Borrowing of moneys by trustees- Bonds or debentures issued-Resolution adopted by Trustees under section 244 of the Education Act- *Nov.8,9,10 Stipulating that a special tax "shall be levied annually"-Whether wording of resolution sufficient to create a tax-Whether resolution otherwise legal and regular-Privilege on immovable for school *Mar. 23 assessment-Property owned by dissentient when taxed and later sold *Apr. 24,25 to a Roman Catholic-Scope of the tax exemption granted to religious *June 22 corporations under sections 251 (8) and 424-Issue of bonds or debentures authorized under section 946-Whether both the bonds or debentures and the resolution providing for their issue are validated thereby Education Act, R.S.Q., 1925, c. 188, now R.S.Q., 1941, c. 59. The respondents trustees, in 1925, passed a resolution to borrow a sum of $25,000 through an issue of bonds or debentures payable in thirty years, the purpose of the loan being the rebuilding of a school recently destroyed by fire. The resolution stipulated inter alia that "to provide for the annual interest and sinking fund of these debentures, a special tax * * * shall be levied annually upon all taxable property on the collection roll of the school trustees of this municipality at present in force * * * and on any other taxable property that may come under the control of the said school trustees during the term of these debentures; and all lands subject to the said tax now entered on the said roll * * * shall be bound and liable for the special tax, until the full and final payment and discharge of the said debt." At the time the resolution was adopted, the property, on which it is claimed special taxes are due, belonged to one Wright, a dissentient, subject to the jurisdiction of the respondents. In 1937, the property was sold to the appellant, a Roman Catholic institution, exempt from the payment of school assessments by force of sections 251 (3) and 424 of the Education Act. In 1938, 1939 and 1940, the respondents trustees passed resolutions by which the appellant's property was assessed at $51.91, $52.09 and $904.47, the increase in the last assessment being the result of improvements and the construction of buildings for an amount exceeding $500,000. In 1941, the respondents brought against the appellant an hypothecary action for $1,016, respresenting the above mentioned assessments and interest. The Superior Court dismissed the action; but the appellate court reversed that judgment and maintained the action as brought. *PRESENT.-Rinfret C.J. and Hudson, Taschereau, Rand and Estey JJ. 41294-1
On the appeal before this Court:
The Chief Justice and Taschereau J. were of the opinion that the appeal should be allowed in full, Hudson and Estey JJ. were of the opinion R
Q SANT that the appeal should be dismissed and Rand J. was of the opinion that the respondents trustees were entitled to succeed, in part, in their action. As a result, it was
Held that the appeal should be allowed in part and the judgment of the appellate court be modified so that the amount of the taxes awarded to the respondents be reduced to accord with the value of the property as it appeared on the valuation and collection rolls in force in 1925.
Per The Chief Justice: The respondents' action is an hypothecary action, i.e. an action to enforce an alleged hypothee or privilege, and they have failed to show that the resolution of 1925, nearly all of its clauses being illegal and ultra vires, was effective for the purpose of creating a privilege upon the immovable property then owned by Wright, which privilege would have followed the property into the hands of the appellant.
Per The Chief Justice and Taschereau and Estey JJ: The resolution of 1925 was not passed in conformity with the imperative provisions of sections 244 (1) of the Education Act. Under that section, "no issue of bonds may be made unless there be imposed an annual tax * * *." The resolution does not impose a tax immediately: it only states that a tax shall be imposed each year: "shall be levied annually."
A resolution providing for the imposition of a tax in the future does not meet the requirements of that section and is ineffective to operate a valid issue of bonds.
The School Commissioners of St. Adelphe v. Charest ([1944] S.C.R. 391) followed. Per Estey J: Such contention would have been available to the appellant, if it had been made before the approval of the resolution by order in council under section 246, the existence of this approval distinguishing this case from the above decision.
(Section 246 is further commented below.)
Per Hudson J.: The principle of that decision is not applicable to this case: in the Charest case, there was no definite imposition but rather a promise to do so in the future, while, in this case, there was an immediate burden imposed to be satisfied in a definite way; moreover, there was not in that case an issue and sale of bonds approved by order in council under section 246.
Per Rand J.: Although, in the resolution, there is no express imposition and the future tense is used in the expression "shall be levied", the paragraph providing for the taxation should nevertheless be read to imply in fact a present imposition sufficient for the purposes of section 244.
The rule of the Charest case should not be extended beyond the precise words that were there dealt with.
Per The Chief Justice: The resolution of 1925 declared that the "special tax * * * shall be levied annually upon all taxable property on the collection roll * * * at present in force."
The appellant's action was not based upon the collection roll of 1925-1926 and the amounts for which the Trustees claimed a privilege result from the collection rolls of 1938-1939-1940, at a time when the appellant's property was not taxable.
The respondents' claim is therefore contrary to the text of the 1925 resolution.
TRks Per The Chief Justice: The 1925 resolution cannot be reconciled with subsection (3) of section 244. The valuation of the property having THE been fixed once and for all on the collection roll of 1925, it would be contrary to the text of the resolution, and therefore illegal, for the secretary-treasurer to assess that property for a different amount in collection rolls prepared by him under instructions given to him by subsequent resolutions.-The resolution contains also another illegality: there is no provision, either in the Education Act or in the Civil Code, which authorizes the creation of a privilege upon future property.
Per The Chief Justice and Taschereau J.: The privilege for school assessments is not immediately created at the time of the adoption of the loan resolution, but comes into existence only after the collection roll comes into force. Per The Chief Justice: Such privilege, at the time it thus comes into existence, cannot be related back to the date of the original resolution, at least so far as the privilege or hypothecary claim is concerned.
Per Hudson J.: The language of the 1925 resolution is clear and definite. The property therein described was "bound and liable for the special tax (in each year) until the * * * final payment of the debt." levy sought by the present action is merely the maturing of the tax obligation imposed by the original resolution.
The charge operates from the time the bonds are sold until they are finally paid in full. The purchasers of the bonds relied on the terms of the resolution and subsequent purchasers took with implied or express notice of them. Any withdrawal of property from the taxable area so defined would throw on the remaining properties a greater burden than was assumed by the property owners when the resolution was passed and it would deprive the bond holders of security assured to them when they bought the bonds. Under the circumstances, the Court would not be justified in refusing to give effect to the resolution unless compelled to do so by clear and definite mandate.
Per Taschereau J.: There must be necessarily a personal debtor bound to pay a tax. It cannot be conceived that a tax imposed solely on an immovable could exist without a person having the legal obligation to pay it and against whom it could be legally claimed. Personal liability is from the beginning fastened on the owner of the immovable, because he is then under the jurisdiction of the school commissioners or trustees and the immovable is taxable because he owns it. Such personal liability ceased to exist when the owner originally liable has sold the property "in respect of which" he has been taxed; the liability is then incumbent on the purchaser, whatever his religion may be.
Per Estey J.: The school tax is primarily a property tax, but the Education Act, when read as a whole, contemplates a personal liability upon the owner. Therefore there would be a personal liability within the meaning of the Act upon the appellant.'
41294-1i
Per Taschereau J.: When a tax is "imposed" by virtue of a loan resolution under section 244, the immovables subjected to the jurisdiction of the Trustees are from that time determined in advance as bound Tids to be later charged with a privilege for the annual tax in consequence of the combined effect of the original resolution and of the collection roll duly homologated, and such immovables cannot be withdrawn from the payment of the tax notwithstanding the fact that they become the property of another person and even if the latter is entitled to the exemption granted by the Education Act.
Per Taschereau and Estey JJ.: The religious communities cannot claim the exemption granted to them by sections 251 (3) and 424, if they were not owners of the immovable at the time the tax has been originally imposed.
Per Rand J.: The language of section 244 should be constructed to mean that an "annual tax",-annual in relation to the years of the terms, for instance, of a bond issue-, carrying inplicitly the characteristic of a specific amount in relation to each separate parcel of land is declared, and that it is en marche to become definitive as a realizable exaction as each year is reached, and as it is extended on a collection roll.
It is as if the resolution in 1925 were in the words: a tax of $30 on property "A" is now imposed for the year 1940, and as if it were repeated in 1940. An annual resolution is passed in advance: it describes a taxing effect to be attained in future. But the declaration of a potential tax in a certain amount in respect of each taxable immovable for each year during the currency of the obligation, as a specific imposition, can be made only by reference to the valuation or assessment roll, at the time of the resolution, in force. When the tax becomes levied in each year as the collection roll is completed, the time of payment is determined, but whether there is determined also personal liability for each year's tax, there is no need to enquire. The resolution, then, fixes as of its date the amount of the annual levy, the lands to be taxed, and the property valuations.
Section 391 provides for the homologation of the collection roll, and after the period for payment has expired the taxes become a special hypothecary charge upon the property taxed.
Even if that section does not apply to a special assessment, the taxes, upon default of payment, would become a privilege upon the immovables under article 2009 and 2011 of the Civil Code.
An order in council was passed, in pursuance of section 246 of the Education Act, stating that the Minister of Municipal Affairs had reported favourably that the Trustees be authorized to borrow moneys in conformity with the resolution of 1925, that all the formalities required by the law had been fulfilled and that accordingly authorization to borrow should be granted. Section 246 enacts that "every bond or debenture issued in virtue of a resolution (so) approved * * * shall be valid, and its validity shall not be contested for any reason whatsoever".
Held that, under that section, not only the bond or debenture is validated, but the resolution providing for their issue must also be deemed to have been passed in conformity with section 244. Chief Justice and Taschereau J. contra.
Per The Chief Justice and Taschereau J.: The intention of the legislature in enacting section 246 has been to put the validity of the bonds and debentures beyond all discussion so that the bondholders would have an absolute guarantee of the legality of the bond TRs itself, notwithstanding the invalidity or illegality of the proceedings leading to its issue. But the section cannot be invoked in favour of resolution which would be null and void.
Any issue that may arise between the Commissioners or the Trustees and a ratepayer is in no way affected thereby. Otherwise the result would be that the Lieutenant Governor in Council would be made a judge of the validity and legality of all the loan resolutions adopted by the former and that the courts would be entirely ousted of their jurisdiction in the matter.
Per Hudson J.: The prohibition against the issue of bonds, in section 244 ceased to have any application here once the resolution to borrow had been approved as being adequate for the purposes of the section and the bonds certified, as they were, under section 246. When sold they created a legal obligation.
The resolution and the order in council were duly registered. The purchasers of bonds were entitled to accept the certificates as conclusive.
The appellant itself cannot complain of lack of notice when it bought the property.
Per Rand J.: The bonds in this case, bearing the requisite certificate are admittedly valid, but there is created under section 246 more than a valid debt. The whole object of the section is to conclude such questions as those in the present case. The purchaser of a bond is entitled to the security he would have had if every preliminary or conditional step had been taken in exact accordance with the provisions of the statute and the purchaser cannot be told later that the condition essential to that validity did not in fact or in law exist. The special assessment is for the sole benefit of the bondholders. They are the beneficiaries of that power to tax and the sufficiency of the resolution must be deemed concluded not only in relation to the bond as a debt, but also to the taxation intended to be appropriated exclusively to the payment of that debt. Per Estey J.: The language used by the legislature in enacting section 246 is clear and definite and, when read and construed with the other relevant sections of the Act and particularly section 244, its meaning is that the approval therein provided for applies to the validity of the resolution and includes both the validity of the bonds and the existence of the security.
Comments upon the decision of this Court in Canadian Allis-Chalmers Limited v. The City of Lachine ([1934] S.C.R. 445).
APPEAL from the judgment of the Court of King's Bench, Appeal Side, province of Quebec, reversing the judgment of the Superior Court, Trahan J. (1) and maintaining the respondents' action.
(1) [19431 R.L. N.S. 186.
The material facts of the case and the questions in issue are stated in the above head-note and in the judgments now reported.
Fernand Choquette K.C. and Eugene Marquis K.C. for John Aylen K.C. for the respondents.
THE JUSTICE.-This is an hypothecary action, that is to say, an action to enforce an alleged hypothec or privilege.
It means, therefore, that the respondents were bound to show that, in the premises, a privilege has been created upon the immoveable property of the appeliant as a charge for the payment of certain special taxes imposed by the respondents in connection with a loan by means of an issue of bonds under a resolution adopted by the respondents on the 19th of August, 1925.
At the time when the resolution was adopted the property, on which it is claimed a privilege exists, belonged to one R. H. Wright, a dissentient, subject to the jurisdiction of the respondents. Later the appellant acquired the property from Mr. Wright and, at the material dates, it was the owner in possession of the property in question. The price of the sale from Wright to the appellant was $22,925, but, as a result of improvements and the construction of buildings, the total value of the property in 1940 had reached the sum of $500,000.
It is admitted that the appellant is exempt from the payment of school assessments by force of section 251 of The Education Act (Chap. 133 of R.S.Q.
1925, as amended).
The Superior Court dismissed the respondents' action, but the Court of King's Bench (Appeal Side) reversed that judgment and maintained the action as brought. The point at issue is whether the resolution of the 19th of August, 1925 has immediately affected by privilege for the amount of the special tax the property then belonging to Wright in such a way that the appellant who purchased it now holds the property subject to the alleged privilege.
Some subsidiary points were raised at the argument as to the right of the respondents to bring action for the purposes herein, and also as to whether, if the privilege is held to exist, it extends to the improvements and new buildings added by the appellant to the property purchased from Wright, but, in the view I take of the litigation, these subsidiary points are immaterial.
With regard to this last point concerning the improvements and additional buildings, it is sufficient to say that, a privilege, as clearly stated in article 2017 of the Civil
Code, being only an accessory and subsisting no longer than the obligation which it secures, necessarily requires the existence of a third party as debtor of the personal obligation. In the present case, as it is impossible under the law that the appellant could be the personal debtor, it follows 'that Mr. Wright, or his successors, must be the personal debtor, and it is hardly to be suggested that the latter's personal debt could have been increased as a consequence of the construction and improvements made by the appellant.
We have in the record the collection rolls respectively for the year 1926, immediately following the adoption of the resolution, and for the years 1938, 1939 and 1940, upon which the present claim of the respondents is based.
