Supreme Court of Canada

London (City) et al. v. St. Thomas (City) et al., [1958] S.C.R.249

Date: 1958-04-01

The Corporation of the City of London, the London Railway Commission and the London and Port Stanley Railway Company (Plaintiff) Appellants;

and

The Corporation of the City of St. Thomas (Defendant) Respondent.

The Corporation of the City of London, the London Railway Commission and the London and Port Stanley Railway Company (Plaintiff) Appellants;

and

The Corporation of the Township of Yarmouth (Defendant) Respondent.

The Corporation of the City of London, the London Railway Commission and the London and Port Stanley Railway Company (Plaintiff) Appellants;

and

The Corporation of the Village of Port Stanley (Defendant) Respondent.

Present: Kerwin C.J. and Rand, Locke, Cartwright and Fauteux JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Taxation—Municipal real property assessment—Effect of amendment of ss. 4(9) and 39 of The Assessment Act, R.S.O. 1950, c. 24, by 1952, c. 3, ss. 1(1), 10.

Under the relevant legislation the lands owned by The London and Port Stanley Railway Company were leased by it to the City of London and managed and controlled by the London Railway Commission.

Held: The effect of the 1952 amendments to ss. 4(9) and 39(1) of The Assessment Act was that these lands, although they were previously assessable and taxable as “land…leased by…a municipal corporation” became exempt from taxation on the coming into force of the 1952 amendments.

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Generally speaking, the interests of an owner and of a tenant are not valued separately under The Assessment Act for purposes of assessment or taxation, and it is only in special cases, such as those referred to in ss. 21 and 32, that the tenant is assessed or deemed to be the owner. The words “land” and “lands” as used in s. 39, as re-enacted, are not to be interpreted as including leasehold interests, notwithstanding the provisions of s. 1(g) of The Municipal Act and s. 33 of The Interpretation Act.

APPEALS from the judgments of the Court of Appeal for Ontario[1], in three appeals argued together. Appeals allowed.

W.B. Williston, Q.C., and J.D. Taylor, for the appellants.

J.J. Robinette, Q.C., and D.K. Laidlaw, for the respondents.

The judgment of the Court was delivered by

THE CHIEF JUSTICE:—These are appeals by the Corporation of the City of London, the London Railway Commission and the London and Port Stanley Railway Company from three orders of the Court of Appeal for Ontario[2], in one of which the Corporation of the City of St. Thomas is respondent, in another of which the Corporation of the Township of Yarmouth is respondent, and in the third of which the Corporation of the Village of Port Stanley is respondent. One point in connection with the City of St. Thomas will be mentioned and dealt with later, but, in the meantime, the appeals with respect to the three municipalities may be considered together.

The proceedings commenced with applications to the courts of revision of the several municipalities under s. 124 of The Assessment Act, R.S.O.1950, c. 24, the applicable part of which reads as follows:

124. (1) An application to the court of revision for the abatement or refund of taxes levied in the year in respect of which the application is made may be made by any person…

(f) in respect of land which has become exempt from taxation during the year…

In each case the London and Port Stanley Railway Company was registered as owner of the “land”.

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That company was incorporated by c. 133 of the 1853 statutes of Canada. The City of London, by its holding of shares and bonds with share-voting rights, owned in 1952, and now holds, a majority of the share-voting rights in the company. By c. 103 of the Ontario statutes of 1913 the City of London was empowered to enter into a lease with the railway company for a lease of the railway and to operate the same. By statute of Canada 1914, c. 96, a 99-year lease and agreement, dated November 28, 1913, from the company to the Corporation of the City of London was confirmed “and the whole management and control of the making, completion, equipment, operation, alteration and maintenance of the said The London and Port Stanley Railway for, and as the agents of, the Corporation” was entrusted to a body corporate known as The London Railway Commission. The lease set forth in a schedule to the Act was given “subject to all the rents, conditions, provisos and agreements” mentioned in it and by para. 6 of the said lease it was provided that:

The parties of the second part [The Corporation of the City of London] shall pay all taxes, rates, duties and assessments whatsoever, whether municipal, parliamentary, or otherwise, or which may or shall during the term aforesaid, be charged upon the said The London and Port Stanley Railway or its appurtenances, or upon the said parties of the first part [The London and Port Stanley Railway Company] on account thereof, or on account of any of its property.

By Ontario statute 1950, c. 105, ss. 7 and 8, it was enacted:

7. The Corporation of the City of London is hereby authorized and empowered, in addition to all other powers now vested in it, to acquire, operate and dispose of the undertaking and assets of The London & Port Stanley Railway Company, or any part thereof, and such authority and powers may be, by by-law, delegated to The London Railway Commission.

