Majority
ARMY AND NAVY DEPARTMENT
APPELLANT; STORE (WESTERN) LIMITED ...
THE MINISTER
OF NATIONALI
RESPONDENT. ON APPEAL FROM THE EXCHEQUER One half of the shares of the appellant company W. was owned by the appellant company A. and the other half was owned by company S. All the shares of company A. and company S. were owned by two brothers, their brother-in-law and the son of one of the brothers. The Minister regarded all three companies as related corporations by virtue of s. 36(4) of the Income Tax Act and designated company S. to receive the benefit of the lower tax rate for the years 1949 and 1950 under s. 36(1) and companies W. and A. to be assessed under s. 36(2). The assessment was confirmed by the Exchequer Court.
Under s. 36(4), a corporation is related to another if one of them owned directly or indirectly 70 per cent or more of all the issued common shares of the capital stock of the other, or if 70 per cent or more of all the issued common shares of each are owned directly or indirectly by (i) one person, (ii) two or more persons jointly, or (iii) persons not dealing with each other at arm's length, one of whom owned directly or indirectly one or more of the shares of each of the corporations. Taschereau, Estey, Locke, Cartwright and Fauteux JJ. Held: (Estey J. dissenting), that company W. was not related to either company A. or company S. as neither company owned directly or indirectly 70 per cent of the shares of company W.; nor were 70 per
AVY cent of the shares of company W. owned directly or indirectly by one person or by two or more persons jointly; and even though companies A. and S. were persons not dealing with each other at arm's length, neither of them owned any shares in the other.
OF Per Curiam: Companies A. and S. were related corporations within the meaning of s. 36(4) (b) (iii), since the shares of both, being owned by persons connected by blood relationship or marriage, were owned by
& persons not dealing with each other at arm's length.
Per: Taschereau, Locke and Fauteux JJ.: The two brothers and the son were connected by blood relationship since they stood in lawful descent from a common ancestor (In re Lanyon [19271 2 Ch. 264), and the brother-in-law, since he was married to a sister of the two brothers, was connected with them by marriage within the meaning of s. 127(5)(c).
Per Cartwright J.: To be deemed by s. 127(5),(b) not to deal with each other at arm's length, corporations must be controlled by the same person; it is not sufficient that they are controlled by the same group of persons.
Per Cartwright J.: Shareholders, either individually or collectively, do not have any ownership direct or indirect in the property of the company in which they hold shares.
APPEAL from the judgment of the Exchequer Court of
Canada (1) Archibald J., holding that both appellant companies were related corporations.
M. M. Grossman Q.C. for the appellants.
J. D. C. Boland and K. E. Eaton for the respondent.
The judgment of Taschereau, Locke and Fauteux JJ.
was delivered by:- LoCKE, J.:-These appeals were taken by Army and
Navy Department Stores (Western) Limited, a company incorporated under the Companies Act of British Columbia, and Army and Navy Department Stores Limited, a company incorporated under the Companies Act of Alberta, from judgments delivered by the late Mr. Justice Archibald in the Exchequer Court (1), and were heard together.
The facts to be considered are, however, not identical and the appeals must be considered separately.
The British Columbia company, which I will refer to as the Western Company, carries on business in the City of
New Westminster. For its fiscal year ending October 31,
1949, the company filed a return showing a profit of
$58,651.96 and computed its tax under the provisions of the
(1) [19521 Ex. C.R. 546.
74730-8
Income Tax Act at $17,055.15, which amount was paid. By AnRmy& an assessment dated October 24, 1950, the Minister of DEArMYNT National Revenue assessed the company a tax for the said TDL. period in the amount of $19,061.08. The dispute is as to its MINI liability for this difference.
RATINA
Section 36 of the Income Tax Act (11-12 Geo. VI, cap. 52) 1948, as amended both before and after the Western company made its return, as it applied to income for the year DEPARTmENT 194 reads as follows:- 36. (1) The tax payable by a corporation under this Part upon its taxable income or taxable income earned in Canada, as the case may be, MINISTER (in this section referred to as the 'amount taxable') for a taxation year is, except where otherwise provided,
(a) 15 per cent of the amount taxable if the amount taxable does not Locke J.
exceed $10,000, and
(b) $1;500 plus 38 per cent of the amount by which the amount taxable exceeds $10,000 if the amount taxable exceeds $10,000. (2) Where two or more corporations are related to each other in a taxation year, the tax payable by each of them under this Part for the year is, except where otherwise provided by another section, 38 per cent of the amount taxable for the taxation year.
(3) Notwithstanding subsection (2), where two or more corporations are related to each other, the tax payable by such one of them as may be agreed by them or, if they cannot agree, as may be designated by the Minister shall be computed under subsection (1).
(4) For the purpose of this section, one corporation is related to another in a taxation year if, at any time in the year,
(a) one of them owned directly or indirectly 70 per cent or more of all the issued common shares of the capital stock of the other, or (b) 70 per cent or more of all the issued common shares of the capital stock of each of them is owned directly or indirectly by (i) one person,
(ii) two or more persons jointly, or
(iii) persons not dealing with each other at arms length one of whom owned directly or indirectly one or more of the shares of the capital stock of each of the corporations.
This section is applicable to the 1949 and subsequent taxation years.
(5) When two corporations are related, or are deemed by this subsection to be related, to the same corporation at the same time, they shall, for the purpose of this section, be deemed to be related to each other.
Section 127 as it applied to that period read:- For the purposes of this Act,
(a) a corporation and a person or one of several persons by whom it is directly or indirectly controlled,
'b) corporations controlled directly or indirectly by the same person, or
The difference between the amount of the tax of the Western company for the period as computed by it and the amount of the tax assessed was due to the fact that the
Minister assessed the tax under ss. (2) of s. 36, while the company claimed that the tax should be levied under the provisions of ss. (1).
The company gave a notice of objection to the assessment to the Minister who confirmed the assessment. The company then appealed to the Income
Tax Appeal Board and, in a considered judgment delivered by Mr. R. S. W. Fordham, Q.C. on October 29, 1951, for the
Board, the appeal was dismissed.
There is no record of the proceedings before the Board before us and we are not informed as to whether or not evidence was given by the appellant.
The Minister of
National Revenue, in notifying the company that he had confirmed the assessment, had stated that the assessment rested on the ground that the taxpayer and the Army and
Navy Department Stores Limited were related companies, within the meaning of ss. (4) of s. 36: the company referred to was apparently the Alberta company, one of the appellants in these proceedings.
The judgment of the Tax
Appeal Board found that one half of the shares of the
Western company were owned by the Alberta company and that the other half, less two shares, was owned by a Saskatchewan company of the same name. The shareholdings in the Alberta and Saskatchewan companies were found to be as follows:
Alberta company
Saskatchewan company
H. R. Cohen ......
50,000
H. R. Cohen ......
100,000
S.
S.
100,000
S.
40,000 J. W. Cohen ......
50,000
[19531 As to the remaining shares in the Western company, it was & found that H. R. Cohen was the owner of one and that the remaining share was owned by a stranger. After finding that H. R. Cohen and S. J. Cohen were brothers and Leshgold their brother-in-law and that J. W. Cohen (a son of S.
While the said shares of the appellant company's stock are owned by the Alberta company as such, and not by the individual shareholders of the latter, I find it difficult to escape the conclusion that there was at least indirect control of the appellant company by H. R. Cohen, J. Cohen and S. D. Leshgold. Bearing in mind the far-reaching words found in section 36(4) (b), 'owned directly or indirectly', it does not, I think, conflict with the effect of Salomon v. Salomon, (1897) A.C. 22, to hold that these three holders (sic) of the Alberta company were in a Locke j.
position to exercise full, even if indirect, control over the activities of the appellant company by virtue of their substantial holdings in the former. In the case of H. R. Cohen, his voting power was augmented by his twofifths interest in the Saskatchewan's company's shares. It is significant too that he was also not at arm's length with its two other shareholders, they being closely related to him.
The Minister's decision did not show which of the two prairie province companies was deemed related to the appellant company.
It matters little, however, as both companies' shares were held mostly by the Cohens, and the shareholdings of each company in the appellant company's stock were about equal, as indicated above.
It is apparent from the reasons delivered that there was no evidence before the Tax Appeal Board that the two shares in the Western Company to which reference was made were the property of the Saskatchewan company, as was shown in the evidence taken before Archibald J. It was there shown by the evidence of the secretary of the Saskatchewan company that it was the owner of 2,500 of the shares of the Western company but held a certificate for 2,498 shares only, one share having been issued to H. R. Cohen and one to S. D. Leshgold, in order to qualify them as directors. The transfer form on the back of these two certificates had been signed by Cohen and Leshgold respectively and it .was shown that the shares were held by the solicitors for the Saskatchewan company on its behalf. There was no contradiction of this evidence.