In 1926 all the properties belonging to Wright appeared on the roll as being valued at about $47,000, and it is not certain that this valuation includes certain properties of Wright which he did not sell to the appellant. At that time the total special tax assessed against Wright for the year ending on the 30th June, 1926 amounted only to $69.92, while the tax which is now claimed hypothecarily from the appellant for the years 1938, 1939 and
1940 amounts to $1,016, being $51.91 for the year 1938 and $52.09 for the year 1939, the improvements and constructions not having been then made on the property, and $904.47 for the year 1940, after the improvements and constructions were made.
One can only surmise what would be the surprise of Mr. Wright, or of his successors, if the respondents proceeded to claim from him or from them, as a personal obligation, the sum of $904.47, which represents the special tax for 1940. It is not likely that he or they could be called upon to pay such a sum; and, if the personal obligation for that sum of $904.47 does not exist against Wright or his heirs, it cannot be pretended that the acces- Rinfret CJ. sory privilege can exist for that sum on the property of the appellant as security for a personal obligation which has no existence.
One need only suggest the objection to show that it repudiates itself.
The present action stands to be decided not on what the Trustees might have done under The Education Act, but upon what they have in fact done. This Court is not called upon to give an opinion upon the relevant sections of The Education Act, but upon the proceedings and resolutions that the respondents adopted for the purpose of the loan.
We have only to decide whether the resolutions which are now before us were effective for the purpose of creating a privilege on Wright's property, which privilege followed the property when it came into the hands of the appellant.
With respect, that is precisely what appears to have been lost sight of in the judgment from which the appeal is brought to this Court. The resolution of the 19th of August, 1925, begins by stating that the Trustees have decided to petition His Honour, the Lieutenant Governor of Quebec, to grant to them authorization to borrow the sum of $25,000, said amount to be secured by an issue of debentures payable thirty years from the first day of September, 1925, such debentures to bear interest at the rate of five per centum per annum, payable half yearly on the first day of March and September in each year, and to be of the denomination of $500 each, there being attached to each debenture coupons for the amount of each payment of interest and to be made payable at the Royal Bank of Canada in Aylmer, Que.
Then comes the important clause, which must be reproduced in full in view of the fact that the whole contention of the Trustees relied on it:property on the collection roll of the school trustees of this municipality at present in force, and on the said school trustees proportion of all taxable property belonging to incorporated companies, and on any other tax- CON able property that may come under the control of the said school trustees TRhS during the term of these debentures; and all lands subject to the said tax now entered on the said rolls, together with the buildings and improvements thereon made or erected or which may be made or erected thereon during the term of these debentures, shall be bound and liable for the said special (tax, until the full and final payment and discharge
TowN or of the said debt.
To provide for the payment of these debentures when due, a sinking Rifret CJ. fund shall be provided in which shall be deposited each year and shall remain deposited with accrued interest during the term of these debentures, an amount of 2A per cent. of the amount of debentures sold.
The first point to be noticed about the above clause is that, contrary to the imperative provisions of section 244, subsection (1), of The Education Act, there is not in that resolution imposed upon the taxable property held for the payment of the loan an annual tax sufficient for the payment of the interest each year and at least one per cent.
of the amount of the loan, besides the interest, to create a sinking-fund for the extinction of the debt. The resolution states:- A special tax * * * shall be levied annually
The decision with respect to the tax is expressed in the future.
It does not impose a tax immediately; it only states that a tax shall later be provided for-"shall be levied annually". That is very clear; the imposition will be made only each year in the future. Moreover, according to the text of the resolution, the special tax shall be levied annually upon the taxable property on the collection roll "at present in force". Further, the special tax shall be levied annually not only on the taxable property then under the jurisdiction of the Trustees, but also on any other taxable property that may come under the control of the said school trustees during the term of these debentures * * * until 'the full and final payment and discharge of the said debt.
Now the present action is not based upon the collection roll of 1925-1926. The amounts for which the Trustees claimed a privilege on the appellant's property result from the collection rolls of 1938-1939-1940. That alone would be sufficient to declare that the respondent's claim is irregular and illegal and contrary to the very text of the resolution of 1925; but the fundamental illegality is evidently that the resolution of 1925 was not adopted in conformity with section 244, subsection (1), of The Education Act. On that point this Court is bound by its own judgment in the case of The School Commissioners of St. Adelphe v. Charest and Douville (1), where it was decided that a resolution in similar terms, that is to say, providing for the imposition a tax only in the future, does not meet the requirements of section 244-and is ineffective to operate a valid issue of bonds. That is what the Court of King's Bench (Appeal Side) of Quebec decided in that case and which was affirmed in this Court.
The learned counsel for the respondents, notwithstanding his ingenious argument, has not succeeded in convincing me that any distinction whatever can be made between the St. Adelphe case (1) and the present case.
But, in addition to this fundamental illegality, the 1925 resolution contains many other illegalities, inter alia: First, it is impossible to reconcile that resolution with subsection (3) of section 244.
That subsection enacts that:- It has already been pointed out that the resolution stipulates that the special tax shall be levied annually upon all taxable property on the collection roll "at present in force".
Incidentally, that appears to me to be the intention of the law expressed in subsection (1) of section 244. But, in such a case, the valuation of the taxable property held for the payment of the debentures being fixed, once and for all, as it appears on the collection roll of 1925, it would evidently be contrary to the text of the resolution and, therefore, illegal for the Secretary-Treasurer to make each year a new collection roll assessing against the taxable immoveable property liable for the payment of the loan a different amount based on the collection roll of each of those years.
One can see in the present case the anomalous result of such a practice. While Mr. Wright's special tax in 1925 amounted to 869.92, it is now claimed by the respondents, as a result of the collection roll of 1940, that Mr. Wright's personal obligation would amount for that year alone to the extraordinary sum of $904.47; and, of course, the consequence of such a contention is that the privilege now sought to be enforced against the appellant's property instead of being only $69.92 is $904.47 for the year 1940.
It may be that subsection (3) of section 244 is incompatible with the true construction to be put on subsection
- It is not easy to reconcile subsections (1) and (3)
of section 244, for, if subsection (1) be interpreted in the sense that seems to be not only likely but imperative, the result would be that subsection (3) is merely surplusage and that, in order to conform with the requirements of subsection (1) (and incidentally to the clear provision of the 1925 resolution) the special collection roll could only be and ought to have been a mere repetition from year to year until the payment of the loan or the redemption of the bonds. Instead of that, we have here collection rolls assessing varying amounts for the years 1938, 1939 and
1940, which are made the bases of the action and which in each case are different from the amount appearing on the collection roll of 1926. That is contrary to the provisions of the 1925 resolution; and, moreover, it shows beyond doubt that the claim of the respondent is not based on the resolution of 1925 but is necessarily based on the resolutions of the years 1938, 1939 and 1940.
All that the Secretary-Treasurer of the respondents had to do in order to obey the instructions contained in the resolution of 1925 was to repeat each year in the collection roll prepared by him, against each property liable for the payment of the loan, the amount fixed in 1925 and based on the valuation roll of that year. He did not require any fresh permission or order from the Trustees to act in such a way. Subsection (3) made it his "duty" without it being necessary that he should receive new instructions to that effect.
But such was not 'the method adopted by the respondents.
Each of the resolutions adopted by them, and alleged in the declaration in the present case, on the 6th
December, 1938, the 13th November, 1939, and on the 26th
November, 1940, confirms the interpretation now given to the resolution of 1925, and which is that no tax was actually imposed in 1925, that the resolution contains only the expression of the intention to impose a tax later, that the RADEMPTEUR imposition so levied was in fact made only in each year, THE as appears from the resolutions of 1938, 1939 and 1940, and that indeed the Trustees in this case proceeded exactly TowN in the manner referred to by this Court in its judgment in Aruare the St. Adelphe case (1).
In 1925: a declaration of the RinfretCJ. intention to impose a tax later; and then each subsequent year a resolution imposing a tax, as is more particularly evident in the resolutions of 1938, 1939 and 1940. However, in these later resolutions the Trustees did not limit themselves to giving instructions to their Secretary-Treasurer to prepare a special collection roll in conformity with the resolution of 1925; they actually imposed a tax for each year, as is well shown by the text of the resolutions themselves, as follows:- December 6th, 1938. That a tax rate of mills on Aylmer property, and 61 mills on South Hull Township property be and is hereby levied on all property under the control of the School Trustees, as a general tax for the year 1938-39 and a special tax rate of I mills be levied on all properties on which we are entitled to collect for the year 1938-39 and also that a discount of 5 per cent. be allowed on all current general school taxes paid on or before January 31st, 1939.
November 13th, 1939. That a tax rate of 10 mills on the Aylmer property on our collection roll and a tax rate of 61 mills on our portion of South Hull Township be and is hereby imposed on all property under our control as a general school tax and a special tax rate of mills be imposed on our whole school district for the year 1939-40, also that a discount of 5 per cent. be allowed on all current general school taxes paid on or before January 31st, 1940.
November 26th, 1940. That a tax rate of 10 mills on Town of Aylmer and 61 mills on our portion of South Hull Township be and is hereby imposed as a general tax on the property under our control for the year 1940-41 and a special tax rate of mills be imposed on our whole district for the same year. Also that a discount of 5 per cent. be allowed on. current general taxes paid before January 31st, 1941.
There is really no difference in the text of these three resolutions. In 1938 the Trustees used the word "levy", while in 1939 and 1940 they used the word "impose". No doubt the Trustees were of the opinion that the two words are synonymous, or at all events that they have the same effect.
In section (1) of The Education Act, subsections (1) [9441 S.C.R. 391.
and (18), the words "school tax", or "tax", are defined as meaning "all contributions that may be levied in virtue of this Act", and the words "school assessment"
r as meaning "the tax which is levied on the taxable property of a school municipality". In the French version of the Act, in subsections (17) and (18) of section (1), the word "impose is used for the word "levy" in the English version.
On the other hand, section 244 uses the word
"impos"
in French and the word "impose" in English in subsection (1) as well as in subsection (3).
In section
249 the word "impos" in French is inserted as the equivalent of the word "levy" in English; and, if one goes through the several sections of the Act, it will be seen that the words "impose" and "levy" are used interchangeably, as well as the words "tax" and "assessment".
It is clear, therefore, that the respondent Trustees have really, in each of the years 1938, 1939, and 1940, in order to provide for the payment of the interest and for the sinkingfund in each of those years, as provided for in section 244, imposed or levied a special tax which was only then and there imposed or levied and which was not imposed or levied in 1925.
That is the only interpretation which must be given to all those resolutions; that the special tax for which a privilege is now sought to be enforced against the appellant by means of the present hypothecary action was actually imposed in 1938, 1939 and 1940.
It is clear that the resolution of 1925 and the three subsequent resolutions cannot exist concurrently and at the same time. The evident intention of the three last resolutions was to complete that of 1925 and that is exactly what is suggested in the judgment of this Court in the
St. Adelphe case (1).
It is only in the three resolutions of 1938, 1939 and 1940 that the Secretary-Treasurer could find the authority to prepare the collection rolls which are made the bases of the present action.
Unfortunately, the illegality of the respondent Trustees' resolutions does not stop there. The 1925 resolution enacts that the immovable properties which are to be held for the payment of the loan are those which appear on the collection roll then in force; and, while the resolution of
1938 is ambiguous in that it states tha.t
, those of November, 1939 and November, 1940, pretend impose the special tax "on our whole school district for the year 1939-40" and "on our whole district for the same year" (i.e., 1940-41).
Therefore, the resolutions of 1939- 40 make the imposition on all the properties which then formed part of the respondents' school district, and that CJ. is directly opposite to what was done in the resolution 1925. In that respect it is impossible to reconcile the two last resolutions with that of 1925. They cannot co-exist because they are contradictory, and the two last resolutions can be held as valid only if they are envisaged as having amended the resolution of 1925.
Now, the only authority of the Secretary-Treasurer to prepare the collection rolls for the years 1939-40 and 1940-41, as he has done, can be found only in the resolutions of 1939-40, which brings us to the following dilemma: either the 1925 resolution has really been amended, as just stated, and, therefore, the respondents have illegally modified the bases of the collection of taxes providing for the interest and the sinking-fund of the loan of 1925, or the resolutions of 1939-40 have illegally imposed a personal tax against the appellant which is exempt from taxation.
In the first case, the procedure adopted by the respondents is contrary to the imperative provisions of sections 242 and 244 of The Education Act, for the resolution of 1925 alone has been adopted with the authorization of the Provincial Secretary and the approval of the Minister of Municipal Affairs, Trade and Commerce.
It follows that the Trustees had no authority whatever to modify it. Or, in the second case, the Trustees, in 1939-40, proceeded in virtue of the new resolutions which then and there imposed the special tax, and these two resolutions are doubly inoperative both from the general point of view because they had not received the previous authorization of the Provincial Secretary or the approval of the Lieutenant Governor in Council, or of the Minister of Municipal Affairs, Trade and Commerce; and, moreover, from the particular point of view of the appellant because at the time the tax was then and there imposed the appellant was exempt from taxation and no imposition could validly be made against it.
Furthermore, the 1925 resolution contains another illegality resulting from the fact that it pretends to impose There is no provision, either in The Education Act or in the Civil Code of the province of Quebec, which authorizes the creation of a privilege upon future properties, or properties that may come in.
The conclusion is that the so-called resolution of 1925 is illegal and ultra vires from beginning to end, and that is the resolution on which the respondents now pretend to base their claim against the appellant.
Indeed the respondents press their contention much further. They would like the Court, notwithstanding all these illegalities, to regard these illegal and ultra vires clauses of the resolution as if they did not exist, as if they had never been inserted therein, and to proceed to apply the resolution as if it contained only the clauses which are not tainted with illegality and absence of authority.
That would really be an absolute novelty in the jurisprudence of the province of Quebec. All that the Courts would have to do would be to strike out what is illegal and ultra vires and to hold the balance of the resolution as being the true resolution which the respondents adopted and which they would now have the right to use as the basis of their hypothecary claim.
The first difficulty which comes to the mind to prevent the courts from adopting that point of view is that, when everything that is illegal and ultra vires is withdrawn from the 1925 resolution, there is nothing left. Moreover, I would be very much surprised if there could be found in the Quebec jurisprudence a single case where a resolution thus tainted with illegality and want of authority.
even only in part, was held to be valid for those parts of it which were not found illegal and ultra vires.