8. The Corporation of the City of London is hereby authorized and empowered and declared to have had the authority and power to acquire, use, hold and dispose of lands, premises, buildings and equipment throughout the County of Middlesex and the County of Elgin for the purposes of or in any way used in connection with the operation of The London & Port Stanley Railway or the advancement of the business thereof.

It may be added that (although this occurred after 1952) there is an Ontario statute, 1953, c. 118, ratifying and confirming an agreement of October 23, 1952, between the City of London and Canadian National Realties Limited and another, by the terms of which the City became the owner of the Canadian National company’s 2,347 shares

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of the railway company, and it was agreed that, upon obtaining the necessary statutory authority, all the assets and undertaking of the railway should be transferred to the city. All parties to these proceedings agree that no such transfer may be made without a special Act of the Parliament of Canada and this has not been obtained.

In the year 1951 the City of St. Thomas assessed the railway company as owner of certain lands within its limits; the Village of Port Stanley assessed the railway company and the City of London as owners of certain lands within the limits of that municipality; and the Township of Yarmouth assessed the railway company and the City of London as owners of certain lands within its limits. In each case in 1952 the taxes imposed for that year on the lands assessed in 1951 were paid by the London Railway Commission to the assessing municipality and it was for a refund of these taxes that the applications were made under s. 124 of The Assessment Act. The applications went through the regular channels and were ultimately granted by the Ontario Municipal Board, but the latter’s orders were set aside by the Court of Appeal. The present appellants allege that by virtue of certain provisions of The Assessment Act, as amended in 1952, the real property upon which the taxes had been paid had become exempt from taxation during the year 1952. The validity of that contention depends upon the proper construction of s. 4(9) and s. 39 of the Act, as amended by 1952, c. 3, which amendments, although assented to on April 10, 1952, were by virtue of s. 21 of the amending Act deemed to have come into force on January 1, 1952.

At the time of the assessments in 1951, s. 4(9) of The Assessment Act read as follows:

4. All real property in Ontario shall be liable to taxation subject to the following exemptions:…

9. Except as provided in sections 39 and 40, the property belonging to or leased by any county or municipality or vested in or controlled by any public commission wherever situate and whether occupied for the purposes thereof or unoccupied; but not when occupied by a tenant or lessee, nor when used for parking vehicles where a, fee is charged for such parking.

As to the exceptions referred to, we are concerned only with subs. (1) of s. 39:

39. (1) Land owned or leased by or vested in a municipal corporation or commission or in trustees or any other body acting for and on behalf of a municipal corporation and used for the purpose of supplying water,

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light, heat or power to the inhabitants of the municipality, or for the purposes of a transportation system or telephone system shall be liable to assessment and taxation for municipal and school purposes in the municipality in which it is situate at its actual value, according to the average value of land in the locality.

By the amending Act of 1952, para. 9 of s. 4 was amended by striking out the words at the commencement thereof “Except as provided in sections 39 and 40”; and s. 39 was repealed and the following substituted therefor:

39. (1) In this section,

(a) “commission” means the council of a municipal corporation, or a commission or trustees or other body, operating a public utility for or on behalf of the corporation;

(b) “public utility” means a public utility as defined in The Department of Municipal Affairs Act.

(2) For the purposes of this section, land and buildings owned by and vested in a municipal corporation and used for the purposes of a public utility shall be deemed to be vested in the commission operating the public utility.

(3) Every commission shall pay in each year, to any municipality in which are situated lands or buildings owned by and vested in the commission and used for the purposes of the public utility it operates, the total amount that all rates, except, subject to subsections 4 and 5, rates on business assessment, levied in that ‘municipality for taxation purposes based on the assessed value of the land at the actual value thereof according to the average value of land in the locality and the assessed value of such buildings, would produce.

* * *

(10) The provisions of this section shall apply notwithstanding anything in this or any other general or special Act or any agreement heretofore made and any agreement heretofore made, under which a commission pays taxes, or money in lieu of taxes or for municipal services, shall be void.

By s. 1(g) of The Department of Municipal Affairs Act, R.S.O. 1950, c. 96 (referred to in para. (6) of s. 39(1)) “public utility” is defined as including:

...any street or other railway system…which [is] vested in or owned, controlled or operated by a municipality or municipalities or by a local board.

It appears to be clear that if the latter part of s. 4(9) of The Assessment Act before the 1952 amendments had stood alone, the lands of the railway company, which had been leased by the City of London, would have been exempt from taxation, because such lands were “property...leased by [a]…municipality”. However, that provision commenced “Except as provided in sections 39 and 40”, and the effect of the exception in s. 39(1) was that such lands were assessable and taxable as “land…leased by…a municipal corporation”.