Mr. Justice Archibald, who disposed of the appeal of the Alberta company at the same time as he dismissed the appeal of the Western company, did not mention the fact that it had been proven that the ownership of the shares was divided equally between the Alberta and the Saskatchewan companies and I think it is clear that he did not consider the effect that this had upon the issue in the appeal. His reasons merely stated that he dismissed the appeal of the Western company for the reasons given in his decision on the appeal of the Alberta company. The issue in that appeal, however, was different.
Upon the undisputed evidence the facts accordingly are that during the taxation period in question the 5,000 issued shares of the Western company were owned one half by the
Alberta and one half by the Saskatchewan company. The Western company was entitled to be taxed under the terms of ss. (1) of s. 36, unless it lost that benefit by reason of being "related" to one of the other companies, as that expression is defined by ss. (4) -of s. 36. Neither the decision of the Minister nor of the Tax Appeal Board nor of
Archibald J. mentioned to which corporation the Western company was related but, if I understand correctly the argument addressed to us on behalf of the Minister, the
Crown's position is that it was related to both the Alberta and the Saskatchewan companies. Since, however, neither the Alberta nor the Saskatchewan company owned 70 per cent of all the issued common shares of the capital stock of the western company, para. (a) of ss. (4) cannot apply. As to para. (b) it is not suggested that 70 per cent of the issued common shares were owned by one person or by two or more persons jointly, so that if the Western company is to be deprived of the benefit of ss. (1) it must be under the terms of subpara. (iii) of para. (b).
The expression "persons" include corporations under the definition of that term in s. 127(1) (ab) of the Act. If it be assumed that the
Alberta and the Saskatchewan -companies are persons not dealing with each other at arm's length, there still remains the fact that while each owned half of the shares of the
Western company the Alberta company did not own any of the shares of the Saskatchewan company nor did the Saskatchewan company own any shares in the Alberta company. Accordingly, subpara. (iii) has no application. With respect, the reasons for the judgment of the Tax Appeal
Board do not appear to me to touch the question to be decided. In my opinion, the Western company was entitled to be taxed under the provisions of ss. (1) of s. 36.
The appeal of the Alberta company raises a quite different issue. As has been shown above, H. R. Cohen and his brother-in-law Leshgold owned 90,000 of the 100,000 issued shares of the Alberta company -and H. R. Cohen owned Anur & 100,000 of the shares of the Saskatchewan company. In addition to this, S. J. Cohen, a shareholder of the Alberta company, was the owner of 100,000 shares of the Saskatchewan company and his son J. W. Cohen 50,000 shares. If, therefore, the Cohens and Leshgold were persons not dealing with each other at arm's length, the conditions of subpara. (iii) are complied with and the two corporations are to be deemed related.
For the appellant it is said that the expression "blood relationship" is so vague and uncertain as to be incapable of interpretation. In support of this contention, the cases on the construction of the words "relatives" or "relations" in matters involving the interpretation of wills such as Ross v. Ross (1), In Re Lanyon (2), and Sif ton v. Sif ton (3), are relied upon. In Re Lanyon, the testator by his will provided that his trustees should stand possessed of his residuary estate upon trust to pay the income to his son for his life and on his decease upon trust to pay the capital to his children or grandchildren or equally between them if more than one, provided that his son did not marry a "relation by blood." It was contended that the condition was void for uncertainty. Russell, J. by whom the matter was decided, considered that the meaning of "blood relationship" was clear and that it described the relationship existing between two or more persons who stand in lawful descent from a common ancestor. He did not consider the provision in the will void for uncertainty but held it to be ineffective as being contrary to public policy as being a restraint upon marriage. In Sif ton's case, Lord Romer who delivered the judgment of the Judicial Committee, after referring to the meaning attributed to the expression "blood relation" by Russell J., said that, in their Lordships' opinion, the condition might have been held to be void for uncertainty as, if the testator did not intend by the use of the expression to include the whole human race, he had failed to specify the number of generations in which no common ancestor of the spouses was to be found. I do not think that these decisions are of assistance in determining the present matter. The fact that there would undoubtedly be difficulty in determining the scope of the expression in some circumstances does not render the words meaningless.
The question here to be determined is whether H. R. Cohen,
S. J. Cohen and J. W. Cohen are connected by blood relationship. The three men are shown by the evidence to be descended from a common ancestor, the father of H. R. and S. J. Cohen.
Accepting the meaning attributed to the expression by Russell J., which I think to be the correct one, these men are connected by blood relationship.
This does not, however, dispose of the matter since, while the three Cohens owned all of the shares in the Saskatchewan company, Leshgold owned 40 per cent of the shares in the Alberta company. Leshgold is married to a sister of H. R. and S. J. Cohen and the question is, therefore, whether he is "connected by marriage" with them, within the meaning of the subparagraph.
The matter is to be considered without reference to the made to s. 127 by s. 31 of c. 29 of the Statutes of 1952, by which the expression was defined. Without overlooking the necessity for clarity in the language of a taxing statute, I am of the opinion that this language is sufficiently clear. One of the meanings assigned to the word "connection" in the New
Oxford Dictionary is: relationship by family ties as marriage or distant consanguinity, and a second: a person who is connected by others by ties of any kind, especially a relative by marriage or distant consanguinity.
In Webster's New International Dictionary, the word is similarly defined. In this sense, which I think to be the natural and ordinary meaning of the expression, Leshgold and the Cohen brothers were connections and so "connected by marriage", within the meaning of s. 127(5) (c). As Leshgold and H. R.
Cohen between them owned 90 per cent of the shares of the
Alberta company, the conditions of s. 36(4)(b)(iii) were complied with and the Alberta and Saskatchewan companies were "related" to each other, within the meaning of s. 36(3).
It is stated in the factum of the appellant that the
Minister of National Revenue had of his own motion and without consulting the Alberta and Saskatchewan companies designated the latter as the corporation to be taxed under ss. (1) of s. 36. Subs. (3) provides that when two or more 'corporations are related to each other the tax payable by such one of them as may be agreed by them shall be computed under ss. 1 and that it is only where they cannot agree that the company to be so taxed may be designated by the Minister. We have no record of the proceedings before us in which the Minister is said to have made this direction. In the absence of any evidence on the point, I think we cannot be asked to assume that the Minister acted without evidence satisfactory to him that the parties could not agree which should receive this benefit, if only one was entitled to it.
In the result, the appeal of the Western company should be allowed with costs throughout and judgment entered declaring that, for the taxation period in question, that company was entitled to be taxed under the provisions of of s. 36. The appeal of the Alberta company should be dismissed with costs.
J. (dissenting in part):-There are here two appeals, one by Army & Navy Department Store Limited, an Alberta company (hereinafter referred to as the Alberta Corporation) and the Army & Navy Dept. Store (Western) Limited, a British Columbia company (hereinafter referred to as the Western Corporation). These companies, for the taxation years 1949 and 1950, along with the Army & Navy Department Store Limited, a Saskatchewan company (hereinafter referred to as the Saskatchewan Corporation), were taxed as related corporations. The first two corporations were taxed under s. 36(2) of The Income Tax Act (S. of C. 1948, 11-12 Geo. VI, c. 52), while the Minister designated that the Saskatchewan Corporation should be taxed under s. 36(3).
All of the corporations filed their returns as unrelated or independent corporations.
It is agreed that the shares in these corporations are held as follows:
(1) The Saskatchewan Corporation-the shareholders are: 40 per cent to S. J. Cohen
20 per cent to J. W. Cohen (his son)
40 per cent to H. R. Cohen (a brother of S. J. Cohen)
50 per cent to H. R. Cohen
10 per cent to S.
40 per cent to S. D. Leshgold (brother-in-law of H. R. Cohen and S.
(3) The Western Corporation has 5,000 shares to th of $10.00 each, divided as follows:
to the Alberta Corporation ..............
to the Saskatchewan Corporation ..........
to H. R. Cohen ......................
to J.
The shares in the name of H. R. Cohen and J. F. Bolecon in the Western Corporation are director's qualifying shares.
e value & 2,500 2,498 & Section 36 reads in part as follows:
36. (1) The tax payable by a corporation under this Part upon its taxable income or taxable income earned in Canada, as the case may be, (in this section referred to as the 'amount taxable') for a taxation year is, except where otherwise provided,
(a) per cent of the amount taxable if the amount taxable does not exceed $10,000, and
(b) $1,500 plus 38 per cent of the amount by which the amount taxable exceeds $10,000, if the amount taxable exceeds $10,000. (2) Where two or more corporations are related to each other in a taxation year, the tax payable by each of them under this Part for the year is, except where otherwise provided by another section, 38 per cent of the amount taxable for the taxation year.
(3) Notwithstanding subsection (2), where two or more corporations are related to each other, the tax payable by such one of them as may be agreed by them or, if they cannot agree, as may be designated by the Minister shall be computed under subsection (1).
The term "related corporations" is defined in s. 36(4), as amended in 1951 and made applicable to 1949 and subsequent taxation years, as follows:
36....