Then the Trustees adopted the resolution, as is found in the record, with the conditions therein inserted; and it cannot be assumed that they would have adopted it if these conditions had been eliminated therefrom. In addition to that, they proceeded contrary to the intention reouto expressed in the resolution of 1925, since in 1939-40 they ordered their Secretary-Treasurer to prepare a collection roll affecting not only the properties which were under their jurisdiction in 1925 but equally all those which were under their jurisdiction in 1939 and 1940 ("imposed on our whole school district").
I find it absolutely impossible to CJ. admit that such a resolution and such a proceeding can justify a claim for a tax against the appellant, and still less an hypothecary action.
The charge, hypothec, or privilege may result only, as stated in section 249 of The Education Act, from an assessment which specifically designates the immoveable property assessed, which fixes the amount of the tax, and which becomes a special charge only as a result of the failure to pay within twenty days following the homologation of the collection roll: and section 249 is the only section to be found in The Education Act providing for the creation of a special hypothecary charge upon any property. If it cannot be found there, it does not exist under The Education Act; while, if recourse is had to the Civil Code, the privilege for school rates exists only in conformity with article 2011, and in that case the assessment and rates become privileged only "upon the immoveable specially assessed", and the provisions of that article are imperative. They constitute a principle from which the Civil Law has never departed.
Now, in this case, the conditions required by section 249 of The Education Act have not been followed, and if we look at the resolutions of 1938, 1939 and 1940, and apply section 249, then the privilege took effect only twenty days after the collection roll in each of those years came into force; or, if we have recourse to article 2011 of the Civil Code, the property of the appellant was
"specially assessed" only from the moment that these collection rolls became applicable.
Whatever date is chosen, the appellant was then exempt from school tax and any pretended imposition or levy against it was inoperative.
Of course, as suggested by the learned counsel for the respondents, it may be that we are confronted here with a casus omissus and that neither The Education Act nor the Civil Code provides for such a case. However, I fail to see what benefit the respondents could obtain from that situation, because a hypothec or privilege may be created only as a result of a convention, or by the operation of law. Here there was no convention, and, if the law did not forsee the case, no privilege can exist. Therefore, the whole sub-stratum of the respondents' action is completely absent.
At the re-hearing ordered by this Court, counsel for the respondents contended that we need no longer be hampered by the illegalities contained in the resolution of
1925, in view of section 246 of The Education Act. That section enacts that every bond or debenture shall bear the seal of the Department of Municipal Affairs, Trade and
Commerce and a certificate of the Minister of Municipal
Affairs, Trade and Commerce, or any person specially authorized by the latter, establishing that the resolution authorizing the issue of such bond or debenture has been approved by the Lieutenant Governor in Council, or the
Minister of Municipal Affairs, Trade and Commerce, as the case may be, and that such bond or debenture is issued in conformity with such resolution, and that such bond
Counsel for the respondents invited the Court to draw therefrom the conclusion- that as soon as the resolution was approved, as therein stated, not only the bond or debenture is validated but equally the resolution providing for the issue of the bond, and that, although it might have been illegal before, it became legal as a result of the approval. I do not recall that such a construction was ever put on section 246. The intention of the section is simply to validate the bond or debenture and it cannot be invoked in favour of a by-law or a resolution which is illegal, null or void.
Of course, at the re-hearing, our attention was drawn to the fact that there is absolutely no evidence in the record that the bonds issued under the resolution of 1925 bore the seal of the Department of Municipal Affairs and a certificate of the Minister of that Department, or of any person specially authorized by the latter. That alone, would be sufficient to dispose of the discussion of the o application of section 246 to the present case.
But admitting, for argument's sake, that the bonds or debentures were impressed with the seal and certificate in question, in my view, the present case between the Trustees and one of its alleged ratepayers would in no way be RinfretcJ. affected thereby. Section 246 is already sufficiently exhorbitant of the common law to prevent the courts from extending its application. That section does not say that the approval by the Lieutenant Governor in Council or the Minister of Municipal Affairs, Trade and Commerce, has the effect of validating the resolution.
The words "valid" and "validity" are used therein only in respect of the bond or debenture. The intention of the Legislature clearly appears to have been to put the validity of the bonds and debentures beyond all discussion so that the bond holders would have an absolute guarantee of the legality of the bond itself and so that they would be sure they need not preoccupy themselves with the validity or the legality of the proceedings leading to the issue of the bonds. Indeed it might verily be said that the object of section 246 was to provide precisely for the case where the resolution was illegal and to specify that, notwithstanding the illegality of the resolution, the validity of the bond would not thereby be affected.
If the sole approval by the Lieutenant Governor in Council of the loan resolution had the effect of rendering indisputable the validity of the resolution, it was not necessary to provide specifically for the validity of the bonds issued as a result of that resolution. Therefore, if the resolution was valid and legal there was no object in declaring that the bonds themselves would equally be valid and legal; that followed as a necessary consequence. But it is precisely in order to provide for the case where the resolution might be illegal that the Legislature took the opportunity, to assure the bonds holders, to declare that, notwithstanding the illegal resolution, the bond itself would nevertheless be valid, providing it bore the seal and certificate mentioned in sectiton 246.
Otherwise, we would be led to the absurd consequence that the loan resolutions could never be attacked before the courts, for they imperatively require the authorization and approval of the Lieutenant Governor in Council and the Minister of Municipal Affairs, T Trade and Commerce. The result would be that the Lieutenant Governor in Council would be made a judge of the validity and legality of all the loan resolutions adopted by the school commissioners and that the courts would be entirely ousted of their jurisdiction. That question is not raised for the first time. It came before Mr. Justice Demers Rinfret CJ. in the case of Aubertin v. La Corporation du Village du
Boulevard St.-Paul (1) where a municipal by-law, although it had received the approval of the Lieutenant
Governor, was declared null on account of the failure to adopt an essential formality.
The same question also came before Mr. Justice Tellier in the case of Goyer v. La Corporation de la Ville St.- Lambert (2), where the judgment expressly declares that the approval given to an illegal by-law by the Lieutenant
Governor in Council has not the effect of making that bylaw valid, nor to legalize its carrying into effect by the
Municipal Council, and that the law, which validates the bond, may serve as a protection to the bond holder or to the purchaser in good faith of a municipal debenture, but it cannot be invoked in favour of a by-law which is null and void.
No judgment in the province of Quebec can be found to the contrary effect.
But there is much more-our own judgment in the case of Kuchma v. The Rural Municipality of Tach6 (3).
We had to decide a similar case where a municipal by-law, providing for the closing of a road, had received the approval of the Minister under section 473 of the Municipal Act of Manitoba (R.S.M.
1940, ch. 141), and the decision of the Court was:- In that case, Mr. Justice Estey, speaking for the majority of the Court (The Chief Justice and Hudson, Taschereau E and Estey JJ.) said, at p. 239:- That proposition does not appear to me to warrant any discussion and, moreover, that judgment is binding upon this Court.
But the learned counsel for the respondent would like us to go still further. He does not limit his contention to the proposition that the sole approval by the Lieutenant Governor in Council has the effect of validating the resolution of 1925; he argues that, since such approval has been given, the resolution must be held valid not only in the terms in which it was adopted, but that it should be read as if it had strictly followed the terms and conditions of section 244. The result would be that, from the moment the approval is given, the resolution should be envisaged as amended so as to contain the very text of section 244.
This, it is needless to say, is carrying the contention to extreme consequences.
Not only would it have the effect of making the Lieutenant Governor in Council final judge of the legality of loan resolutions by school municipalities, but it would give to the Lieutenant Governor in Council the power to amend the resolution so as to make it conform to sections 242 and 244. Without the slightest hesitation I say that such a proposition is absolutely untenable and The Education Act itself demonstrates that it is so. There is at the present time in The Education Act section 244 (a), which permits the Minister of Municipal Affairs, Trade and Commerce, upon the recommendation of the Superintendent, to amend a loan resolution submitted for his approval. But that section was added to the Act only on March 11th, 1926 (16 Geo. V, chap. 41), so that it does not apply to the resolution of the respondents which was adopted in 1925. Moreover, under this new section 244 (a), in order that the Minister of Municipal Affairs, Trade and Commerce, may modify a loan resolution, it is necessary that there should be first a formal application contained in a subsequent resolution of the School Corporation which passed the original resolution on the recommendation of the Superintendent of Public Instruction; and, even on the application of the School Corporation and the recommendation of the Superintendent, the amendments brought in by the
Minister may only be made in certain cases well specified in section 244 (a). Here there has been no ulterior application on the part of the respondents and no recommendation of the Superintendent of Public Instruction. Besides that, the present litigation does not fall within any of the cases provided for by section 244 (a).
Assuming, therefore, that, in the circumstances, the approval of the Lieutenant Governor in Council would lead to the conclusion that the 1925 resolution now has sufficient value to justify the issue of the bonds, it stands to reason that it has not been modified or amended as a consequence of the approval. It remains within the terms in which it was adopted and must continue to be so read;
and, if those terms do not come within the requirements of sections 242 and 244 of the Act, conformably to the jurisprudence to which we have referred, the resolution must be held incomplete, insufficient and ineffective to impose immediately a special tax, and a fortiori to create a privilege on the properties of the ratepayers which were then subject to the jurisdiction of the respondents. For that reason it would be useless to enter into a discussion of the jurisprudence which has been cited to us so abundantly by counsel for each of the parties in this appeal.
Again, I must repeat that we are not here to decide what may be considered to be the theory of the law in that respect. In each case it is not possible to eliminate the consideration of the text of the resolutions, or by-laws, which have been adopted. It may be that one may find cases more or less similar in the different judgments to which this Court has been referred, but, it is, of course, necessary to make sure that the text of the resolutions, or by-laws, is identical with that of the resolutions, or bylaws, in the other cases which have come before the Courts.
In the Court of King's Bench (Appeal Side), as well as before this Court, great reliance was placed on the j "* dg nt of this Court in Canadian Allis-Chalmers Limited v. The City of Lachine (1).
But it should be noticed that in that case the text of the by-law provided for an immediate imposition of the tax. It read:- As will be seen, the by-law used the present tense. It would, therefore, be idle to attempt to decide the present case by placing reliance on the Allis-Chalmers judgment (1), since the by-law in that case was not drafted in the same way as the resolution in the present case.
Moreover, in the Allis-Chalmers case (1) the question at issue had no relation whatever to the one we are now discussing.
The Allis-Chalmers 'Co. had been exempt .from taxes for twenty-five years. Its properties were not taxable for the whole of those twenty-five years. by-law of the city of Lachine imposed the taxes therein mentioned
What was discussed in that case, what we had to ask ourselves, was: Can such a tax, imposed immediately, affect a property which, on the date of the adoption of the bylaw, had the benefit of exemption, although such exemption had ceased to exist at the time of the homologation of the collection roll whereby it was sought to collect the tax in question?
The question was in order because, at the time of the adoption of the by-law imposing the tax, the exemption was still in force, although it had ceased to exist at the time of the preparation of the collection roll. It seemed decisive in that particular matter, because, under the by-law of the city of Lachine, the tax was imposed on the immovable property then taxable and, at the time the by-law was adopted, the Allis-Chalmers property was not taxable. It followed that the said property did not come within the description' of the immovables upon which the tax was imposed. The consequence was that the Allis-Chalmers property not coming within the bylaw which imposed the tax, it could not subsequently appear on the collection roll prepared by the Secretary- Treasurer to give effect to the by-law itself.
From all that has been said, the consequence -is inevitable that the resolution of the 19th of August, 1925 did not impose a tax nor create a privilege resulting from it RifreCJ. on the properties then in the possession of Mr. Wright as owner. It did not impose a tax because it did not say so and also because the resolution itself was illegal, null and void.
That conclusion makes it unnecessary to examine the question so much disputed in the reasons for judgment of the Court of King's Bench (Appeal Side), and also at the hearing before this Court, as to whether, in a matter of this kind, the privilege granted by law to secure such a tax is created immediately as a result of the adoption of the resolution or by-law, or, on the contrary, it is brought into existence only after the collection roll comes into force. On that point it will be sufficient for me to refer to what has been said in the judgment in the Allis-Chalmers case (1), always observing that it is never sufficient to limit one's self to the construction of the sections of The Education
Act, but that, in the end, the effect of the by-law or resolution depends essentially on the particular text in the particular proceedings which the School Commissioners deemed advisable to adopt.
It would not be out of the way, however, to say that the interpretation given in the Court of King's Bench
(Appeal Side) to what this Court said in the Allis-Chalmers judgment (1) differs toto calo from the true meaning of our judgment in that case, as a reference to all that was said on that subject in the judgment as reported would abundantly show.
Although, in view of the conclusion at which we arrived in the Allis-Chalmers case (1), it was unnecessary to decide the point whether the privilege was immediately created at the time of the adoption of the loan by-law, or whether it came into existence only after the collection roll came into force, we clearly expressed our view that the latter was the true effect of the Quebec law; and, that as a matter o at of fact, before the coming into force of the collection roll, not only was there no privilege existing as a result of the original by-law, but there was not even a personal obligation on the part of the ratepayer who, in accordance with The Education Act, is not called upon to pay anything until within twenty days after the coming into force of the Ridret CJ. collection roll.
Such has always been the jurisprudence of the province of Quebec, and it is strictly in accordance with the text of the law and with the notion of a hypothec or a privilege in the Civil Law of the province. The only exception one could find in the jurisprudence would be possibly the case of La Communautg des Soeurs des Saints Noms de J6sus et Marie v. The Corporation of the Village of Waterloo (1).
To my mind, that case cannot in any way influence our judgment in the premises.
first place, the question in issue there was really this: When a tax has become a charge on the property, does the fact that such property is subse'quently sold to a person or a corporation exempt from taxation have the result of exempting the purchaser of the property from the obligation to pay such a tax, either personally or hypothecarily as holder of the property?
That was the sole point involved in the Waterloo case (1) and there the Court was not called upon to decide at what time the tax became a charge on the property.
