre ces biens aux héritiers légitimes du donateur, ou s’il laisse un testament, suivant les dispositions de ce testament.

A similar point arose for decision in Minster of National Revenue v. National Trust Company, [1948] C.T.C. 339, where the Supreme Court of Canada unanimously dismissed an appeal from a judgment of O’Connor, J., of the Exchequer Court, [1947] C.T.C. 201. In that case one E. R. Wood (who died on June 16, 1941) on December 8, 1930, gave in trust to two trustees certain securities under charge to pay the annual income therefrom to his daughter during his lifetime and upon his death to transfer the securities absolutely to the daughter subject to the following proviso:

That in the event of the beneficiary dying in the lifetime of the settlor, the trustees shall transfer such securities then representing the trust fund and the accumulated income therefrom to the settlor for his own absolute use and benefit.

Dominion of Canada succession duties were assessed in respect of the trust property and the assessment was appealed to the Exchequer Court under part 6 of the Dominion Succession Duty Act. The Supreme Court unanimously dismissed the appeal and held that the gift in question was exempt from duty under art. 7. 1. g of the Dominion Act quoted above.

It seems clear to the undersigned that if the present case were to be decided under the Dominion Succession Duty Act both donations would, on the authority of the National Trust case, be exempt from Dominion succession duty under art. 7. 1. g, above quoted.

There remains for consideration the question whether in art. 24 of the Quebee Act the tax net is more broadly drawn than in art. 7. 1. g of the Dominion Act. To put the matter in another way: can a gift in trust where actual and bona fide possession and enjoyment has been assumed by a trustee for the donee from the time of the gift and retained to the entire exclusion of the donor or of any benefit to him at the same time be a gift in which the donor has reserved to himself personally or through a trustee the control, administration, ownership or enjoyment of the trust property? After careful consideration the Court has concluded that the answer to this question is in the negative.

It is suggested in Dominion of Canada Succession Duty Service, vol. 2, p. 8260, that art. 27a was added to the Quebec Succession Duties Act in 1949 in order to make duty payable in circumstances such as those dealt with in the case of Minister of National Revenue v. National Trust Company.

It is the opinion of the undersigned that the clauses containing the so-called droit de retour subjected the gifts to a resolutive condition until the fulfillment of which the donor had no rights; that the condition was, in fact, never fulfilled; and that these conditional rights died with the donor and consequently no rights in or to the property the subject of the two donations ever formed part of the estate of the donor.

Furthermore, the donor had no control over the happening of the resolutive condition (that is, the predecease of both of his daughters leaving neither children nor grandchildren) upon the fulfillment of which the trust property was to revert to him or to his heirs. The chance of the condition being fulfilled was extremely slight and the donor had no control over its fulfillment. In fact, the testator predeceased both his daughters. It is to be noted that art. 24 requires that the donor should reserve "‘to himself . . . control, administration, ownership or enjoyment.”’ It is the opinion of the Court that for a reservation to attract taxation under this section the reservation must be immediate or subject to the happening of a future event over which the donor has, to some degree, control.

The case of Bourque v. Le Roi, [1947] S.C. 348, referred to by Counsel for respondent can be distinguished from the present case, for in that case the donor not only reserved to himself enjoyment of the revenues from the trust property under certain circumstances, but, in fact, enjoyed the revenues for almost three years.

Accordingly the two donations are not subject to duty under art. 24, or any other article or articles, of the Quebec Succession Duties Act and petitioners are entitled to judgment for the amount claimed, $33,529.64.

There remains the petitioners’ claim for interest. Ross v. The King, (1903), 32 S.C.R. 532, held that the Crown is not liable under art. 1047 and 1049 C.C. to pay interest upon the amount of duties illegally exacted under a mistaken construction placed by custom officers upon the Customs Tariff Act. It is settled jurisprudence that interest may not be allowed against the Crown unless there is a statute or a contract specifically so providing. Johnson v. The King [1904] A.C. 817; Carrol v. The King [1947] Ex. C.R. 410, 436, affd. by [1948] S.C.R. 126; Hochelaga Shipping and Towing Company v. The King [1944] S.C.R. 138.

Accordingly, interest can be allowed only from the date of judgment herein.

Considering that the property, the subject of the first donation (Exhibit R-5), and the property, the subject of the second donation (Exhibit R-6) are not and never were taxable under the Quebec Succession Duties Act by reason of the death of the late Arthur Décary ;

Considering that petitioners have established the essential allegations of their petition of right to the extent of $33,529.64 ;

Considering that respondent has failed to substantiate its defence.

Doth maintain the petition of right and adjudge that the respondent shall pay petitioners ès qualité the sum of $33,529.64, with interest from this date, and costs.