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By the amendments in 1952, the words quoted above at the commencement of s. 4(9) were stricken out and in the new s. 39 the only provision for the payment of rates is in connection with lands or buildings “owned by and vested in the commission”, which, by virtue of subs. (2), applies only to “land and buildings owned by and vested in a municipal corporation”. Undoubtedly the words “owned” and “owner” may be susceptible of different meanings, depending upon the subject-matter under consideration. That is shown by the cases referred to in the reasons for judgment of the majority of the Court of Appeal, although it might be pointed out that the decision of the Divisional Court in York et al. v. Township of Osgoode et al.[3] was reversed by the Court of Appeal[4] and that it was the latter’s judgment which was affirmed by this Court[5]. The distinction between an owner and tenant in the law of real property is well known and is recognized by s. 1(o) of The Assessment Act:

(o) “tenant” includes occupant and the person in possession other than the owner.

Generally speaking, under The Assessment Act the interest of an owner and of a tenant are not valued separately for the purposes of assessment or taxation. In s. 21 the Legislature is concerned with farmers and their relatives. Section 32, relating to the assessment of Crown lands, is dealing with a specific subject and there the tenant of such lands is to “be assessed in respect of the land in the same way as if the land was owned or the interest of the Crown was held by any other person”. I cannot agree that the majority of the Court of Appeal were justified in relying upon subs. (10) of s. 30:

(10) Where land is assessed against a tenant under subsection 4 or 9, the tenant, for the purpose of imposing and collecting taxes upon and from the land, shall be deemed to be the owner.

Under this provision the tenant is deemed to be the owner only for the purpose of imposing and collecting taxes upon and from the land which has been assessed against the tenant under subs. (4) or (9), the first of these providing that occupied land owned by a person who is not a resident in the municipality shall be assessed against the owner, if

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known, and against the tenant, and the second providing for the case of joint owners one of whom is not resident in the municipality and particularizing what is to happen if the land is occupied by any of the owners or if it is unoccupied.

It was argued that in any event the City of London is the owner of the lease; that “land” in s. 39(2) and “lands” in s. 39(3), enacted by 1952, c. 3, s. 10, included a leasehold interest by virtue of the combined operation of s. 33 of The Interpretation Act, R.S.O. 1950, c. 184:

33. The interpretation section of The Municipal Act shall extend to all Acts relating to municipal matters.

and s. 1(g) of The Municipal Act, R.S.O. 1950, c. 243:

1. In this Act,…

(g) “land” includes lands, tenements and hereditaments, and any estate or interest therein, and any right or easement affecting them, and land covered with water.

However, s. 1 of The Interpretation Act enacts:

1. The provisions of this Act shall apply to every Act of the Legislature contained in these Revised Statutes or hereafter passed, except in so far as any such provision,

(a) is inconsistent with the intent or object of the Act; or

(b) would give to any word, expression or clause of the Act an interpretation inconsistent with the context; or

(c) is in the Act declared not applicable thereto

and s. 2 provides:

2. Where an Act contains an interpretation section or provision, it shall be read and construed as subject to the exceptions contained in section 1.

To give to “land” or “lands” in s. 39(2) and (3), as enacted in 1952, the meaning contended for by the respondents would be both inconsistent with the intent or object of The Assessment Act and would give to those words an interpretation inconsistent with the context.

Upon a consideration of The Assessment Act in its entirety, even before the 1952 amendments, I am of opinion that a lease to the City of London for 99 years did not place that municipality in the position of an owner. I am also of opinion that the effect of those amendments is to exempt from taxation the railway property leased by the City of London because it is not “owned by and vested in”

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the City. I have not overlooked s. 18 of The Interpretation Act:

18. The amendment of an Act shall not be deemed to be or to involve a declaration that the law under such Act was, or was considered by the Legislature to have been, different from the law as it has become under such Act as so amended.

But this cannot apply if the meaning of the Act as amended and read as a whole is clear, as in my view it is.

The special point with reference to the appeal as against the City of St. Thomas relates to the powers of the Ontario Municipal Board. It was argued that on June 24, 1954, the Board gave a decision which, not having been appealed from, prevented the Board from reconsidering the matter and making its order of October 18, 1955. However, for the reasons given by Hogg J.A., with whom the other two members of the Court of Appeal agreed, there is no substance in the point, since the Board had power to vary its order as provided by s. 46 of The Ontario Municipal Board Act, R.S.O. 1950, c. 262, as amended. This view, however, does not affect the proper disposition of the appeals, which should be allowed, the orders of the Court of Appeal set aside and those of the Board restored. These latter have the effect of directing a refund of the 1952 taxes paid to each of the respondents. The appellants are entitled to their costs in this Court and in the Court of Appeal.

Appeals allowed with costs throughout.

Solicitors for the appellants: Fasken, Robertson, Aitchison, Pickup & Calvin, Toronto.

Solicitor for the respondents: W. Scott McKay,St. Thomas.