(4) For the purpose of this section, one corporation is related to another in a taxation year if, at any time in the year,
(a) one of them owned directly or indirectly 70 per cent or more of all the issued common shares of the capital stock of the other, or (b) 70 per cent or more of all the issued common shares of the capital stock of each of them is owned directly or indirectly by (i) one person,
(ii) two or more persons jointly, or
(iii) persons not dealing with each other at arms length one of whom owned directly or indirectly one or more of the shares of the capital stock of each of the corporations.
The phrase "arms length" is defined in s. 127(5) as follows:
. . .
k (5) For the purposes of this Act,
(a) a corporation and a person or one of several persons by whom it is directly or indirectly controlled,
MINISTER OF Estey J. The appellants submit that as the word "relationship" or "related" is not defined in the statute at any time relevant hereto (it is defined subsequently, S. of C. 1952, c. 29, 31, ss. 2) that it ought to be construed as meaning the next of kin who would take in the event of intestacy. In their submission appellants' counsel adopted the statement of Chief Justice Strong in Ross v. Ross (1);
In support of this contention he invokes the rule that where certain words have received a judicial interpretation Parliament, in subsequently adopting or using such words without any indication to the contrary, may be taken to have intended that they be used as so interpreted in the courts. Barlow v. Teal (2).
The respondent points out that the statement of Chief Justice Strong was in relation to the interpretation of a will and that, while Parliament, in legislating in respect to the same or similar matters, might so intend, it does not apply where, as here, the subject matter of the legislation is in relation to income tax, a subject entirely different from that of wills. It is, however, unnecessary to decide this issue. Even if we assume that the word "relationship" means next of kin, these corporations are, within the meaning of the statute, related. It will be observed that under s. 36(4) (b) (iii) there are two requirements: (a) at least 70 per cent of the issued common shares in each of the corporations shall be owned directly or indirectly by persons not dealing with each other at arms length; and (b) one of the persons must own at least one or more of the shares of the capital stock in each of the corporations. It would appear that under the terms of this section the Saskatchewan and Alberta Corporations are related.
In the Saskatchewan Corporation H. R. Cohen and S. J.
Cohen own 80 per cent of the shares of stock.
These parties, H. R. Cohen and S. J. Cohen, are brothers and the former having no children his brother, S. J. Cohen, would come within those who would take if the former died intestate. In the Alberta Corporation H. R. Cohen and his brother-in-law S. D. Leshgold own 90 per cent of the stock and S. J. Cohen owns 10 per cent.
In other words, the shares of the Alberta 'and Saskatchewan Corporations are owned by persons who are "connected by blood relationship or marriage" within the meaning of s. 127(5) (c).
further requirement of s. 36 (4) (b) (iii) is found in the fact that H. R. Cohen owns "one or more of the shares of the capital stock of each of the corporations." It follows that EatJ. the Alberta and Saskatchewan Corporations are related within the meaning of s. 36(4) (b) (iii).
In the Western Corporation the shares are held -as follows:
Alberta Corporation .......................
2,500
Saskatchewan Corporation ..................
2,498
H . R . Cohen ..............................
J.
The issue is again whether this Western Corporation is related to the Alberta and Saskatchewan Corporations and in particular whether 70 per cent or more of all the issued common shares of capital stock of each of these corporations is "owned directly or indirectly by . . . persons not dealing with each other at arms length one of whom owned directly or indirectly one or more 'of the shares of the capital stock of each of the corporations" within the meaning of s. 36(4) (b) (iii).
We are not here concerned with the fact that a corporation is 'a distinct and separate legal entity nor with any question of corporate capacity or power. The issue here raised is that of direct or indirect ownership of the shares in the Western Corporation. That the Alberta and Saskatchewan Corporations own all the shares in the Western
Corporation does not necessarily conclude the matter in determining whether these corporations are related within the meaning of the statute. These corporations are artificial bodies that act as directed by individuals. H. R. and
J. Cohen and S. D. Leshgold are owners of all the shares & in the Alberta Corporation and all but 20 per cent (owned by J. W. Cohen, a son of S. J. Cohen) in the Saskatchewan Corporation.
While the appellants emphasize that s. 36(4)(b)(iii) deals with ownership of shares, it should be observed that it is ownership "directly or indirectly" on the part of persons not dealing at arms length. The dictionary defines "indirectly" as circuitous or roundabout.
Parliament, by the inclusion of the word "indirectly" in this context, evidenced a clear intention that the share position of a corporation should be so far examined as to ascertain who, in fact, are the owners who effectually exercise the powers of ownership. It is a provision in respect of which the language of Wills J. is appropriate:
The St. Louis Breweries Limited v. Apthorpe (1). When one examines this situation as suggested by Wills J., the conclusion cannot be avoided that, while directly the Saskatchewan and Alberta Corporations own the Western Corporation, H. R. and S. J. Cohen and S. D. Leshgold are the indirect owners of 70 per cent or more of all the issued common shares of the capital stock and are persons not dealing at arms length within the meaning of s. 36(4)(b)(iii). It would seem that Parliament, by the inclusion of the word "indirectly" in s. 36(4) (b) (iii) intended to provide for just such situations as here created by the three parties H. R. and S. J. Cohen and S. D. Leshgold.
Then the other requirement of s. 36(4) (b) is satisfied by the fact that H. R. Cohen owns at least one share in each of these corporations. The evidence discloses that his share in the Western Corporation is held in trust for the Saskatchewan Corporation. It is described in the evidence as a share given to him in order that he might serve in the capacity as a director and, therefore, one who must act at the instance of the Saskatchewan Corporation, which, in fact, means that he will act at the instance of himself and S. J. Cohen who own 80 per cent of that Corporation. The fact that he has not the beneficial interest in that one share is, not, under the circumstances of this case, sufficient to take him out of the provisions of s. 36(4) (b) (iii).
All of these corporations filed their income tax returns as if they were unrelated or independent corporations and the
Minister has designated the Saskatchewan Corporation as the one that might be taxed under s. 36(3), which provides:
It is here contended that, inasmuch as there is no evidence that the parties could not agree, the Minister had no authority to make such a designation.
Such an issue might well be raised by the Saskatchewan Corporation,
E-rJ. which, however, has not taken an appeal from the Minis- E ter's decision. It cannot appropriately be raised by either of the appellants in the appeals here taken, particularly as it is not contended that either of these appellants (Alberta and Western Corporations) should have been so designated.
The appeals should be dismissed.
J.:-These appeals were argued together.
The facts out of which they arise and the relevant statutory provisions are fully set out in the reasons of other members of the Court and I shall repeat them only so far as may be necessary to indicate the reasons for the conclusion at which I have arrived.
For the reasons given by my brother Locke I agree that the appeal of the Alberta Company should be dismissed.
Turning to the appeal of the Western Company, the question is whether it is related to either the Alberta Company or the Saskatchewan Company. The notion of one company being related to another is the creation of statute and whether or not the appellant is so related must be ascertained by applying the words of the statute to the facts. To establish the relationship it must appear that two conditions co-existed during the taxation year, (a) that as to both the appellant company and the company to which it is said to be related 70 per cent or more of all its issued common shares was owned directly or indirectly by persons not dealing with each other at arms length, and (b) that one of such persons owned directly or indirectly one or more of the shares of each of the companies.
Dealing first with condition (a), I agree, for the reasons Amy & stated by my brother Locke, that it is established in the case of both the Alberta Company and the Saskatchewan Company that 70 per cent or more of its issued common shares was owned directly by persons not dealing with each other at arms length (viz. in the Alberta Company by H. R. Cohen, S. J. Cohen and S. D. Leshgold and in the Saskatchewan Company by H. R. Cohen, S. J. Cohen and J. W. Cohen).
Can the same be said of the appellant company? For the respondent two alternative submissions are made. First, it is said that the Alberta Company and the Saskatchewan Company own more than 70 per cent of all the issued shares of the appellant company and that they are ctwightJ. persons not dealing with each other at arms length as they are both controlled by the same two individuals, H. R. Cohen and S. J. Cohen, whose total holdings amount to 60 per cent of the issued shares of the Alberta Company and 80 per cent of the issued shares of the Saskatchewan Company. If the statute were silent 'as to the circumstances in which corporations shall be deemed not to deal with each other at arms length this submission would have great force, but when section 127 by clause (b) provides that corporations controlled directly or indirectly by the same person shall be deemed not to deal with each other at arms length it appears to me to negative the view that corporations are to be deemed not to deal with each other at arms length when controlled not by the same person but by the same group of persons. Expressio unius exclusio alterius. When the wording of clause (b) of section 127 is contrasted with that of clause (a) it seems to me impossible to read the word "person" in clause (b) as including the plural. While the Alberta Company and the Saskatchewan Company may well be said to be controlled by the same persons they are not controlled by the same person and in my opinion they can not on this ground be deemed for the purposes of the Act not to deal with each other at arms length.