Incidentally, it is only fair to remark that the two bylaws which the Court had to interpret in the Waterloo case (1) were not expressed in the future, but constituted an inmediate imposition of the tax in the present tense. That case was heard in 1887 and the wording of those by-laws shows clearly that the form which must be given to by-laws of that kind was well known even at that time. No doubt certain expressions of Buchanan J., and of the Court of King's Bench (Appeal Side), in the Waterloo case (1) would seem to imply that a tax imposed at the same time as the adoption of the loan by-law creates a hypothec on the taxable property and constitutes a charge upon it from that time. Strictly speaking those expressions ought to be taken as obiter dicta, because the courts in that case, as already mentioned, were not called upon to decide that point. But, if it should be assumed that the Waterloo case (1) may be considered as having decided that the privilege is created immediately upon the adoption of the resolution imposing the tax, it is unquestionably the only case in the province of Quebec where that of point has ever been decided in that sense. The jurisprudence is all the other way and no other judgment can be found to that effect, while all the judgments rendered in that province have always decided the contrary. It is so much the case that in the present case the Court of King's
Bench (Appeal Side) stated that it had always been of the opinion that such a point had been definitely settled in the sense that the privilege was created only as a result of the collection roll coming into force, because only then is the amount which the ratepayer must pay specified and only then is the taxable immovable property specially charged with the tax in accordance with article 2011 of the Civil Code. It is sufficient to read the reasons of the judges of the Court of King's Bench (Appeal Side) to find that that Court came to a different conclusion only on account of the erroneous interpretation which it gave to the judgment of this Court in the Canadian Allis-Chalmers case (2), and which led them to a conclusion directly opposite to what we said in that case. In Les Ecclsiastiques du S6minaire de Saint-Sulpice de Montrial v. Masson (3); La Compagnie des terrains Dufresne Limitge v.
Curd et les marguilliers de l'Oeuvre et fabrique de la paroisse de Saint-Frangois d'Assise (4); Goulet v. Corporation de la Paroisse de St.-Gervais (5); Commissaires d'Ecoles de St.-Adelphe v. Charest et Douville (6), and in the
Canadian Allis-Chalmers case (2) itself, the -Court of
King's Bench (Appeal Side) always laid down the law as being that the privilege began to exist only from the time that the collection roll came into force. In the latter case see particularly what was said by Chief Justice Tellier and
Mr. Justice Rivard.
Such was also the opinion of Mr.
Justice Martineau as expressed in his judgment in Les Commissaires d'Ecoles de Saint-Marie-de-Monnoir v. TI Auclair (1).
More conclusively, as far as this Court is concerned, is the judgment rendered by Sir Elz6ar Taschereau in the case of La Banque Ville Marie v. Morrison eit That language is quite clear and leaves no doubt whatever on the point we are discussing.
As a final resort, the respondents' counsel contended that it was not open to the appellant to argue against the validity of the loan resolution, or its effectiveness in creating a privilege upon the property of the appellant, because, in the written admissions, paragraph (5), the appellant had conceded
But it should be noticed that the admission is "were enacted and passed as alleged in said paragraphs". Paragraphs 2 and 3 of the declaration refer to the initial resolution of the 19th of August, 1925; the other paragraphs refer to the three resolutions of December, 1938 and November 1939 and 1940, and also to the collection rolls subsequently homologated in conformity with those three resolutions. If we refer to those paragraphs it will be found that the respondents nowhere in them alleged that the taxes which are now claimed were imposed by the resolution of 1925. On the contrary, they allege that they were imposed only in 1938, 1939 and 1940. The admission of the appellant must be interpreted as it was made and as a whole. In that sense the words:
can have only one meaning and that is that the appellant admitted that the respondents had fulfilled the formalities required as alleged in the paragraphs of the declaration, oU but it cannot be taken to mean that the resolution of 1925 had immediately imposed a special tax and that such tax was thereupon exigible from Mr. Wright, or that it implied from that moment a privilege on his properties.
resolutions are there and it would not be open to one or the other party to make an admission having the effect of changing the text of them. They must be envisaged according to their tenor and applied in the sense in which they were adopted.
To act otherwise would be to permit the parties, or their counsel, to make admissions on the law.
Now, it is a well recognized principle that admissions of a party can only bear on the facts and that no court can be bound by admissions on the law which the parties might pretend to make.
(See Demolombe, vol. 30, no.
450; Aubry and Rau, vol. 8, p. 167, sec. 751; Pothier,
Obligations, no. 831; Langelier, La Preuve en Matibres
Civiles et Commerciales, p. 12, art. 25).
It would really be inadmissible that, after all I have said on the way the resolution of 1925 was drafted, and even more particularly after the judgment of this Court in the St. Adelphe case (1), this Court would now be called upon to declare that, on account of an admission made by one of the parties and as a result of the expression of his opinion on a question of law, as well as on the legal meaning of the resolutions which we have had. to examine in this case, these resolutions have a juridical purport different from that which results from their very text and contrary to the interpretation that this Court has given in its judgment in the St. Adelphe case (1).
We cannot ascribe to the admissions in question the meaning which the respondents wish us to give to them;
and, even if we arrived at the conclusion that such would really be the meaning intended, such an opinion on the legal interpretation to be given to the resolutions which form the basis of the present case could never bind the
Court, nor compel it to adopt a juridical conclusion contrary to the Court's own opinion.
The only remaining point about which I think it advisable to make mention is the contention of the respondents' counsel that, even if the privilege comes into existence only after the collection roll is in force, such privilege should then be related back to the date of the original resolution. Whatever may be said on that contention so far as it may apply to the personal obligation, I would say, with due respect, that, so far as the privilege or hypothecary claim is concerned, it is nothing less than legal heresy.
By its very nature, a privilege or hypothec can have effect only from the moment it is created and there can be no relation back. The very idea is repugnant to the notion of privilege or hypothec as understood under the Civil Law of Quebec. Let us just think what it would mean in the present case, where the initial resolution was adopted on the 19th of August, 1925, and the collection roll fixing the amount intended to affect the property came into force only sometime after the 26th of November, 1940.
It would mean that what, I suppose, might be called a "potential" hypothec was hanging in the air, like a sword of Damocles, over the property, during that period of fifteen years, and with the possibility that the special tax might never be imposed. That would mean that for the whole period of the twentyfive years the property might be looked upon as suscep- 'tible, at a certain time, to becoming affected by a privilege which would date back to the year 1925. No hypothee of that nature or of that character is known under the Quebec system of law.
For all the above reasons, I am of the opinion that the appeal should be allowed, the judgment of the Court of King's Bench (Appeal Side) reversed, and the hypothecary action of the respondents dismissed with costs throughout.
However, in view of the conclusions reached by some members of the Court, it follows that the appeal is allowed in part as to the amount.
HUDSON J.-This action is brought to enforce payment of taxes levied by the respondent corporation for the years 1938-40 against land acquired by the appellants in The taxes in question are not ordinary school rates but special taxes levied to pay the annual interest and sinking-fund charges upon bonds issued by the respon- TOWN OF dents under the authority of a resolution passed in 1925. The relevant provisions of this resolution are as follows: Hudson J. To provide for the annual interest and sinking fund of these debentures, a special tax, sufficient for the payment of interest and sinking fund, as hereinafter provided, shall be levied annually upon all taxable property on the collection roll of the school trustees of this municipality at present in force, and on the said school trustees proportion of all taxable property belonging to incorporated companies, and on any other taxable property that may come under the control of the said school trustees during the term of these debentures; and all lands subject to the said tax now entered on the said rolls, together with the buildings and improvements thereon made or erected or which may be made or erected thereon during the term of these debentures, shall be bound and liable for the said special tax, until the full and final payment and discharge of the said debt.
To provide for the payment of these debentures when due, a sinking fund shall be provided in which shall be deposited each year and shall remain deposited with aecrued interest during the term of these debentures, an amount of 2A per cent. of -the amount of debentures sold. The lands on which the taxes have been levied were admittedly on the collection roll referred to in this resolution and as such became and remained liable for the special tax until they were acquired by the appellants. It is now claimed that such lands are exempt under section 251 (3) of The Education Act of Quebec which reads as follows:
The following properties shall be exempt from the payment of school assessment:
3. Property belonging to or gratuitously occupied by fabriques, or religious, charitable, or educational institutions or corporations legally constituted, for 'the purposes for which they have been established, and not held by them for purposes of revenue.
It will be observed that subsection 3 covers a large group of institutions and corporations who may be nonsectarian, catholic or protestant, as the case may be. It is admitted by the respondents that the appellants fall within the exempted class, but denied that the exemption thereby given extends to charges imposed on such lands prior to acquisition by the appellants.
The language of the resolution is clear and definite. The lands are
The charge operates from the time the bonds are sold until they are finally paid in full. The language of the resolution sets forth the expressed will of all concerned at the time it was passed and the time the bonds were issued. It was the will of the respondent corporation, of all of the property owners then affected, of the Lieutenant- Governor in Council of the province and the governmental officials who approved of the resolution. The purchasers of the bonds no doubt relied on what was stated and subsequent purchasers took with implied or express notice of its terms.
Any withdrawal of property from the taxable area so defined would throw on the remaining properties a greater burden than was assumed by the owners when they approved of the resolution.
It would deprive the bondholders of security assured to them when they bought the bonds.
Under these circumstances the Court would not, in my opinion, be justified in refusing to give effect to the resolution unless compelled to do so by clear and definite statutory mandate.
The Education Act of Quebec imposes on school commissioners and school trustees a duty to acquire land and build necessary school buildings. If they have funds in hand there is no need for any authorization from the Lieutenant-Governor in Council. If, however, it is necessary to borrow, then it is provided by section 242:
It is not suggested in the present case that there was any failure to observe the provisions of this section, but the appellant relies strongly on the provisions of section 244 (1) which is as follows:
The plain object of this section was to prevent longterm borrowing without taxing provisions adequate to ensure payment of interest, and retirement of the debt at maturity.
The prohibition against the issue of bonds ceased to have any application here once the resolution had been approved and the bonds certified, as they were, under section 246.
When sold they created a legal obligation.
Section 244 (1) does not in terms create the right to tax, nor does it forbid the imposition of a tax. It recognizes an existing right and imposes a duty to levy an annual tax.
I do not find elsewhere any prohibition against binding land for the payment of future taxes in the case of the issue of bonds.
The argument is that the words in the section "there be imposed" mean an immediate imposition.
Now when a tax is "imposed" must in large measure depend upon the language, the context and circumstances of each case.
The City of Ottawa v.' The Canadian National Railways (1).
The imposition here intended cannot be the immediate fixing of a definite amount chargeable to each parcel of land in each year. This is apparent from subsection 3 of section 244 which reads as follows:
The amount to be assessed in respect of each property must be apportioned each year. Over a period of thirty years there almost certainly will be substantial changes in the relative value of individual properties, and possibly T
"
some in the total assessed value of a taxable district. The only item that can be fixed at once and for all is the total amount to be paid each year for interest and sinking- TRUTE fund.
In the present instance that amount was fixed when the bonds were sold.
Thereafter, it was a mere matter of calculation, the rate of interest and sinking-fund Hudson J. being fixed by the bond.
The total amount to be paid by all properties thus ascertained is the subject of the imposition, and that I think is what was intended to be done by the words of the resolution. To again repeat:
and all lands subject to the said tax now entered on the said rolls, together with the buildings and improvements thereon made or erected or which may be made or erected thereon during the term of these debentures, shall be bound and liable for the said special tax, until the full and final payment and discharge of the said debt.
The lands included in this general description are in the words of the section "held for the payment of the bonds". This surely implies an immediate and continuing imposition until the bonds are retired.
What remained to be done before collection was elsewhere provided for in The Education Act. The old maxim "certum est quod certum reddi potest" has some application.
The provisions of the resolution were deemed to be adequate for the purposes of section 244. They were approved as such by the Lieutenant-Governor in Council on the advice of the Superintendent of Education, the Minister of Municipal Affairs and the Attorney-General of the province. The approval was given by order in council in the following language:
L'honorable Ministre des Affaires Municipales, dans un rapport en date du 27 octobre, (1925) expose: que le surintendant de 1'instruction publique, par une lettre en date du 8 courant, recommande que lea Syndics d'6coles protestantes de Ja municipalit6 scolaire de la ville d'Aylmer, comt6 de Hull, soient autorisis A contracter un emprunt de $25,000 pour 30 ans, A un taux d'intrat n'exc6dant pas 5 pour cent, pour payer le cofit de la reconstruction d'un "high school", ricemment d~truit par un incendie, et ce conform6ment b une r6solution desdits syndics, adoptie b leur s6ance du 19 aofit 1925:
Que toutes les formalitis prescrites par la loi ont t6 accomplies. Vu le rapport du procureur g~ndral en date du octobre 1925. En cons6quence, I'honorable Ministre recommande que ladite autorisation soit accord6e, conform6ment aux dispositions de larticle 2728 de la loi scolaire.
This was done in pursuance of section 246 of The Education Act which is as follows:
The resolution and order in council were then registered in the Registry Office at Hull and the debentures issued and sold.
The purchasers of bonds were entitled to accept the certificates as conclusive. . No action was ever taken by a property owner to question the validity of the resolution or of the tax imposed thereunder, except in one single instance where it was questioned by the Honourable Louis Cousineau. He acquired some property within the area and contended that as a Roman Catholic his property was not subject to this special tax. The court there upheld the contention of the present respondents and sustained the action for reasons which were approved of by the Court of King's Bench in the present case. The Cousineau case is reported (1) and it is interesting to observe that it was decided early in the year 1937, the year appellants purchased the land in question.
The appellants' auteur, Wright, assumed as a charge against the land his proportionate share of the obligation created by the bond issue and the resolution was registered in the proper Registry Office in the year 1925, pursuant to section 5889 R.S.Q. 1909.
So the appellants themselves have no right to complain of a lack of notice.
It is true that no action would lie to enforce payment until the levy had been made by the Secretary-Treasurer in each year under subsection 3 of section 244 and the proportionate amount payable in respect of each property definitely ascertained.
But if we are to give effect to the plain meaning of the Words of the resolution, my opinion is that the levy must be made in the words of subsection 3 "upon the taxable RgDEMPTEUR immoveable property liable for the payment", which in this case is the property named in the resolution and held for the payment of the debt under subsection 1. The levy TowN here is merely the maturing of the tax obligation imposed by the original resolution.
H
With great respect to the other members of the Court who take a different view, I do not think that this conclusion is in conflict with the principle of the decision of this Court in the case of Les Commissaires d'Ecoles de St. Adelphe v. Charest (1).
In that case, there was no definite imposition but rather a promise to do so in the future. Here there was an immediate burden imposed to be satisfied in a definite way. Moreover, there was not in that case an issue and sale of bonds approved of by the Lieutenant- Governor in Council.
It is difficult to reconcile several of the provisions of the statute and it seems to me it is a case where the court should keep in mind the general rules of good sense stated in Maxwell on Statutes, 8th Ed. p. 48:
The words of a statute, when there is a doubt about their meaning, are to be understood in the sense in which they best harmonize with the object of the enactment and the object which the Legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained.
There is a similar statement at p. 202.
In the court below the learned judges were unanimous in holding:
Consid6rant que les lots de terre dont il s'agit en cette cause 6taient partie de ceux d6tenus et poss6d6s par des Protestants dissidents sous la juridiction des demandeurs-appelants, lors de la r6solution de ces derniers en date du aofit 1925 les imposant comme garantie du remboursement de 1'emprunt de la somme de vingt-cinq mille dollars y mentionn6s et les affectant au privilfges auquel la loi a pourvu pour ce remboursement;
Consid6rant que cette r6solution mame, et non pas seulement les r6les de perception qui devaient en r6sulter, a fait naitre et cr66 ce privilfge auquel ii est en loi pourvu que la garantie du remboursement de tout tel emprunt, de telle sorte que tous les immeubles alors d6tenus par des Protestants dans les limites de la juridiction des demandeurs- S.C.R. 391.
With this holding I am in substantial agreement except as to the privilege of the bondholders for the reasons above stated.
I also agree with the court below in holding:
The rights and obligations contemplated by section 244 are sui generis and not in my opinion subject to the other provisions of the Act which may appear to be in conflict therewith. The section provides for the immediate creation of an' obligation operating in a defined area to be satisfied in the future. The resolution gives all the rights and creates all the liabilities contemplated by the section and, in my opinion, the appellants took the land subject thereto and are not entitled to the preference which they claim over other properties in the area.
It appears from the record that after the appellants acquired the property they erected thereon a building valued at some $500,000 and the tax for the final year in question is based on that addition to value.
The appellants contend that even if the land was subject to the tax, the buildings were not. The Court of King's Bench did not accept this view and supported their opinion by a wealth of authority as well as by reference to article 2017 of the Code of Civil Procedure.
Recently, in the important case of City of Vancouver v. Attorney-General of Canada et al. (1) this Court insisted on the unity of the buildings and land where the Crown in the right of the Dominion claimed exemption from municipal taxes in a case where the buildings forming the basis of an increase in taxation were clearly the property of the Crown.
A departure from this general rule could be upheld only - where clearly authorized by statute and I have not been DlU al ofn
T able to find any such authorization.
On the evidence before the Court, it appears that the officers of the respondents must have taken into account in arriving at their figure for the final year in question something which was not authorized.
At the trial it was Hudson J.' formally admitted:
Defendant admits, however, that plaintiffs took the necessary steps to impose said taxes, if plaintiffs were entitled to do so, and in particular that the resolution and other proceedings mentioned in paragraphs 2, 3, 6, 7, 8, 9, 13 and 14 of the declaration were enacted and passed as alleged in said paragraphs.
There is no evidence before the Court sufficient to make any correction in the amount. However, I think it should be corrected by agreement, if possible; if not, by reference.
Subject to this, I would dismiss the appeal with costs.
TASCHEREAU J.-En 1925, lorsque l'une de leurs 6coles fut d6truite par un incendie, A Aylmer, dans la province de Quebec, les syndics d'6cole de cette municipalit6 d6cidbrent de la reconstruire, et h cette fin, empruntirent $25,000.00. Une r6solution fut alors adoptie, dont les parties essentielles se lisent ainsi: - That, therefore, the said trustees do petition His Honour the Lieutenant-Governor of Quebec to grant authorization to the school trustees for the Municipality of the Town of Aylmer to borrow the said sum of $25,000 for the purpose above mentioned, said amount to be secured by an issue of debentures, payable thirty years from the first day of September 1925.
Such debentures shall bear interest at the rate of 59o per annum, payable half yearly on the first day of March and September in each year.
The said debentures shall be of the denomination of
500 each and to each debenture shall be attached coupons for the amount of each payment of interest to be payable each half year as provided. The said debentures and coupons to be made payable at the Royal Bank of Canada in Aylmer, Que.
To provide for the annual interest and sinking-fund of these debentures a special tax, sufficient for the payment of interest and sinking-fund, as hereinafter provided, shall be levied annually upon all taxable property on the valuation roll of the school trustees of this Municipality at present in force, and on the said school trustees' proportion of all taxable property belonging to incorporated companies, and any other taxable property that may come under the control of the said school trustees during the term of these debentures; and all lands subject to the said tax now entered on the said rolls, together with the buildings and 2'0o A cette 6poque, un nomm6 R. H. Wright, protestant dissident, 6tait propri6taire de certains immeubles 6valu6s en 1926 A $46,612. 00, et la taxe sp6ciale qu'il lui fallait payer pour rencontrer les int6rits et le fonds d'amortissement, s'61evait h $69.92.
En 1937, I'appelante, la Congr6gation du Trbs St-Redempteur, une corporation religieuse catholique, se porta acqi6reur des immeubles Wright pour la somme de $22,925. 00, et en 1940, elle construisit un 6difice dont la valeur, admise par les parties, s'61evait h au delh de $500,000. 00.
C'est ce qui explique que 1'6valuation des propri6t6s occup6es par I'appelante, qui n'4tait que de $29,658.00 en 1939 et 1940, fut port6e h $512,258.00 en Le litige qui est soumis h la Cour remonte h 1941, date oi les intim6s ont institud contre 1'appelante une action hypoth6caire au montant de $1,016. 00, par laquelle ils r6clament les cotisations pour les ann6es 1939, 1940 et 1941. L'appelante a contest6 cette action qui a 6t6 rejet6e par la Cour Sup6rieure, mais unanimement maintenue par la Cour du Banc du Roi.
C'est de ce dernier jugement que la Congregation du Tris St-R6dempteur appelle devant cette Cour, et la question que nous avons h decider est de savoir si les immeubles de 1'appelante, corporation religieuse catholique, sont assujettis au paiement des taxes imposies par les intim6s, pour difrayer le cofit de la construction de cette 6cole protestante.
Evidemment, la difficult6 ne se pr6senterait pas, si 1'appelante eut 6t6 propriftaire des immeubles h 1'6poque oii la rdsolution a 6t6 adopt6e. Par les termes mimes de son acte d'incorporation, elle b6n6ficie de 1'exemption accord6e, par Particle 251 du code scolaire, h toutes les corporations religieuses et 6ducationnelles qui possident des immeubles, non pour en retirer un revenu, mais pour atteindre les fins qu'elles se proposent. Dans cette hypothbse, toute tentative des intim6s, pour faire d6clarer que les ~
'peat ot~e~
Ts immeubles de 1appelante sont grevis de charges privilegiees en garantie du remboursement de I'emprunt, eut 6t6 facilement repouss6e.
Cette cause pr6sente de s6rieuses difficult6s, et cette Cour a mime ordonner une r6-audition afin d'obtenir des 6claircissements suppl6mentaires.
Elle se resume maintenant, T a je crois, a quelques points essentiels, dont la solution me parait suffisante pour d6terminer les droits respectifs des parties.
Les corporations scolaires sont autoris6es par la loi h effectuer des emprunts au moyen d'6missions de d6bentures, mais elles doivent n6cessairement se conformer h certaines prescriptions imp6ratives de la loi. Ainsi, l'article 244 du code scolaire est ridig6 dans les termes suivants: - Les mots " moins qu'il ne soit imposg par la resolution qui les autorise" sont interpr6ts par les parties de fagon diff6rente.
Les intim6s soutiennent que dis l'origine, lors de la passation de la r6solution en 1925, les immeubles ont 6t6 impos6s et grev6s d'un privilige qui doit subsister jusqu'A l'extinction totale de la dette, quelles que soient les mutations qui aient pu avoir lieu. L'appelant dit, au contraire, qu'il n'y a pas de charge hypoth6caire ou privil6gi6e dbs l'origine, mais que cette charge ne prend naissance au b6n6fice des intim6s annuellement, qu'aux dates est confectionn6 le r8le de perception. On a aussi discut6 afin de savoir qui, dans le cas qui nous occupe, est le d6biteur personnel de la taxe. Est-ce Wright, le propri6taire originaire, ou les appelants qui dans la suite ont acquis sa propri6t6? II est n6cessaire en premier lieu de bien d6terminer ce qui constitue 1'imposition d'une taxe scolaire, et quelles sont les formalit6s qu'il faut observer pour qu'eile soit en force et cr6e une dette que le contribuable aura l'obligation de payer.
Seule une resolution n'est pas suffisante.
II faut en outre que le secr6taire-tr6sorier fasse, chaque ann6e, un r8le special de perception, r6partissant sur les biens imposables, affect6s au paiement des obligations, le montant de la taxe impos6e sur chacun d'eux, pour l'intirft et le paiement annuel du fonds d'amortissement.
C'est le paragraphe 3 de Particle 244 du code scolaire qui impose cette obligation, et ce devoir doit 6tre rempli tant que l'emprunt n'est pas totalement pay6.
La r6solution qui n'est pas suivie de la confection d'un r8le de perception ne fait pas mime naitre
1'obligation de payer la taxe. Elle ne fait que " mettre la taxe en marche ", que cr6er une taxe " en puissance ", qui ne sera compl6t6e que lorsque, les d6lais 6tant expir6s, le r6le deviendra en vigueur. Avant que cette double op6ration ne se soit produite, la taxe n'est v6ritablement pas impos6e;
le contribuable ne connait pas le montant qu'il doit; il n'est pas mime le d6biteur personnel de la Commission
Scolaire.
(Canadian Allis-Chalmers Limited v. The City of Lachine (1)).
Il ne faudrait pas confondre 1'imposition d'une taxe annuelle, avec la cotisation impos6e en vertu de 1'article
265 du code scolaire. Au contraire de la taxe annuelle, cette cotisation, dans les cas la loi l'autorise, est impos6e dbs l'origine pour la totalit6 du montant, et est payable par annuit6s pour un espace de temps qui ne doit pas exc6der cinq ann6es.
C'est donc par 1'effet combin6 de la r6solution et du rle de perception que la taxe existe, et quand l'une ou l'autre de ces formalit6s essentielles ne se rencontre pas, alors le contribuable n'a pas l'obligation de payer et son immeuble ne peut 6tre affect6 d'aucun privilige.
En supposant mime et nous examinerons cet aspect de la question plus tard que la resolution f fit l6galement adopt6e, je suis bien d'opinion que le privilige n'a pas exist6 au b6n6fice des intim6s h cette date de 1925, lorsque la r6solution a 6t6 adopt6e par les syndics. Il me semble en effet inadmissible qu'une charge quelconque ait pu grever cet immeuble avant mime que la dette ne soit cr66e, alors que cette taxe, comme nous l'avons vu pr6c6demment, n'6tait qu'en formation, et qu'aucune r6clamation n'existait contre le d~biteur personnel. Une taxe n'affecte une propri6t6 immobilibre que lorsque le r8le de perception est fait, et qu'il est homologu6, selon le cas, par les commissaires ou les syndics d'6coles.
On a soutenu que dans la cause de La Communaut6 des Saeurs des Saints Noms de Jjsus et Marie v. The Corporation of the Village of Waterloo (1), il a 6t6 d6cid6 que dis 1'origine, A la date la r6solution est pass6e, la propri6t6 est grev6e pour la totalit6 du montant. En effet, dans cette cause, il semble avoir 6t6 d6cid6 que les taxes imposees en vertu d'un riglement municipal, pour pourvoir au paiement des int6r~ts et h la cr6ation d'un fonds d'amortissement pour le rachat de d6bentures, constituent une hypothique affectant toute la propri6t6 immobilibre de la municipalit6 sujette A la taxe, & la date oit ce r6glement est adopt6 et 1'hypothique continuerait ainsi h affecter tout immeuble, mime quand i1 passe A un acqu6reur entre les mains de -qui il aurait 6t6 exempt de taxation, si ce dernier en avait 6t6 propridtaire h la date le r6glement a 6t adopt6. Et mime, M. le juge Buchanan disait ceci: - Mais, cette cause n'a jamais 6t6 suivie et la cour d'appel (Les Eccl6siastiques du S6minaire de St-Sulpice de Montr6al v. Masson, (2)) a affirm6 le principe que la charge hypoth6caire ne prend naissance que lorsque le r8le de perception est en force, et A la page 582, la Cour dit ce qui suit: - A Et pour ne citer que cette autre cause de la cour d'appel (Surprenant v. Brault (3)), M. le juge Tellier s'exprime de la fagon suivante: - La taxe scolaire ne devient une charge portant hypothbque que si le contribuable fait d6faut de la payer. IA ne peut 6tre en d6faut que du jour de '6ch6ance de ]a taxe. Ceda me parait indiscutable en prksence du
TIrN Etexte de 1a loi. Or, il ne suffit pas que le r6le de perception soit fait pour Tats que la taxe soit exigible ou mgme due. La loi requiert bien d'autres formalitis avant I'entr6e en vigueur du r81e.
En r6sum6, le r6le de perception fait par le secritaire-trsorier n'est rien qu'un projet et, partant, ne cr6e pas de dette, tant qu'il n'a pas et6
OF homologu6 par les commissaires d'6coles.
Ce n'est que par I'homologation qu'il entre en vigueur et qu'il produit son effet.
Jusque-dh, il pourrait 6tre compar6 A, un bill d6pos6 devant le Parlement, mais nonTaschereau J. encore revitu de la sanction d6finitive.