Secondly, and alternatively, it is said that more than 70 per cent of the shares of the Western Company while owned directly by the Alberta Company and the Saskatchewan Company are owned indirectly by the shareholders of the two last mentioned companies H. R. Cohen, S. J. Cohen, S. D. Leshgold and J. M. Cohen who, as shewn in the reasons of my brother Locke, are persons not dealing with each
& other at arms length. With the greatest respect for those who hold the contrary view, I do not think that shareholders, either individually or collectively, have any ownership direct or indirect in the property of the company in which they hold shares. In Macaura v. Northern Assurance Company (1), Lord Buckmaster said:and at page 633 of the same report, Lord Wrenbury points out that even a shareholder who holds all the shares in aCartwrightJ. corporation "has no property legal or equitalble in the assets of the corporation."
In Salomon v. Salomon and Company (2), Lord Macnaghten says at page 51:- In my respectful opinion these passages correctly state the law.
For these reasons I -am of opinion that the existence of condition (a) mentioned above has not been established in regard to the Western Company and this is sufficient to dispose of the appeal in its favour; I wish, however, to say a few words as to condition (b).
If the argument of the respondent, that all the shares of the Western Company were owned indirectly by the three
Cohens and Leshgold, had prevailed, it might have been said that H. R. Cohen and S.
by owning indirectly one or more of the shares of the
Western Company, 'although there would have been manifest difficulty in identifying any share or shares of the last mentioned company as being owned by either of them.
However, this point was not pressed by the respondent who relied on the fact that one share of the Western Company was registered in the name of H. R. Cohen. If, then, the Alberta Company and the Saskatchewan Company are regarded, as I think they must be, as the owners of at least 4998 of the 5,000 issued shares of the Western Company but, contrary to the view I have expressed above, should be deemed to be persons not dealing with each other at arms length, then I would agree with my brother Locke that it has been shown that H. R. Cohen did not own any share of the capital stock of the Western Company. It is argued for the respondent that even if the Saskatchewan Company is the beneficial owner the share registered in the name of H. R. Cohen, the latter is its "direct owner" but in my view on the evidence he had no ownership either direct or indirect in this share. The Companies Act of British Columbia, R.S.B.C. does not require that director shall be the owner in his own right of a share in the company but only that his qualification shall be "the holding of at least one share in the company" and by section 90 a certificate is made only prima facie evidence of title. In the case at bar the evidence establishes that the share registered in H. R. Cohen's name was the sole property of the Saskatchewan Company. Mr. Cohen could not even have given title by estoppel to a purchaser in good faith and without notice as he did not have the certificate in his possesion but had endorsed it and delivered it to the solicitor of the Saskatchewan Company to hold for it and not for him. I conclude therefore that the existence of condition (b), mentioned above, was negatived.
For the above reasons I would dispose of both appeals as proposed by my brother Locke.
Appeal of the Western company allowed with costs; appeal of the Alberta company dismissed with costs. Solicitors for the appellants: Grossman & Sharp. Solicitor for the respondent: J. D. C. Boland.
Interlocutory injunction - Whether appeal de plano to Court of Appeal from judgment setting it aside-Arts. 43, 46,
957, 966, 969, 1211 C.P.C........
AUTOMOBILE-Automobiles
- Negligence-Mother fatally injured while riding in police car following ambulance conveying injured child to hospital-Liability of city where no gross negligence-Whether deceased transported as a passenger in the ordinary course of the business of the city-Motorvehicle Act R.S.B.C. 1948, 227, s. 82(b).
Section 82 of the Motor-vehicle Act, R.S.B.C.
1948, c. 227 exempts the owner or driver of a motor-vehicle from liability to a passenger by reason of the operation of the motor-vehicle, in the absence of gross negligence, but does not relieve
"any person to whose business the transportation of passengers is normally incidental, transporting a passenger in the ordinary course of the transporter's business" from liability arising from the death of such passenger.
The plaintiff as next friend of his two infant sons, and on his own behalf, sued the City of Vancouver and the driver of a police car under the Families Compensation Act. R.S.B.C. 1948, c. 116, for damages arising out of the death of his wife, the boys' mother. The latter was fatally injured when a member of Vancouver's Police Force, acting on the orders of his superior officer, was transporting the parents in a police car owned by the City, to a hospital to which a third child, injured in a traffic accident was being conveyed in an ambulance.
The action was tried before a jury, which in answer to questions, found that the defendant city was a person to whose business the transportation of passengers was normally incidental and that it was transporting the parents in the ordinary course of its business. It also found negligence but not gross negligence on the part of the driver of the police car, and awarded damages. The Court of Appeal for
British Columbia set aside the judgment and dismissed the action. Held: That there was no evidence to support the jury's finding that the parents in the circumstances of the case were being transported in the ordinary course of the city's business.
Judgment of the Court of Appeal for British
Columbia (1952-53) 7 W.W.R., affirmed.
MACDONALD V. CITY
AUTOMOBILE-Continued
Fatal injuries vehicle-Car stationary on highway-Approaching driver - Liability - Last clear chance-Trustee Act, R.S.A. 1942, 215, 32........................
3-Automobile-Collision with approaching car in snow cloud raised snow plough on wrong side of the road-Liability-Damages-Concurrent findings as to amount compensation for injuries. The automobiles of the respondent Dalton and of the respondent Madsen collided when, in order to avoid a snow plough coming toward him on the wrong side of the road, Dalton drove his car to the left and into a cloud of snow which the plough was blowing across the road. The trial judge apportioned the blame between Dalton and the operators of the plough at two-thirds and one-third respectively. The Appellate Division of the Supreme Court of Alberta held that the operators of the plough were solely to blame but refused to increase the amount of the damages awarded to Dalton. This Court agreed unanimously with the Appellate Division that the accident was occasioned by the sole negligence of the operators of the plough.
On Dalton's cross-appeal for an increase in general damages, Held: (Locke J. dissenting), that the cross-appeal should be allowed.
Per: Rand, Kellock, Cartwright and Fauteux JJ.: While a second Court of Appeal should be extremely slow to interfere with the assessment of damages made by a judge at trial and affirmed by the first Court of Appeal, it is nonetheless its duty to do so when satisfied that the amount awarded is a wholly erroneous estimate of the damages (Nance v. B. C. Electric Ry Co. Ltd. [1951] A.C. Such was the award in this case. The amount was not commensurate with the injuries suffered and it would appear that the trial judge either failed to give due weight to his findings as to the gravity and permanence of the injuries or allowed his assessment to be too greatly influenced by the mere possibility of improvement. Per: Locke J. (dissenting in part): Since there were concurrent findings on the question of fact as to what sum of money would be a reasonable compensation and since it has not been shown that the Courts below erred on some matter of principle in arriving 74731-2
AUTOMOBILE-Concluded at their conclusions, this Court, following its well settled practice, should not interfere with the assessment.
OTHERS DALTON....
4.-Automobile-Collision at intersection between street car and ambulance-Liability- Claim by husband for loss of wife's services and companionship.
V. OTHERS ........
CERTIORARI-Certiorari-Labour Law- Powers and duties of Ontario Labour Relations Board-Certification of bargaining agent-Prior ascertainment of facts-Obligation to exercise judicial functions-The
Labour Relations Act, 1948 (Ont.) c. 51- Regulations, 1948, s.
7-10 ..........
CIVIL CODE-Article 243 (Paternal Authority)............................
2.-Articles 982, 984 (Obligations). . 456
3.-Article 1200 (Performance of Obligation)............................
4.-Article 1892 (Dissolution of Partnership)..............................
CODE OF CIVIL PROCEDURE-Articles
43, 46 (Appeal)....................
2.-Article 50 (Jurisdiction of Superior
Court).............................
See 4.
3.-Article 82 (Party to be heard or summoned).............
...........
See 4.
4.-Articles 957, 961, 966, 969 (Injunctions).............................
5.- Article 1003 (Prohibition) .....
See 4.
6.- Article 1211 (Appeal) .........
S.
124 (1) of The Companies Act, 1934 (Can.)
c. 33, provides that where when any contract involving the transfer of shares in one
COMPANIES-Continued company has within four months after the making of the offer been approved by the holders of not less than nine-tenths of the shares affected, the transferee company may, at any time within two months after the expiration of the said four months give notice in such manner as may be prescribed by the court, to any dissenting shareholder that it desires to acquire his shares, and where such notice is given the transferee shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which, under the contract, the shares of the approving shareholders are to be transfererd to the company. The respondent Trust company, acting on behalf of an undisclosed principal, on Dec. 1, 1950, made an offer to the shareholder of the common stock of the respondent pulp and paper company to purchase their shares at $200 per share, subject to the offer being accepted by Dec. 15, 1950 by the holders of not less than 90 per cent of the shares. It further provided that it should not be bound to accept or pay for any shares not deposited with it by that date.
The holders of more than the required percentage accepted and complied with the terms of the offer, but the appellant did not, nor did the intervenants. On April 15, 1951 upon application of the respondents, Coady J. made an order under s. 124 (1) of the Act authorizing the Trust company to notify the shareholders who had not accepted the offer that it desired to acquire their shares under its terms and that, unless upon an application made by any of them within one month from the date upon which notice was given them the court should otherwise order, the Trust company would be entitled to acquire their shares on such terms. The appellant then brought action naming the respondents as defendants, claiming a declaration that the Trust company was neither entitled nor bound to purchase his shares, nor the plaintiff bound to sell or transfer them to it, and that s. 124 was ultra vires, and alternatively that its provisions did not apply to the plaintiffs' shares. He also moved for an order setting aside the ex parte order made by Coady J. The latter dismissed the action and the motion.
An appeal to the Court of Appeal for British Columbia was also dismissed. Held: That the language of s. 124 (1) of The Companies Act contemplates that the offer shall be open for acits making by those to whom it is made. Where the offer, as in this case, does not comply with the terms of the subsection, the offeror is not entitled to invoke the assistance of the court to compel the dissentients to transfer their shares.
Judgment of the Court of Appeal for British Columbia (1952) 6 W.W.R. (N.S.)
652, reversed COMPANIES-Concluded 1 7"'
2-Companies - Directors - Fiduciary
Position - Liability to account surrender of, no reduction of capital involved-validity. The Lord Nelson Hotel
Co. Ltd. was incorporated under the Nova
Scotia Companies Act with an authorized capital of 6,400 preference shares, par value
$100, and 2,285 common shares, n.p.v.
Of the preferred shares issued the Canadian
Pacific Ry. Co. held 3,500 and others
2,883.
Of the common issued the C.P.R.
held 1,600 and others 685.
All shares issued were fully paid up.
The hotel property was subject to a 1st mortgage to secure $600,000, 64 per cent sinking fund bonds -maturing Nov. 1, 1947.
In 1932 the interest rate was reduced to 4 per cent upon the C.P.R. undertaking to guarantee the interest at the new rate until the maturity of the bonds.
In consideration thereof a 2nd mortgage was given the
C.P.R. on which at the time this action was brought there was outstanding $241,500.
At the 1946 shareholders annual meeting the question of providing for payment or refinancing of the maturing bonds was referred to the directors. The latter authorized C. B. Smith, the president, to discuss the matter with the C.P R. which took the position that upon the expiration of its guarantee it would take no further part in financing the hotel.
Subsequently, at the suggestion of Smith, it transferred all its shares to him for himself and his fellow directors, he undertaking to return the stock if his plan for re-financing failed. The directors, other than one Graham, then purchased on their own behalf $115,000 of the hotel bonds and the stock was divided among them. Subsequently as a result of negotiations with the C.P.R. the directors purchased the 2nd mortgage for $120,000.
1. That the action was properly brought within the principle of Menier v.
Hooper L.R. 9 Ch. 350. 2. That the respondent directors both in their acquisition of the shares and the 2nd mortgage became trustees for the hotel company and, except as to 200 preferred shares disposed of to one Guptill, liable as such to account therefor. Regal (Hastings) Ltd v. Gulliver [1942]
1 All E.R. 379; Pearson's case 5 Ch. D. 336 at 341 followed.
3. That the said shares, other than those held by Guptill, be surrendered to the hotel company, the share certificates to be delivered up for cancellation. Rowell v. John Rowell & Sons Ltd
[1912] 2 Ch. 609, applied. 4. That the 2nd mortgage be declared to be security for the sum of $120,000 only, with interest at 5 per cent per annum, the said respondents to be accountable for any additional amount received or which may be received by them.
ZWICKER
CONSORTIUM-Automobile-Collision at intersection between street car and ambulance- Liability-Claim by husband for loss of wife's services and companionship.
OTEmRs... 404
74731-21
CONSTITUTIONAL LAW-Constitutional Law - Criminal Law - Conditional Sale- Evidence - Property of innocent 3rd party forfeited under s. 21, The Opium and Narcotic Drug Act, 1929, c. 49 section valid legislation - British North America Act, 1867, as. 91(27), 92(13) - Whether conviction proved- Cr. Code 827(5), 982-Canada Evidence Act, R.S.C. 1927, c. 59, es. 12, 23, 24, 25. The original owner of a motor car sold it subject to a conditional sales contract which provided title should remain in the vendor until the purchase price was paid in full.
The owner assigned his title to the appellant, a finance company. An unpaid balance was outstanding when one R., a stranger to the transaction by which the appellant acquired title, was arrested when in possession of the car and on a summary trial before a county court judge, pleaded guilty to a charge of unlawfully selling a narcotic drug contrary to s. 4(1) (f) of The Opium and Narcotic Drug Act, 1929 (Can.) c. 49.
Following sentence by the judge, to secure forfeiture of the car under s. 21 of the Act, which provides that when a person is convicted of an offence against the Act, any motor car proved to have been used in connection with the offence shall be forfeited to Her Majesty, counsel for the Crown filed a certificate under the seal of the court, signed by the deputy court clerk certifying that R. had pleaded guilty as charged and had been sentenced. appellant objected to admission of the certificate as proof of conviction but was overruled and the car declared forfeited. A Petition of Right praying a declaration that the suppliant was the owner of the car as against the respondent, judgment for possession of the car or in the alternative the sum of $1,800, was dismissed by the Exchequer Court. On appeal to this court appellant argued that the trial judge erred: (i) In adjudging that s. 21, insofar as it operated to forfeit the appellant's motor car, was intra vires Parliament since such forfeiture was not necessarily incidental to the effective exercise of the legislative authority of Parliament over the criminal law.
(ii) In adjudging that the accused had been convicted as charged, in that such conviction was not proved by admissible evidence, and that the document which purported to establish a plea of guilty, did not do so. Held: (1)-That the forfeiture of property used in the commission of a criminal offence is an integral part of the criminal law, a subject matter of legislation by s. 91 of the British North America Act, 1867, committed to the Parliament of Canada and s. 21 of The Opium and Drug Act, 1929 is therefore intra vires Parliament. Per: Kerwin, Taschereau, Estey, and Cartwright JJ. In the circumstances of the case the conviction was sufficiently proved by the certificate which fulfilled all the requirements of s. 982 of the Criminal Code and of s. 12(2) of the Canada CONSTITUTIONAL LAW-Continued
Evidence Act. Had the objection been that it did not strictly comply with s. 23 of the latter Act, it might have been excluded, but since an adjournment could have been granted to permit the obtaining of a copy of the record, certified as contemplated by a. 23, effect should not be given to the objection raised.
Kellock J. agreed with the appellant's contention that niether s.
982 of the Code nor s. 12 of the Canada
Evidence Act were relevant but held that the certificate was within s. 23. of the latter.
Held: (2)-(Locke J. dissenting). That the conviction of R. was sufficiently proved by the certificate tendered in evidence.
Per:
Locke J. (dissenting)
.
Section 982 of the
Code has no application in civil proceedings. The provisions of s. 12 of the Canada
Evidence Act were irrevelant and the certificate did not comply with s. 23 of that
Act. The document tendered in evidence was inadmissible as proof of any fact.
Even if its acceptance had not been objected to by the appellant, the Court itself should have disregarded it. (Jaclcer v International
Cable Co. 5 T.L.R. 13). The record did not support the contention that counsel for the appellant had consented to the fact of the conviction being proved by the document. CORP.
2.-Constitutional law-Validity of municipal by-law-Prohibition to distribute pamphlets etc. in the streets without permission from chief of police-Whether interference with Freedom of Worship and of the Press- Whether criminal legislation-Statute of 1852 of Old Province of Canada, 14-15 Vict., c. 175-Freedom of Worship Act, R.S.Q.
197-By-Law 184 of City of Quebec-Noncompliance with Rule 80 of Supreme Court of Canada. By an action in the Superior
Court of Quebec, the appellant, a member of Jehovah's Witnesses, attacked the validity of a by-law of the City of Quebec forbidding distribution in the streets of the
City of any book, pamphlet, booklet, circular, tract whatever without permission from the Chief of Police. The action was dismissed by the trial judge and by a majority in the Court of Queen's Bench (Appeal
Side). In this Court the appellant declined to contend that the by-law was invalid because a discretion was delegated to the
Chief of Police. Held: (reversing the decision appealed from), that the by-law did not extend so as to prohibit the appellant as a member of Jehovah's Witnesses from distributing in the streets of the City any of the writings included in the exhibits and that the City, its officers and agents be restrained from in any way interfering with such distribution. Per Kerwin J. :-Whether or not the Freedom of Worship Act whenever originally enacted (it is now R.S.Q. 1941, c. 307) be taken to supersede the pre-Confederation Statute of 1852 (14-15 Vict.,
CONSTITUTIONAL LAW-Continued c. 175), the specific terms of the enactment providing for freedom of worship have not een abrogated.