A partir de 'homologation, ]a taxe est due; le contribuable doit I'acquitter dans un dilai de vingt jours. S'il ne le fait pas, il est en d6faut; et de ce moment-1h, la taxe devient une charge sp6ciale portant hypothbque sur 1'immeuble impos6.
Il est vrai que dans cette cause, il s'agissait de la taxe ordinaire impos6e annuellement pour le maintien des 6coles, en vertu des dispositions de 1'article 249 du code scolaire, mais ce jugement d~montre bien que la simple rdsolution ne fait pas naitre de charge privil6gi6e dis la date de sa passation. D'ailleurs, la cause de Waterloo (1) que nous avons cit6e pr6c6demment est aussi en contradiction avec un jugement de cette Cour (La Banque Ville-Marie v.
Morrison (2)), oil Sir Elz6ar Taschereau s'exprimait de la fagon suivante: - L'appelante voudrait faire remonter la taxe en question jusqu'h la rdsolution du conseil de ville de 1867. C'est par cette r6solution, dit-elle, que cette propridt6 a t6 taxie, pour le cost de I'largissement de Ia rue
St-Jacques.
Mais cette pritention n'a pas 4 accueillie par le jugement a quo, et ne pouvait 1'8tre.
C'est de la part de l'appelante, soutenir que si son achat efit eu lieu, au lendemain mime de cette r6solution, et dis avant toute autre proc6dure, la garantie de 1'intim6e se serait 6tendue A, cette taxe.
Or cette proposition est erron6e. Un immeuble n'est tax6 en pareil cas, et ]a corporation n'y a aucun droit que pour la r6partition qui 6tablit le privi- 46ge, et non seulement son montant.
Ou, en d'autres termes, il n'y a pas de privilIge, il n'y a pas de taxes, tant que le r8le n'en a pas fix6 le montant. La corporation n'a pas de cr6ance contre qui que ce soit, avant ia r6partition.
C'est dans ce r8le et son homologation, qu'est 4e d6cret, qui, pour la premibre fois, affecte sp6cialement chacun des immeubles imposables. Et comment 'intim6e aurait-elle pu payer une taxe dont le montant n'6tait pas 6tabli, ou payer avant que la taxe fHt due, payer sans cause, sans dette?
est bien vrai que la r6solution du conseil de ville a, d~s 1867, d6crt que les travaux requis pour 1'61argissement de la rue St-Jacques
(1) (1887) M-L.R. 4 Q.B. 20.
(2) (1895) 25 Can. S.C.R. 289, at 295.
Les procureurs des intim6s nous ont cit6 la cause de Canadian Allis-Chalmers Limited v. The City of Lachine Cette cause ne peut servir de pr6cident, car elle a 6t6 jug6e sur des faits entibrement diffdrents. La Canadian Allis-Chalmers Limited b6n6ficiait d'une exemption de taxe lui avait t6 accord6e jusqu'au ler septembre 1927. Un rbglement de la cit6 de Lachine imposant une taxe, est entr6 en vigueur le 27 aofit 1927, et le r8le de perception fut compl6t6 et d6pos6 au bureau du secr6taire-tr6sorier de la cit6, et avis en fut donn6 le 10 septembre 1927. Le riglement de la cit6 de Lachine est done entr6 en vigueur le 27 aofit, avant l'expiration de la piriode fix6e pour 1'exemption de la taxe, mais le r8le de perception n'a 6t6 publi6 que le 10 septembre, et la taxe n'est devenue exigible que le 30 septembre 1927.
Le riglement cependant, disait
Cette cour en est venue A la conclusion que le r6glement imposant la taxe ne frappait pas les immeubles de la compagnie parce que l'exemption de la compagnie Canadian Allis-Chalmers Limited, dont ses immeubles b6nificiaient, 6tait encore en force. Ces m~mes immeubles n'6taient pas imposables parce qu'h la date le rbglement a t6 pass6 ils n'apparaissaient pas au r8le.
Ceux-l seuls qui 6taient port6s au r8le en vigueur h cette date pouvaient 6tre imposes, d'apris les termes mimes du riglement. C'est la port6e de la d6cision dans cette cause de Canadian Allis- Chalmers Limited v. The City of Lachine (1), et comme on peut le voir, elle ne peut servir h d6terminer le litige qui nous est actuellement soumis.
La v6ritable solution ne peut 6tre, je crois, que la suivante: Quand la r6solution qui, en vertu de Particle 244 du code scolaire, doit 6tre pass6e pour autoriser l'emprunt, " et imposer une taxe annuelle suffisante pour payer 'intr~t de chaque ann6e ", les immeubles des propri6taires soumis A la juridiction des syndics et apparaissant au r8le d'6valuation, sont dis lors choisis, d6termin6s d'avance, comnme devant plus tard 6tre affect6s d'une taxe annuelle, h laquelle ils ne pourront pas 6tre soustraits, mime s'ils deviennent la propriit6 d'une autre personne; mais la taxe n'existe pas encore; et elle n'existera que quand sera fait et homologud le r8le de perception annuel. Admettre que l'immeuble est d6ji grev6 pour la totalit6 de 1'hypoth~que depuis la date la r6solution est pass6e serait contredireTaschereau J. I'6conomie de notre loi, qui veut que la taxe n'existe que par l'effet combin6 de la r6solution et du r8le de perception;
et, d'un autre c~t6, soutenir que 1'immeuble n'est pas, d~s la date la r6solution est passie, affect6 en puissance d'une charge flottante qui se fixera d6finitivement lors de la passation du r8le de perception, serait enlever toute signification au mot " impos6 ".
Voilh pour la nature de la taxe et pour le sens qu'il faut, je crois, donner au mot " impos6
Quant h la responsabilit6 personnelle, il ne fait pas de doute que, d~s l'origine, elle est attachie au propridtaire de l'immeuble.
Celui-ci a cette obligation personnelle, parce qu'il est soumis h la juridiction des syndics ou des commissaires, selon le cas. Et son immeuble est imposable parce qu'il est sa propri6t6, et c'est cet immeuble, par le montant qui apparait au r8le d'6valuation, qui determine
1'6tendue de cette responsabilit6 personnelle.
Deux ments doivent donc n6cessairement se rencontrer: la juridiction des syndics sur la personne, et la n6cessit6 pour cette personne soumise h cette juridiction d'6tre proprietaire d'un immeuble.
est donc vrai de dire, comme l'affirmait M. le juge
Barclay dans la cause de McKesson & Robbins Ltd. v. Biermans (1) que Wright a 6t6 tax6 "in respect of his property and in proportion to his right ". Le m~me langage a
6t6 employ6 dans la cause de Brett v. Rogers (2), et dans cette mime cause de McKesson & Robbins Ltd. v. Biermans, qui a 6t6 port6e -devant cette Cour (3), M. le juge Rinfret, comme il 6tait alors, accepte ce principe et dit que Biermans a 6t6 tax6 " because he was the owner of land in the parish on the date of the assessment ". Il approuve 6galement la citation que je viens de donner du jugement de M. ~jg juge Barclay.
II faut de toute n6cessit6 qu'il y ait un d6biteur personnel oblig6 de payer la taxe. On ne peut en effet concevoir l'existence de cette taxe affectant seulement un immeuble sans qu'il y ait une personne qui ait l'obligation l6gale de la payer et contre qui elle peut 6tre l6galement r6clamde. Comme le disait Lord Thankerton dans la cause de Provincial Treasurer of Alberta v. Kerr (1):ne fait pas de doute qu'A I'origine, le propridtaire de 1'immeuble est le d6biteur personnel de la taxe, mais cette responsabilit6 personnelle persiste-t-elle quand le contribuable originairement responsable vend le terrain " in respect of which " il a 6t6 tax6? Dans la cause de McKesson & Robbins Ltd. v. Biermans (2), M. le juge Rinfret se pose la question, mais ne la rdsout pas, et il s'exprime de la fagon suivante, A la page 122: - La question se pose done maintenant, et je crois qu'elle doit 6tre r6solue dans la n6gative. Il me semble impossible, en effet, d'admettre que cette responsabilit6 personnelle du d6biteur originaire, tax6 " in respect of his property " puisse continuer quand il cesse d'6tre propri6taire de l'immeuble.
En vertu des dispositions de la loi, le rle d'6valuation doit mentionner non seulement la valeur de l'immeuble, mais aussi la valeur des ameliorations qui ont 6t6 faites subs6quemment. Si la responsabilit6 personnelle ne disparaissait pas avec la vente de l'immeuble, elle se trouverait A augmenter, cause des am6liorations qui ajoutent h la valeur de cet immeuble. Dans le cas qui nous occupe, on comprendrait facilement la surprise et 1'6tonnement justifi6s de Wright, propri6taire originaire, dont l'immeuble 6tait 6valu6 A $40,000.00 et qui maintenant, sans son consentement et peut-8tre aussi hors sa connaissance, verrait sa responsabilit6 personnelle augment6e, par suite de la nouvelle 6valuation qui se chiffre A au delh de $500,000. 00.
Comme il doit de toute n6cessit6 y avoir un d6biteur personnel, il faut n6cessairement que cette responsabilit6 incombe A i'acqu6reur de l'immeuble quelle que soit sa religion. Et, toujours dans cette mame cause de McKesson
& Robbins Ltd. v. Biermans M. le juge Rinfret dit encore A la page 122: - On invoque l'exemption accordie aux communaut6s religieuses par les articles 251 et 424 du code scolaire, mais les communaut6s religieuses ne b6ndficient de ces exemptions que lorsqu'elles sont propri6taires des immeubles au moment de 1'imposition originaire.
Admettre la pritention contraire nous conduirait A un r6sultat d6sastreux, dont l'aboutissement serait la faillite des commissions scolaires et 1'impossibilit6 pour elles de rencontrer leurs obligations financi~res.
Si les commissaires ou les syndics d'6coles ne pouvaient plus percevoir les taxes qu'ils ont impos6es, quand les immeubles, en premier lieu sujets A cette imposition, deviennent l'objet de mutations qui font qu'ils deviennent
Ia propri6t6 de personnes professant une religion diffrente, alors, la seule source de revenus possible pourrait bien disparaitre en partie ou mime en totalit6, et oii serait la garantie des obligataires?
Pour r6sumer, je suis d'opinion que Wright 6tait personnellement responsable de la taxe qui annuellement a 6t6 imposee, parce qu'il 6tait propri6taire d'un immeuble, mais cette responsabilit6 personnelle a disparu lors de la vente de l'immeuble en question, pour devenir celle des appelants dans la. pr6sente cause, qui ont acquis l'immeuble " in respect of which " la taxe a 6t6 imposee.
En posant ces quelques principes qui, je crois, sont ceux qui doivent nous guider pour d6terminer la pr~sente cause, a l assum6 que la r6solution de 1925 avait 6t6 16galement adoptie, que l'immeuble avait 6t6 affect6, pour employer 1'expression dont je me suis servi pric~demment, d'une charge flottante qui devait d6finitivement se fixer annuellement lors de l'adoption du r8le de perception. Mais, en est-il ainsi, et l'immeuble a-t-il 6t6 v6ritablement, par les J.termes de la resolution passie, affect6 dbs l'origine? Je suis bien d'opinion que le privilige n'a pas exist6 au bin6fice des intim6s h cette date de 1925, lorsque la r6solution a 6t6 adopt6e par les syndics. L'article 244 du code scolaire est ridig6 en des termes non 6quivoques, et stipule qu'aucune 6mission d'obligations ne peut 6tre faite, et aucun emprunt ne peut 6tre contractd, ' moins qu'il ne soit imposg par la rdsolution qui les autorise, sur les biens imposables affect6s au paiement de telles obligations ou de tel emprunt, une taxe annuelle suffisante pour payer l'int6rit de chaque ann6e, et au moins un pour cent du montant de 1'emprunt, h part l'int6rit, pour cr6er un fonds d'amortissement destin6 h 1'extinction de la dette.
Ainsi donc, aucune 6mission d'obligations ne peut 6tre faite A moins qu'une " taxe ne soit impos~e " et cette imposition doit avoir lieu avant que l'emprunt ne soit effectu6. La disposition de la loi est claire. Elle pose une condition essentielle, pr6alable, A laquelle est subordonn6e la vente des obligations.
La 16gislature a voulu avec raison que les commissions scolaires pourvoient d'avance au remboursement des int6r~ts et des fonds d'amortissement, et comme le disait cette cour dans la cause des Commissaires d'Ecoles de St-Adelphe v. Charest et al. (1): - Or la resolution, sur laquelle les intimbs se basent pour pr6tendre qu'un privilige a exist6 dis l'origine sur les immeubles de Wright, n'impose clairement pas de taxe, et les termes mimes employ6s doivent in6vitablement nous conduire h cette conclusion. La r6solution en effet ne dit pas qu'une " taxe est impos6e et sera prilev6e ", mais elle dit seulement " shall be levied ". On n'a fait que manifester une intention de pr6lever une taxe dans l'avenir, sans LA mime qu'elle ne soit impos6e. Dans la cause des Commis- CsIN DU saires d'Ecoles de St-Adelphe v. Charest (1), oii un futur 6tait 6galement employ6 dans la r6daction d'une r6solution, THE cette Cour a 6galement d~cid6:
C'est une erreur de pr6tendre qu'en employant les expressions " sera impos6e et pr61evie ", on a pourvu h ses voies et moyens, et qu'on s'est assur6 une source de revenus pour payer le cofit de l'entreprise.
Taschereau J. En rendant cet arr~t, cette Cour n'a pas cri6 de jurisprudence nouvelle, mais n'a fait que confirmer plusieurs d6cisions rendues pric6demment.
Ainsi, la Cour du Banc du Roi dans cette mame cause des
Commissaires d'Ecoles de St-Adelphe v. Charest (2) disait ce qui suit: - Quand la risolution porte: " I sera impos6 et pr6lev6 par la Commission scolaire une taxe sp6ciale annuelle suffisante sur toutes les proprietis taxables", cette rdsolution viole Particle 244 du code scolaire disposant: " Aucune emission d'obligations ne peut Stre faite et aucun emprunt ne peut 8tre contract6 h. moins qu'il ne soit impos6 par la r6solution qui les autorise* * une taxe annuelle*** La r~solution suadite n'impose pas la taxe;
Et dans la cause de Goulet v. La Corporation de la Paroisse de St-Gervais (3), Sir Mathias Tellier alors juge en chef s'exprimait ainsi: - Ledit riglement statue, pour chaque pont, qu'une taxe sp6cialle sera impos6e et pr6levie sur les biens imposables des contribuables oblig6s audit pont, afin d'en faire le paiement, dans un seul versement, argent comptant.
Le demandeur objecte que, par cette disposition, la taxe ne se trouve pas actuellement impos6e; et ii conclut, en se basant sur
Particle 627a du Code municipad, que le riglement est nul.
Le demandeur a raison, lorsqu'il dit que, par la disposition ci-dessus du riglement, la taxe ne se trouve pas actuellement imposde; mais je crois qu'il a tort de pr~tendre que cela rend le riglement nul. L'article
627a, sur lequel il se base, ne va pas si loin que cela. II frappe de nullit6 tout contrat d'entreprise donn6 par une corporation municipale qui n'a pas pourvu h, ses voies et moyens; mais i1 ne d6clare pas invalide le rfglement lui-mime en ex6cution duquel elie a agi.
On a dit que la jurisprudence que je viens de citer, et en particulier la cause de Charest (1), ne s'applique pas, parce que dans la pr6sente cause, s'il est vrai que le futur est employ6 pour le pr6l~vement de la taxe, il faut pr6sumer l'existence d'une imposition dis 1925, dont le pr6livement
(1) [19441 S.C.R. 391.
(2) Q.R. [19431 K.B. 504.
(3) (1930)
Q.R. 50 K.B. 513.
n'est que la consequence. On signale que, dans les causes qui ont servi h fixer la jurisprudence, le futur 6tait claireetemly ment employ, quant l 'imposition.
Je ne puis admettre cette pr6tention. Il s'agit de taxe, et la loi doit 6tre interprit6e restrictivement, et au bin6fice du contribuable.
A moins que 'immeuble ne soit impos6 T"' d'une fagon raisonnablement claire, il ne doit pas 6tre sujet h la taxe. Ici, non seulement il n'y a pas d'ambiguit6, mais i1 n'y a aucune imposition quelconque.
Il s'ensuit done, des termes mames de la r6solution de 1925 tels qu'interprit6s h la lumibre de la jurisprudence que je viens de citer, que l'immeuble de Wright n'a pas 6t6 impos6 h l'origine et qu'aucune charge ne 1'a affect6. Cet immeuble n'a pas 6t6 h ce moment d6termind d'avance comme devant plus tard 6tre affect6 d'une taxe annuelle par l'effet de la confection d'un r8le de perception.
Cependant, ce d6faut d'imposition ne rend pas nulle la r6solution qui peut .toujours 6tre compl6t6e plus tard, mais il rend illigaux tout contrat donn6 ou tout emprunt effectu6 comme consequence de son adoption (Goulet v. La Corporation de la Paroisse de St-Gervais (1) et Les Commissaires d'Ecoles de St-Adelphe v. Charest et al. (2)). Cette absence d'imposition actuelle lors de la passation de la r6solution de 1925 serait done une omission suffisante pour frapper 1'emprunt d'ill~galit6, car elle constitue clairement une violation des dispositions de Particle 244 du code scolaire. Heureusement, pour pr6venir les inconv6nients auxquels des r6dactions ill6gales de resolutions municipales ou scolaires pourraient donner lieu, la l6gislature a, par Particle 246 du code scolaire, d~crit6 que la validit6 d'une obligation 6mise ne peut 6tre contest6e pour aucune raison, lorsque la resolution qui autorise son emission a 6t6 approuv6e par le Lieutenant-Gouverneur en conseil ou le Ministre des Affaires Municipales, de l'Industrie et du Commerce, et que cette meme obligation porte le sceau et le certificat qu'elle est 6mise conform6ment h la r6solution qui l'a autorisee.
En admettant que les pr~sentes debentures 6mises par les intin6s portent ce certificat de validit6, elles doivent done 6tre consid6ries comme 6mises 16galement.
Mais, cette disposition l6gislative ne cr6e des relations 16gales qu'entre le porteur de la d6benture et la corporation d6bitrice de la dette, et confire au porteur un titre incontestable o qui lui permet de r6clamer des intim6s.
Il n'existe cependant aucun lieu de droit entre le porteur de la d6benture et le contribuable, et l'obligation de ce dernier n'est affect~e en aucune fagon par l'apposition de ce certificat sur la d6benture.
Dans le cas oft la corporation scolaire ferait d6faut de payer les int6rits ou le capital h 6ch6ance, le recours de l'obligataire serait contre la corporation scolaire et nullement contre le contribuable.
L'obligation que peut avoir ce dernier de payer n'existe que vis-h-vis la corporation scolaire, et le droit qu'a le porteur de la d6benture, de percevoir ce qui lui est dfi, ne peut done s'exercer que contre cette dernibre.
La loi, qui valide la d6benture et qui la rend incontestable, n'augmente pas et ne diminue pas la responsabilit6 du contribuable. * Elle n'affecte pas de privilege l'immeuble dont il est propribtaire; elle ne fait que rendre parfait le titre du priteur, qui ne peut 6tre contest6 A cause du certificat dont il est revitu.
Avant d'emprunter par debentures ou autrement, toute corporation scolaire doit se conformer aux dispositions de
'article 242 du code scolaire. Elle doit obtenir i'autorisation des autoritis provinciales, et produire la resolution qui mentionne l'objet, le montant, le terme et le taux de l'emprunt. Evidemment, la seule permission ainsi donnie ne l6galise pas l'ernprunt. Elle accorde 'autorisation n6cessaire, et c'est l'accomplissement d'une condition que la loi impose pour que 1'emprunt devienne possible.
Lorsque les conditions de l'emprunt sont ainsi approuvees, alors, nous dit l'article 246, la d6benture est valid6e et ne peut 6tre contest6e, quand elle porte le sceau du d6partement des Affaires Municipales.
Mais ce sceau, s'il rend incontestable le titre du porteur, ne confire pas A la corporation scolaire vis-A-vis des contribuables plus de droits que ceux que lui donne le code scolaire, ou qui risultent des termes mimes de la r6solution.
C'est l'opinion exprim6e d6jh par M. le juge Tellier, dans la cause de Goyer v. Corporation de la ville de St- Lambert (1).
Dans cette cause, oi 1'approbation d'un riglement, en vertu de la loi 4 Geo. V, chap. 50, rendait valide toute obligation 6mise subsequemment, il a t6 d6cid6 que en est ainsi, je crois, de la cause qui nous est soumise, J.et le certificat de validit6 attachi h la d6benture n'a pas pour effet de changer les termes de la r6solution et d'6tendre son application A des contribuables qui sont autrement hors de son atteinte.
Les intim6s semblent avoir r6alis6 que par 'leur r6solution de 1925 aucune taxe n'a 6t6 impos6e, car chaque ann6e subs6quente ils ont impos6 cette taxe par des r6solutions successives.
Ainsi, en 1938, on adopte la r6solution suivante: - En 1939, on agit de la mime fagon: - En enfin, en 1940, les intim6s passent une dernibre r6solution qui se lit ainsi: - Sauf en 1938, oii on emploie de nouveau le mot " levied on impose clairement la taxe, contrairement h ce qui fut fait en 1925, oii l'on se contentait d'exprimer seulement 1'intention d'en pr6lever une plus tard.
Dans la pr6sente cause, il me semble clair, pour les raisons que je viens d'exposer, que la r6solution de 1925 n'a pas meme mis en mouvement la proc6dure n6cessaire, dont I'aboutissement devait 6tre 1imposition d'une taxe. Elle ne dit pas qu'une taxe est impos6e, et elle ne peut done pas etre jointe aux r8les annuels de perception qui ont 6t6 faits chaque ann6e, pour engendrer une obligation de la part des contribuables.
C'est aux r6solutions pass6es en 1938, 1939 et 1940, qu'il faut se rapporter pour 6tablir la source la plus recul6e de la taxe annuellement impos6e, et c'est A ces r6solutions qu'il faut joindre les r6les de perception faits durant les m~mes annies, pour trouver l'autorit6 que peuvent avoir les intims de percevoir quoi que ce soit de la corporation appe- ^ oA lante.
La r6solution qui impose, et le r8le de perception qui complkte, sont tous deux soit de 1938, de 1939 ou de 1940, au moment oii, par les dispositions m6mes de la loi, les immeubles de l'appelante ne peuvent pas 6tre impos6s. Pour ces raisons, je suis d'opinion que le pr6sent appel doit 6tre maintenu avec d~pens de toutes les cours, et que les conclusions du jugement rendu par la Cour Sup6rieure doivent 6tre r6tablies.
Je m'accorde avec le Juge en Chef quant h la r6daction du jugement formel.
J.-This appeal concerns a question of the taxability, for annual assessments of interest and sinking-fund increments, on bonds issued by a Protestant minority school corporation, of land which, at the time of the passing of the resolution providing for the issue, owned by a Protestant, was subsequently sold to a Roman Catholic institution, by the school law exempt from taxes as to all property occupied by it for religious purposes.
hands of the vendor, the land was assessed for approximately $25,000.
After the purchase, the institution constructed buildings at a cost of over half a million dollars. The Court of King's Bench for Quebec, reversing the Superior Court, has maintained the taxation on the basis of the full value of the land and the improvements; and the institution appeals to this court. The question, though of narrow compass, presents considerable difficulty in the interpretation of certain provisions of The Education Act of the province.
The scheme of the Act sets up throughout the province school municipalities. The initial government of a municipality is by school commissioners, who are constituted a corporation.
Provision is made for the withdrawal of persons of a minority faith, called dissentients, who may organize their own school administration under the direction of school trustees. The power to tax for the municipality is distributed between these two bodies, and although the lnug fs
T language of section 310 is that the
RDEMPTEUR trustees of dissentient schools shall alone have the right to impose and THE collect the taxes to be levied upon the dissentient inhabitants,
I take it to limit also the jurisdiction of trustees.
Section 244 prescribes the conditions under which bonds Rand J.
may be issued or loans contracted, and its language is important:
244. (1) No issue of bonds may be made, nor loan contracted, unless, by the resolution authorizing the same, there be imposed, upon the taxable property held for the payment of such bonds or such loan, an annual .tax sufficient for the payment of the interest each year, and at least one per cent. of the amount of the loan, besides the interest, to create a sinking-fund for the extinction of the debt.
(3) It shall be the duty of the secretary-treasurer to make, every year until the payment of the loan or the redemption of the bonds, a special collection roll, apportioning, upon the taxable immovable property liable for the payment of such loan or such bonds, the amount of the tax imposed on each one for the payment of the interest and the annual payment into the sinking-fund.
Then there are general provisions for taxation:
249. The school commissioners and trustees shall cause to be levied by taxation the taxes necessary for the support of the schools under their control.
The rates of school assessments shall be uniform upon all taxable property in the school municipality. The assessment shall be based upon the valuation of such taxable property, and shall be payable by the owner. If not paid, such assessment shall be a special hypothecary charge upon such property, not requiring registration. R.S. (1909), 2730, 2731.
388. School assessments and monthly fees shall be imposed by all school corporations, between the first day of July and the first day of September in each year.
The imposition of such taxes shall not, however, be considered null if made after the delay fixed. R.S.
After the imposition of the taxes, the secretary-treasurer shall, without delay, make a collection roll.
He shall also make a special collection roll whenever a speciil assessment has been imposed after the making of the general collection roll, or whenever ordered so to do by the school board.
R.S. (1909), 2858. The word " imposed " appears to be used consistently to designate a formal act of the commissioners or trustees by which their taxing power is exercised and, under subsection (1) of section 244, an annual tax for future years, subject to sub-section (3), created. The language of subsection (1), " Unless there is imposed an annual tax," taken with that of sub-section (3), lands itself to two possible conceptions: one, that the tax is a commitment in gross for an ascertained total sum in relation to the entire body of taxable property within the jurisdiction of the trustees as one whole; the other, that it is specific as to amount in relation to each immovable. In the former, the school board binds itself to levy a certain sum by taxes in each of a number of years. This leaves uncertain the property and its valuation. These may be fixed as of the date of the resolution or as each year arrives; or the property may be that taxable at the date of the resolution and the valuation as of the year of levy, or vice versa. But this view attributes a signification to the word " tax " which the ordinary meaning does not support. I do not see how the quoted language can be satisfied in the sense of " tax " except by the second of the alternatives but with the qualification that the tax is potential only until the year is reached for which it is intended. I do not think we can speak accurately of a tax " in gross," nor that a tax can be imposed which is not specific and referrable to its precise subject-matter.
The word " apportioning " in sub-section (3) does, in one sense, appear appropriate to an amount-though not a tax-" in gross " to be spread each year over the various parcels, on the basis of the valuations for that year. But the difficulty of that construction-apart from the language of sub-section (1)-arises from the words, " the amount of the tax imposed on each one."
The " apportioning " is upon the taxable immovable property " liable for the payment of such loan or such bonds" which I take to be the property mentioned in sub-section (1) as " held for the payment of such bonds "; but what is apportioned is the "amount of the tax imposed on each one", meaning each separate immovable.
The " imposition " is made only under sub-section (1), and sub-section (3), therefore, assumes the effect of sub-section (1) to be to raise a specific potential tax on each parcel. If that is the case, then the second conception accords with both sub-sections.
After the best consideration I can give to it, I take the language of the section to mean that an " annual tax annual in relation to the years of the term, for instance, a bond issue-carrying implicitly the characteristic of a specific amount in relation to each separate parcel of land, is declared; and that it is en marche to become definitive as a realizable exaction as each year is reached, and as it is extended on a collection roll. It is as if the resolution in 1925 were in the words: we now impose a tax of $30 on property "A" for the year 1940, and as if it were repeated in An annual resolution is passed in advance: it prescribes a taxing effect to be attained in future.
But the declaration of a potential tax in a certain amount in respect of each taxable immovable for each year during the currency of the obligation, as a specific imposition, can be made only by reference to the valuation or assessment roll, at the time of the resolution, in force. When the tax becomes levied in each year as the collection roll is completed, the time of payment is determined, but whether there is determined also personal liability for each year's tax, we do not need to enquire. The resolution, then, fixes as of its date the amount of the annual levy, the lands to be taxed, and the property valuations: Canadian Allis- Chalmers Limited v. The City of Lachine (1).