Even though it would appear from the evidence that Jehovah's Witnesses do not consider themselves as belonging to a religion, they are entitled to "the free exercise and enjoyment of (their) Religious Profession and Worship" and have a legal right to attempt to spread their views by way of the printed and written word as well as orally; and their attacks on religion generally, and one in particular, as shown in the exhibits filed, do not bring them within the exception "so as the same be not made an excuse for licentiousness or a justification of practices inconsistent with the peace and safety of the Province", and their attacks are not "inconsistent with the peace and safety of the Province" even when they are directed particularly against the religion of most of the Province's residents.
As the by-law may have its effect in other cases and under other circumstances, if not otherwise objectionable, it is not ultra vires the City of Quebec, but since it is in conflict with the freedom of worship of the appellant, it should be declared that it does not extend so as to prohibit the appellant as a member of Jehovah's Witnesses from distributing in the streets any of the writings included in the exhibits. Furthermore, since both the right to practise one's religion and the freedom of the press fall within "Civil Rights in the Province", the Legislature had the power to authorize the City to pass such by-law. Per Rand J.:-Since the by-law is legislation in relation to religion and free speech and not in relation to the administration of the streets, and since freedom of worship and of the press are not civil rights or matters of a local or private nature in the Provinces, the subject-matter of the bylaw was beyond the legislative power of the Province. Per Kellock J.:-The by-law is ultra vires as it is not enacted in relation to streets but impinges upon freedom of religion and of the press which are not the subject-matter of legislative jurisdiction under s. 92 of the B.N.A. Act. Per Estey J.:-Since the right to the free exercise and enjoyment of religious profession and worship is not a civil right in the province but is included among those upon which Parliament might legislate for the preservation of peace, order and good government, s. 2 of c. 307 of the Revised Statutes of Quebec, 1941, could not be enacted by the province under any of the heads of s. 92 of the B.N.A. Act. By-law 184 is legislation in relation to and interferes with that right; it is therefore in conflict with the Statute of 1852 and authority for its enactment could not be given to the City by the Legislature. Even if a. 2 of c. 307 was intra vires, the by-law would be in conflict therewith and, therefore, could not be competently passed by the City because it was not authorized by the terms of its charter. Per [2 S.C.R. CONSTITUTIONAL LAW-Continued
Locke J.:-The belief of the Jehovah's
Witnesses and their mode of worship fall within the meaning of the expression "religious profession and worship" in the preamble of the Statute of 1852 and in s. 2 of c. 307 of the Revised Statutes of Quebec,
1941. The true purpose and nature of the by-law is not to control the condition of the streets and traffic but to impose a censorship upon the distribution of written publications in the streets. The right to the free exercise and enjoyment of religious profession and worship without discrimination or preference, subject to the limitation expressed in the concluding words of the first paragraph of the Statute of 1852, is not a civil right of the nature referred to under head 13 of s. 92 of the B.N.A. Act, but is a constitutional right of all the people of the country given to them by the Statute of
1852 or implicit in the language of the preamble of the B.N.A. Act. The Province was not therefore empowered to authorize the passing of such a by-law restraining the appellant's right of freedom of worship.
The by-law further trenches upon the jurisdiction of Parliament under head 27 of the
B.N.A. Act.
It creates a new criminal offence and is ultra vires. Per Rinfret C.J.
and Taschereau J. (dissenting):-The pith and substance of this general by-law is to control and regulate the usage of streets in regard to the distribution of pamphlets.
Even if the motive of the City was to prevent the Jehovah's Witnesses from distributing their literature in the streets, that could never be a reason to render the by-law illegal or unconstitutional, since the City had the power to pass it: usage of the streets of a municipality being indisputably a question within the domain of the municipality and a local question.
Freedom of worship is not a subject of legislation within the jurisdiction of Parliament. It is a civil right within the provinces. The provisions of the by-law are not covered by the preamble to s. 91 of the B.N.A. Act, nor have they the character of a criminal law.
Furthermore, even if the right to distribute pamphlets was an act of worship, freedom of worship is not an absolute right but is subject to control by the province.
Per
Cartwright and Fauteux JJ. (dissenting)
:- It was within the competence of the Legislature to authorize the passing of this bylaw under its power to legislate in relation to (1) the use of highways, since the legislative authority to permit, forbid or regulate their use for purposes other than that of passing and repassing belongs to the provinces; and (2) police regulations and the suppression of conditions likely to cause disorder, since it is within the competence of the Legislature to prohibit or regulate the distribution in the streets of written matter having a tendency to insult or annoy the recipients thereof with the possible result of giving rise to disorder, and perhaps violence,
CONSTITUTIONAL LAW-Concluded in the streets. An Act of a provincial legislature in relation to matters assigned to it under the B.N.A. Act is not rendered invalid because it interferes to a limited extent with either the freedom of the press or the freedom of religion.
QUEBEC........................... CONTRACT-Contract-Hauling of logs- Negligence-Liability-Scope of exemption clause respecting damages to trucks-Whether party exempted from liability for negligence- Whether damage within scope of contract. The respondent contracted to haul all logs produced by the appellant logging company from the logging area. One of its trucks was damaged while standing in the logging area near to a spar tree of the appellant where it had been placed for loading. This spar tree was used both for yarding logs and for loading them on to the trucks. A log which the appellant was yarding hit and broke a snag with the result that the spar tree fell on the truck.
The respondent's action, claiming negligence, was met by the contention that the appellant's liability was excluded by the exempting clause of the contract which provided that: "The trucks and the personnel operating such trucks shall . . be at the risk of and the responsibility of the truckers and the truckers will provide their own insurance, pay their own workmen's compensation charges and will indemnify ... the company from any claims or damages or for any damage that may occur arising out of the use or operation of the said trucks. . . ." The action was maintained by the trial judge and by the Court of Appeal for British Columbia. negligence of the appellant was not contested in this Court.
Held: (Kellock and Locke JJ. dissenting), that the appeal should be dismissed. Per: Rand J.: On the principle followed in Canada Steamships Company v. The King [1952] 1 All E.R. 305, as the exempting clause can be satisfied reasonably by reference to an area not touching the negligence of the company, its language is not to be read as extending to that negligence. Furthermore, the accident arose out of work carried on exclusively by the company and therefore outside the scope of the contract. Per: Estey and Cartwright JJ.: The reciprocal obligations contracted by the parties had to do with the loading, hauling and dumping of the logs. The operation in the course of which the truck was negligently damaged had nothing to do with the operation of loading the truck; it was therefore not within the four corners of the contract and the exempting clause did not apply. On the assumption that the words of the clause should apply to the negligence of the appellant in matters within the contract, clear words would be necessary to cover damage caused by negligence in an operation carried on outside the contract. Per: Kellock and Locke JJ. CONTRACT-Concluded
(dissenting): Effect can be given to all of the language of the exempting clause only by construing it as covering damage or injury to trucks or drivers caused by the negligence of the appellant as well as to damage to the person or property of third persons caused by reason of the operation of the trucks. As the damage arose within the scope of the contract, the appellant should be exempted from liability.
RIvER v.
...........
COPYRIGHT - Copyright - Infringement-Performance by fraternal organization of copyrighted musical work in public dance hall-Whether performance "in furtherance of" a charitable object within meaning of exemption clause, a. 17 of the Copyright Act- The Copyright Act, R.S.C. 1927, c. 32, s. 17 as amended by 1988 (Can.) c. 27, s. 5. The second provisio to s. 17 of the Copyright
Act, 1927, R.S.C., c. 32, as amended by
1938 (Can.), c. 27, s. 5, provides that no charitable or fraternal organization shall be held liable to pay any compensation to the owner of any musical work or to any person claiming through him by reason of the public performance of any musical work in furtherance of a religious, educational or charitable object. The respondent, a fraternal organization, carried on various social charitable and benevolent activities and as a means of raising funds for them, operated a dance hall.
The appellant, the holder of the performing rights in certain musical compositions, sued the respondent for infringement, alleging that the respondent without its consent had performed or permitted to be performed the compositions in public in its dance hall. The respondent pleaded that it was a charitable or fraternal organization and that any public performance as alleged by the appellant was in furtherance of a charitable object and it specifically pleaded s. 17 of the Act as amended. The action was dismissed by the
Exchequer Court of Canada.
F erformance of a musical work to be "in urtherance of" a charitable object within the meaning of the exemption contained in the second proviso of s. 17 of the Copyright
Act, must be a participating factor in the charitable object itself or in an activity incidental to it, for the purpose of which the object may consist of component parts of a cognate character; but it could not be said to be so associated with the object here by its role in the ordinary business entertainment of a dance: there being neither a participation in the object nor in anything incidental to it. Decision of the Exchequer
Court of Canada (1952] Ex. C.R. 162, reversed. AuTHoRs Pus- Ass.
TORONTO..........
.............