Section 391 provides for the homologation of the collection roll, and after the period for payment has expired the taxes become a special hypothecary charge upon the property taxed. Even if that section does not apply to such a special assessment, the taxes, upon default of payment, would become a privilege upon the immovables under articles 2009 and 2011 of the Civil Code.
This interpretation is supported by the provisions of section 17 of chapter 111, R.S.Q. 1925. They require the registration of a certified copy by a corporate body. This copy is to be accompanied by a statement of the amount and other details of the loan,- the assessed value of the property of the municipality and the yearly rate of assessment to pay for the bonds. Here is public notice to every prospective purchaser of lands of the long term obligations by which a particular parcel may be bound.
A copy of the resolution in this case, with the particulars required, was registered in December, 1925.
Somewhat the same view of similar legislative language was taken by the courts of Quebec as early as 1887 in La
Communautg des Sceurs des Saints Noms de J6sus et Marie v. The Corporation of the Village of Waterloo (1). There, the Municipal Act gave to the council the power to "impose"
a tax 9n all the assessable property of the municipality for the payment of the interest and sinking-fund of a bond issue, and likewise provision that the tax " sera lev6e, pr6lev6e et pergue annuellement " in the same manner as other taxes " sur toutes les propri6t6s imposables de la municipalit6." There was involved, as here, a transfer of an immovable to a religious order of the Roman Catholic faith and precisely the same grounds of objection were presented to the Court of King's Bench as were submitted to this court. The language of the judgment seems to carry the hypothecary charge from the date of the original resolution. But for the matter before us, it is not necessary to go beyond the construction that a hypothec or privilege arises upon default in payment of each year's taxes; there is no relation back in time.
A number of cases have arisen in Quebec in which the incidence of these impositions upon contracts for the sale of immovables has been in question and the principle laid down has held the purchaser bound to the assumption of the tax where the levy has been made subsequently to the date of the contract. But that obviously follows from the view that the tax becomes complete only upon the homologation of the collection roll. A fortiori at that time there is no encumbrance in the nature of a hypothec or privilege.
But it is said that the resolution in this case is invalid under the judgment of this court in Les Commissaires d'Ecoles de la Paroisse de St. Adelphe v. Charest (2).
It was there held that, under sections 237 and 244 of the Act, the resolution must presently impose the taxes and that the language, " sera impos6," is not sufficient.
resolution here, there is no express imposition and the future tense is used in the expression, " shall be levied." But I read the paragraph providing for the taxation to imply in fact a present imposition sufficient for the purposes of section 244.
I am not disposed to extend the rule of the Charest case (1) beyond the precise words that were there dealt with. We must not overlook the fact that the statute deals with administration by ordinary citizens who are not to be charged with special appreciation of the refinements of language where the substance of the statutory requirement is clearly indicated by the language they use.
But there is another ground upon which I would hold the resolution now to be unassailable.
By section 246, it is provided that every bond before delivery shall bear a certificate of the Minister of Municipal Affairs establishing that the resolution authorizing the issue of such bond has been approved by the Lieutenant-Governor in Council and that such bond is issued in conformity with such resolution; and that every bond bearing such certificate shall be valid " and its validity shall not be contested for any reason whatsoever ". Now, admittedly the bond bore the certificate and is, therefore, valid, but to what does that validity extend? It is argued that there is created only a valid debt but I cannot agree with that. We must attribute to the legislature some knowledge of the commercial practices in marketing bonds of this nature, and the whole object of section 246 is to conclude just such questions as have been debated in this case. I should say that a purchaser of such a bond is entitled to the security he would have had if every preliminary .or conditional step had been taken in exact accordance with the provisions of the statute. Section 244 declares that the bond shall not be issued unless the resolution imposes the tax. The bond in the hands of a purchaser becomes valid and it would be intolerable that the purchaser should be told that the condition essential to that validity did not in fact or in law exist. The special assessment is for the sole benefit of the bondholders. They are the beneficiaries of that power to tax and the sufficiency of the resolution must be deemed concluded not only in relation to the bond as a debt, but also to the taxation intended to be appropriated exclusively to the payment of that debt.
That the valuation and collection rolls are significant to creditors and purchasers of bonds is indicated by the Chief Justice in Canadian Allis-Chalmers Limited v. The City of
Lachine (1):
Like considerations underlie the interests of the taxpayers inter se. The obligation they undertake is related to the property out of the taxes on which it is to be discharged:
and any material subtraction would work an injustice upon the remaining property. The principle recognized in the Act in relation to alterations in boundaries of school municipalities and districts, sections 77, 78, 85, 275 et seq., regards the interests of the taxpayers as well as of the bondholders.
The respondents are, then, entitled, as the Court of King's
Bench has held, to succeed in this action but the taxes they are claiming must be reduced to amounts based on the valuation roll in force when the resolution was passed, and the judgment modified accordingly.
To that extent the appeal must be allowed. If the parties cannot agree upon the amount recoverable on that basis, the matter may be brought before the registrar for determination. The appellants should have two thirds of their costs in this court: the respondents their costs of the trial and of the appeal to the Court of King's Bench on the scale applicable to the sum to which they may be found to be entitled.
J.-The respondents (plaintiffs) in this action claim of the appellant (defendant) the amount levied against the property in question as a special tax in the years 1939, 1940 and 1941.
In May, 1925, the Aylmer High School was destroyed by fire. In order to rebuild, the trustees obtained through a sale of debentures the sum of $25,000. The procedure that must be followed by the trustees with respect thereto is set forth in the Education Act (1925) R.S.Q. ch. 133.
The particulars of the resolution passed by the trustees under the provisions of section 244 and of the bonds issued pursuant thereto were registered in the Registration Office at Hull, Que., in December, 1925.
The property in question was at the time of the passing of the resolution owned by Mr. R. H. Wright and subject to the tax. This tax was collected annually with respect to this property until the year 1937, when it was purchased by the appellant.
The appellant contends that the resolution passed by the trustees does not meet the requirements of section 244. This resolution passed by the trustees on August 19, 1925 in part reads as follows:
It is contended that its language " a special tax shall be levied annually," phrased in the future tense, is not, and cannot provide, for a present or immediate tax within the meaning of section 244 of the Education Act. In my opinion that contention would have been available to the appellant if it had been made before the government approved of the resolution, as provided in section 246 of the Education Act. The existence of this approval in my opinion distinguishes this case from The School Commissioners of St. Adelphe v. Charest et al. (1)
Sections 242-246 inclusive deal specifically with the steps that must be taken by school trustees in order that the approval of such a resolution may be granted by the Lieutenant-Governor-in-Council.
These steps were taken and on November 8th, 1925, this resolution was approved by the Lieutenant-Governor-in-Council.
oATIOSID It is specifically provided by section 244 (1):
The bonds or debentures were issued by virtue of the resolution passed by the school corporation, and approved by the Lieutenant-Governor-in-Council, as provided under section 246, as it then was:
This language used by the legislature is very clear and definite. The certificate establishes the approval of the resolution, that the bonds or debentures are issued in conformity with such resolution, and that they shall be valid, and their validity shall not be contested for any reason whatsoever.
Then this section 246 must be read and construed with the other relevant sections, and particularly section 244. The language of section 244 (1) is equally clear and definite and confirms what appears to me to be the meaning of section 246, that the approval therein provided for applies to the resolution and includes both the validity of the bonds and the existence of the security. The main purpose of the resolution is to authorize the loan and impose a tax upon " the taxable property held for the payment ". It provides for an assured source of payment, an item of the greatest importance to the purchasing public. It follows that this iq one of the essentials to be considered by the Lieutenant-Governor-in-Council when arriving at a decision to grant or refuse the approval of the resolution. When the approval of the Lieutenant-Governor-in- Council is granted as evidence by the certificate, it constitutes an assurance to the ratepayers in the district, the h school trustees, and all conceined that the resolution, if within the competence of the trustees to pass, is valid, and that the bonds are issued in conformity with the resolution, and supported by the security indicated in the resolution. SJ.
This provision is similar to that which has been adopted E 0
.by other provinces throughout the Dominion. The purpose and object of the legislation is to place bonds and debentures upon a stable basis and to facilitate the sale of the bonds and debentures by the school districts.
It removes from the courts any inquiry into questions properly subject to the approval. That is as far as it goes. Such a provision does not enlarge the jurisdiction of the trustees and questions with respect to jurisdiction may be raised before the courts. Re Harper and Township of East Flamborough (1) ; In re Gillespie et al. and the City of Toronto (2) ; Kuchma v. Rural Municipality of Tache (3); The Canadian Agency Ltd. v. Tanner (4); Molison v. Woodlands (5). The appellant further submitted that the by-law was illegal because it included a provision that after acquired properties should become subject to the tax. No effort was made to support the validity of this latter provision. The authorities established as stated by Mr. Justice Anglin (later Chief Justice) that:
The City of Montreal v. Morgan (6).
If part of a by-law is void, it does not follow that all of the by-law is void if the void part can be severed from that which is valid. Halsbury, 2nd ed., vol. 8, p. 48, par. 82. Meredith & Wilkinson, Canadian Municipal Manual, p. 255; Robson & Hogg, Municipal Manual, p. 14.
In my opinion the part here objected to in this by-law is severable, and its invalidity does not justify a declaration that the by-law as a whole is invalid.
It was also contended that the resolutions of December
6th, 1938, November 13th, 1939 and November 26th, 1940 were unnecessary in relation to tax imposed by the resolution of August 19th, 1925 and that in fact these resolutions as passed imposed the taxes claimed for in this action. In view of the provisions of 244 (3), I agree that these resolutions were unnecessary in relation to the resolution of 1925. It should be noted .that they do not purport to, nor in my opinion do they alter, change or affect the resolution of 1925, and that so far as this action is concerned, they must be treated as mere surplus.
In my opinion, the resolution was within the competence of the trustees to pass, and when approved, the land in question in the language of the statute was "taxable property held for the payment of * * * such loan
The respondent asks a declaration that the property in question " be declared affected and hypothecated " in its favour for the payment of the taxes for the three years ihere claimed. Under the provisions of the School Act, in a case of this type a hypothecary charge comes into existence, after the special collection roll is homologated as required by section 391 and by virtue of the Civil Code, but it then becomes a hypothec upon all the " taxable property held for the payment " within the terms of the resolution and section 244 (1).
Section 249 of the Education Act makes reference to " a special hypothecary charge ", but this section must have reference only to general school taxes, as it specifically provides:
This special tax is specifically restricted by the provisions of section 244 (1) to the " taxable property held for payment ".
Therefore, I do not think the provisions of section 249 applicable to this case.
But it is contended that no hypothec exists in this case because there is no personal liability.
It is urged that though the tax is provided for by the original resolution, it is not in reality a tax until the roll is homologated.
Then in as much as the Education Act provides by section 424 that the appellants cannot be assessed, therefore at the time the tax came into being, they could not be personally liable therefor. It is the duty of a Court, so far as it may be reasonably possible having due regard for the language used, to construe a statute so 4s to give to its provisions that interpretation which will carry out the intent and purpose of the legislature and more particularly, that the sections thereof should be construed in a manner which will Estey J. make them complimentary rather than contradictory. Therefore, it is desirable that these general provisions contained in section 424 be read in relation to 242-246 and in such a manner as to give effect to all of these sections. This end is achieved by construing section 424 as applicable to general and special taxes imposed after the parties, in the position of the appellant, become occupants of the property within the meaning of this section. In my opinion, that is the construction which must be given to section 424, and therefore, in as much as the resolution in question was passed in 1925 and the appellant acquired the property in 1937, it has no application to the tax provided for by this resolution under 244 (1).
Then attention is called to section 251 and specifically section 251 (3), which provides:
This section, in my opinion, having regard to the express provision of section 244 (1) and the reasons above set forth with respect to section 424, has no application to this case. It is a general provision and must, in my opinion, be construed to apply only to general and special taxes imposed after the parties, in the position of the appellants, become subject to assessments, and therefore does not affect the impositions made prior thereto. I here use the word " impositions " because in section 244 (1) and (3) the word " imposed " is used.
It is important to keep in mind that provisions for exemption must be strictly construed. In Dame Mary Wylie v. The City of Montreal (1), Ritchie C.J. said:
Therefore, in the absence of express language, the appellant having purchased the property after it was, in the language of section 244 (1) " taxable property held for the payment ", must pay this tax until the debentures are liquidated.
The school tax is primarily a property tax, but when one reads the Act as a whole, it contemplates a personal liability upon the owner. It refers to the persons liable for the same and provides for the seiuzre and sale of movables in the event of non-payment. The language of Lord Thankerton appears appropriate in reference to this legislation in Provincial Treasurer of Alberta v. Kerr (2): Therefore, it appears to me that there is a personal liability within the meaning of the School Act upon the appellant as owner of the property with respect to this specific tax. Throughout, it seems to me that we are concerned mainly with the construction of sections 242-246 of the Education Act and as above stated, it is my opinion .that any person or corporation purchasing the property which has become " taxable property held for payment " under section 244 (1) must pay the tax, unless there is some statutory provision expressly exempting that person or corporation from the payment thereof. As intimated above, I can find no such provision applicable to this case.
In my opinion, the appeal should be dismissed.
Cases cited
Statutes and regulations cited
-
Unresolved citations
- section 244 of the Education Act
- sections 251
- section 946
- sections 244
- section 246
- Section 246
- section 244
- subsection (3)
- Section 391
- section 246 of the Education Act
- section 251 of The Education Act
- subsection (1)
- subsections (1)
- (3)
- Subsection (3)
- section (1) of The Education Act (1)
- subsections (17)
- (18)
- section (1)
- sections 242
- 244 of The Education Act
- section 249 of The Education Act
- section 249
- section 246 of The Education Act
- section 473 of the Municipal Act
- 244
- section 251
- section 242
- Section 244
- section 5889
- section 310
- section (3)
- section 17
- sections 237
- sections 77
- 78
- 85
- 275
- Sections 242
- section 391
- Section 249 of the Education Act
- section 424