2- Practice - Exchequer Court - Copyright - Infringement - Writ of Summons
-Service of Notice out of jurisdiction - COPYRIGHT-Concluded
Whether an Exchequer Court interlocutory judgment includes an order-Whether English 0.11 applies-The Exchequer Court Act, R.S.C. 1927, c. 34, s. 75, 82 (1) (b) as amended-Rr. 42, 76................ CRIMINAL
LAW-Criminal law-Evidence-Exporting to destination not authorized by permit-Entry on bill of lading made by customs officer pursuant to duty under foreign law-Whether admissible-Error and defect in notice of appeal-Export and Import Permits Act, 1947, c. 17, as. 5, 13- Criminal Code, a. 1018(2).
The appellant was charged with having exported tin plate from Canada to an ultimate destination not authorized by his permit for the export, issued under the Export and Import Permits Act, 1947, c. 17.
The goods were to be shipped from Montreal to New York for furtherance to a South American country. The evidence consisted of a customs bill of lading, produced from the records of the Collector of Customs at New York, on which a signed entry was endorsed to the effect that the goods had been shipped from the United States destined to a European country. The bill had been prepared for admittance of the goods to the United States and was required by the law of that country.
Held: As to counts other than 6 and 7, the document was admissible. Held further: As to counts 6 and 7, the copies of documents before the Court were improperly admitted and the appeal as to these counts was allowed.
2- Constitutional Law - Criminal Law - Conditional Sale - Evidence - Property innocent 3rd party forfeited under s. 21, The Opium and Narcotic Drug Act, 1929, c. 49- Whether section valid legislation-British North America Act, 1867, ss. 91(27), 92(18) conviction proved- Cr. Code as. 827(5), 982-Canada Evidence Act, R.S.C. 1927, c. 59, as. 12, 28, 24, 25 ......... 3- Criminal law-Trial by jury-Refusal of motion made by accused for trial by an English jury-Accused fluent in both official languages-What is language habitually spoken by accused-Criminal Code, as. 923, 924, 937, 1023. The law does not give to an accused in the Province of Quebec who moves that he be tried by a jury entirely composed of jurors speaking the French language or entirely composed of jurors speakmg the English language an unconditional right to be tried accordingly or, at least, tried by a mixed jury. His right is limited to demanding trial by a jury skilled in whichever of the two official languages of the Province is the language habitually spoken by him. (Cartwright J., being of the view that this Court had no jurisdiction, expressed no opinion upon the question). v. TE
CROWN-Enemy, Consolidated Orders re
Trading with P.C. 1023, 1916-Purchase during 1914-18 War of shares of Canadian company from German national by German national; latter acquiring French nationality by Treaty of Versailles-Right to shares as between The Custodian and the purchaser- Treaty of Peace (Germany) Order 1920, P.C.
755 as modified by P.C. 267..........
See LAW
DAMAGES - Damages - Fatal injuries- Motor vehicle-Car stationary on highway- Approaching driver-Liability-Negligence
-Last clear chance-Trustee Act R.S.A.
1942, c. 215, c. S2. The respondent sued under the Trustee Act (R.S.A. 1942, c. 215)
as administrator of the estate of his son who was a passenger in a car and who was fatally injured when that car was hit by a truck.
The road was straight and the visibility clear. The victim was in a coma from the date of the accident to the date of his death which occurred one year later.
There was evidence that during that period he reacted only to pain from stimuli. The trial judge found the driver of the truck solely to blame and awarded $10,000 general damages.
The Court of Appeal for
Alberta upheld the finding of negligence but reduced the general damages to $7,500.
Held: Following the principle set down in
Anglo-Newfoundland Development Co. v.
Pacific Steam Navigation Co. ([1924] A.C.
406), the sole cause of the accident was the negligence of the driver of the truck. Held:
The principles to be followed in fixing damages under this head being as set down in
Benham v. Gambling ([1941]
A.C. 157), which was presumably followed in this case by the Appellate Division, the latter's adjudication should stand.
If there was anything included therein for pain and suffering, the maxim de minimus non curat lex applied.
2.-Tort
- Negligent misstatement-False report of husband and children-Whether actionable by wife-Absence of malice-Whether duty owed-Nervous shock-Whether damages recoverable............................
3.-Automobile-Collision with approaching car in snow cloud raised by snow plough on wrong side of the road-Liability-Damages-Concurrent findings as to amount of compensation for injuries............. 423
EVIDENCE-Criminal law-Evidence-Exporting to destination not authorized by permit-Entry on bill of lading made by customs officer pursuant to duty under foreign law- Whether admissible-Error and defect in notice of appeal-Export and Import Permits Act, 1947, c. 17, 5, 13-Criminal
Code, s. 1018(2).....................
EXECUTORS AND ADMINISTRATORS -Executors and Administrators-Compeneation - Passing Accounts - Appeal from Surrogate Court Judge's Order-Jurisdiction of Court of Appeal-The Surrogate Courts Act, R.S.O. 150, c. 380, s. 31 (1)- The Trustee Act, R.S.O. 1950. c. 400, s. 60(8). Where pursuant to s. 60 (3) of The Trustee Act, R.S.O., 1950, c. 400, the judge of a surrogate court in the passing of the accounts of an executor of an estate, fixes the allowance to be paid such executor, and as provided by s. 31 (1) of The Surrogate Courts Act, R.S.O., 1950, c. 380, an appeal from such award is made to the Court of Appeal, that*Court may direct further evidence to be taken before the Senior Master and upon its return, set aside the allowance made, and itself determine the amount to be paid.
TRUSTEE........................... HABEAS CORPUS - Infant - Custody- Habeas Corpus-Child left with uncle and aunt for seven years-Right of parents to custody-Interest of child-Whether parents unfit or incapable-Art. 248 C.C...... INFANT - Infant - Custody - Habeas Corpus-Child left with uncle and aunt for seven years-Right of parents to custody- Interest of child-Whether parents unfit or incapable-Art. 248 C.C. The natural right of parents to the custody of their children as sanctioned by Art. 243 C.C., is displaced where it is shown that they are unfit or incapable.
INJUNCTION-Interlocutory injunction- Whether appeal de plano to Court of Appeal from judgment setting it aside-Arts. 43, 46, 957, 961, 966 969, 1211 C.P.C. The judgment of the Superior Court of Quebec setting aside, pursuant to Art. 966 C.P.C., an interlocutory injunction granted without notice in a case where the grounds invoked for its justification exhaust all the grounds alleged in support of the action, is a final judgment within the meaning of Art. 43 C.P.C. so as to permit an appeal de plano to the Court of Queen's Bench (Appeal Side).
(Kerwin and Kellock JJ. contra). Decision a ppealed from reversed. CO. V. LABOUR BOARD............................. INTERNATIONAL LAW-Enemy, Consolidated Orders re Trading with, P.C. 1023, 1916-Purchase during 1914-18 War of shares of Canadian company from German national by German national; latter acquiring French nationality by Treaty of Versailles- Right to shares as between The Custodian and the purchaser-Treaty of Peace (German) Order 1920, P.C. 755 as modified by P.C. 267. Consolidated Orders respecting Trading with the Enemy, (P.C. 1023 of May 2, INTERNATIONAL LAW-Concluded
1916) provide by para. 6(1) that after publication of the Orders and regulations thereunder, save as to specified exceptions, no transfer by or on behalf of any enemy of any securities shall confer on the transferee any rights or remedies and, by para.
28(1), that by order of any judge of any superior court of record within Canada such securities may be vested in the Custodian. The claimant, a German national who acquired French nationality by the
Treaty of Versailles as of Nov. 1918, purchased in May and Sept. 1918 Canadian
Pacific Ry. Co. shares from a German broker in Germany. By an action brought in the Exchequer Court of Canada he sought a declaration that he was their owner and for their delivery by the respondent to him or payment in lieu thereof. The latter contended that if the claimant had purchased the shares as alleged, he had done so illegally, contrary to the above-cited
Orders and that the shares had become the respondent s property pursuant to a general vesting order made by Duclos J. on April
23, 1919 under the provisions of the said
Orders, confirmed by the Treaty of Peace
(Germany) Order 1920 and amendments.
The claimant admitted that under the decision in Braun v. The Custodian [1944]
S.C.R. 339, para. 6(1) applied to purchases from an enemy outside of Canada of shares in a Canadian company made subsequent to the publication of P.C. 1023 but argued that para. 6(1) did not apply here because
(a) It did not prohibit dealings between two parties both of whom were German nationals and, (b) By the Treaty of
Versailles the claimant had acquired French nationality as from Nov. 11, 1918. Held:
1.- That the nationality of the transferee was immaterial; Spitz v. Secretary of State for Canada [19391 Ex. C.R. 162; Braun v.
The Custodian, supra, applied. The onus was on the appellant to show that the shares purchased by him in 1918 were not owned by the enemy but, even if that were not so, there was evidence in the record that they were. 2.-That so far as s. 34(1)
of the Treaty of Peace (Germany) Order
1920 was concerned, the appellant purchased the shares when he was a German national. Furthermore, he did not acquire any title in good faith and for value in accordance with Canadian law. Judgment of the Exchequer Court of Canada, Thorson
P., dismissing the action (not reported)
affirmed.
JURISDICTION-Executors and Administrators - Compensation - Passing Accounts - Appeal from Surrogate Court
Judge's Order - Jurisdiction of Court of
Appeal - The Surrogate Courts Act, R.S.O.
150, c. 380, s. 31(1)-The Trustee Act,
R.S.O. 1950, c. 400, s. 60(3) .........
LABOUR-Certiorari-Labour Law-Powers and duties of Ontario Labour Relations Board - Certification of bargaining agent -Prior ascertainment of facts-Obligation to exercise judicial functions-The Labour Relations Act, 1948 (Ont.) c. 51-Regulations, 1948, ss. 7-10. The appellant union as provided by The Labour Relations Act, 1948, applied to the Ontario Labour Relations Board to be certified as the bargaining agent for certain of the respondent's employees, alleging the majority of them to be members of its union in good standing. At a hearing before the Board counsel for the respondent sought to crossexamine the union secretary to show that since the filing of the application a number of the employees had resigned. On the ground that this matter was irrevelant, the Board refused permission and also refused to question the witness itself, to examine the documents filed, or to order a vote of the employees in question, and granted certification. Notwithstanding that s. 5 of the Act provides that orders, decisions and rulings of the Board shall be final nor shall the Board be restrained by certiorari or otherwise by any court, respondent applied by way of certiorari to quash. Held: (Rand and Cartwright JJ. dissenting) That the Board had declined jurisdiction and that its order should accordingly be quashed. The Queen v. Marsham [1892] 1 Q.B. 371, followed. Rex v. Murphy [1922] 2 I.R. 190, distinguished.
Decision of the Court of Appeal for Ontario
O.R. 345, affirmed.
2.-Labour Law
Certiorari Collective Bargaining-Labour Board's Jurisdiction- Power of Court to examine proceedings--Industrial Conciliation and Arbitration Act, R.S.B.C., 1948, c. 155, s. 2(1) "employee", exception (s)2(1) (a) "person employed in a confidential capacity"-ss. 2(4), 58(1). The appellant applied under the Industrial Conciliation and Arbitration Act, R.S.B.C., 1948, a. 155, to the Labour Relations Board for certification as bargaining agent for certain office employees, the majority of whom were comptometer and power machine operators of the respondent. latter opposed the application and upon the Board granting certification, sought by way of certiorari to quash the Board's decision and the certification. It contended that on the face of its decision the Board lacked jurisdiction in that it had found that with few exceptions the employees in question were employed in a confidential capacity within the meaning of the exclusionary clause in the definition of "employee" in s. 2 of the Act and that therefore they were not entitled to be included in any certification. Counsel for the Board argued contra that under ss. 2(4) and 58(1) whether a person is an "employee" within the meaning of the Act is a question to be determined by the Board and its decision shall LABOUR-Continued be final. Farris C.J.S.C. heard the motion and ruled that a body of limited jurisdiction could not by an improper decision acquire jurisdiction and that the court had power to examine the proceedings to ascertain whether there was evidence before the
Board to justify its decision. Having done so, he held that there was such evidence, and dismissed the application for the writ.
His judgment was reversed by the Court of
Appeal for British Columbia which held that the Board had erred in law in the construction it placed upon the relevant definition of "employee" and since the employees in question were employed in a confidential capacity, exceeded its jurisdiction in granting certification and that in consequence ss. 2(4) and 58 of the Act did not prevail to prevent the court from exercising its authority to review, in this circumstance, the decision of the Board as an inferior tribunal.
Held: That there was evidence before the
Board to justify its conclusion that the comptometer and power machine operators were not employed in a confidential capacity within the meaning of s. 2(1) (a) of the Act.
Rinfret C.J. and Kellock J., dissenting, agreed with the conclusions of the court below. Decision of the Court of Appeal for
British Columbia, (1952-53)
7 W.W.R.
(N.S.) 145 reversed, and judgment of Farris
C.J.S.C., (1952) 6 W.W.R. (N.S.)
510, restored. (B.C.)
v. LTD............
3.-Trade Unions-Certification-Labour
Relations Board's discretion to refuse certification-Apprehension of Communistic influence-The Trade Union Act, 1947 (N.S.), c. 3, ss. 2, 7, 8, 9-The Interpretation Act,
1923, R.S.N.S., c. 1, ss. 22 (1), 23 (11).
The local of a trade union applied under the
Trade Union Act, 1947 (N.S.) c. 3, to the
Labour Relations Board for certification of the Union as its bargaining agent. The
Board found a prima facie case for certification made out but found further that the secretary-treasurer of the Union, who had organized the local and as its acting secretary-treasurer signed the application, was a
Communist and exercised a dominant influence in it. On this ground it refused certification. The respondent appealed to the
Supreme Court of Nova Scotia in banco for a writ of mandamus which was granted.
The company-employer appealed.
(Taschereau, Cartwright and Fauteux JJ.
dissenting):-That the appeal should be dismissed. Per: Kerwin, Taschereau, Rand,
Estey, Cartwright and Fauteux JJ.-The word "may" in s. 9(2) of the Trade Union
Act is to be interpreted as permissive and connoting an area of discretion.
McHugh v. Union Bank [1913] A.C. 229, applied.
Per: Kerwin, Rand and Estey JJ.-The
Board in rejecting the application exceeded the limits of its discretion since it was not empowered by the statute to act upon the view that official association with an indi- LABOUR-Continued vidual holding political views considered dangerous by the Board proscribed a labour organization. Before such association would justify the exclusion of employees from the rights and privileges of a statute designed primarily for their benefit, there must be some evidence that with the acquiescence of the members, it had been directed to ends destructive of the legitimate purposes of the Union. Per: Kellock J.-The plain implication of s. 9(g) is that if the Board is satisfied with the application from the standpoint of the considerations the Statute itself sets forth the Union is entitled to be certified. Per: Taschereau, Cartwright and Fauteux JJ. (dissenting) The Board exercised its discretion on sufficient grounds. Rex v. London County Council 2 K.B. 466, referred to.
& 4-Labour - School teachers on strike - Revocation of certificate of representation - Union not notified of hearing of Labour Board-Whether writ of prohibition proper remedy - Judicial function of Board - Whether revocation null-Public Services Employees Disputes Act, R.S.Q. 1941, c. 169 -Labour
Relations Act, R.S.Q. 1941, c. 162A-Public Inquiry Commission Act, R.S.Q. 1941, c. 9-Articles 50, 82, 1008 C.P. The appellant called a strike of its members in violation of the Public Services Employees Disputes Act (R.S.Q. 1941, c. 169), which forbids such action from the employees of a school corporation.
Thereupon, the respondent, acting ex parte and without notice to the appellant, invoked s. 41 of the Labour Relations Act (R.S.Q. 1941, c. 162A) and cancelled the appellant's certificate of representation.
A writ of prohibition taken by the appellant and in which it asked for a declaration of nullity, was maintained by the Superior Court and rejected by the Court of Appeal for Quebec.
appeal should be allowed; the respondent acted without jurisdiction and the revocation of the appeallant's certificate of representation was null and of no effect. Per Rinfret C.J.: Having acted as a judicial tribunal, the Board must be assimilated to a court of inferior jurisdiction within the meaning of s. 1003 of the Code of Civil Procedure, and was therefore subjected to the writ of prohibition.
The Board acted without jurisdiction and the writ of prohibition was the proper remedy to prevent the execution of its decision. An express declaration from the legislator is required to prevent the application of the principle that no person can be condemned or deprived of his rights without beiig heard. S. 17 of the Public Inquiry Commission Act (R.S.Q. 1941, c. 9) does not apply to the Board and cannot be invoked to prevent the prohibition against a decision rendered without jurisdiction. Per Kerwin and Estey JJ.: Notwithstanding that s. 41 of the Labour Act does not in terms require it and notwithstanding s. 50 of that Act, the LABOUR-Concluded respondent was bound to give notice to the appellant before cancelling its certificate, even though an illegal strike had been called.
The appellant was entitled to a declaration of nullity and was authorized to join a claim for such relief to a demand for prohibition. Per Rand J.: The provisions of the Labour Relations Act are incompatible with authority to revoke the certificate solely on the ground that there had been a violation of a penal provision of the statute.
Although an administrative body, the
Board in making decisions of a judicial nature, as it did here, was bound by the maxim Audi Alteram Partem. Prohibition would be futile in the present case since the Board's action was exhausted by the revocation, but the proceeding can still be maintained for there is nothing in the articles of the Code of Civil Procedure against the maintenance of the finding, necessarily involved in such a proceeding, that the act challenged was beyond the jurisdiction of the Board. Per Fauteux J.:
In revoking the certificate of the appellant, the Board acted as a judicial tribunal and therefore should have heard the appellant or at least given him the opportunity to be heard.
The application of the principle
Audi Alteram Partem is implied in the statutes giving judicial powers to administrative bodies and to suspend its application an explicit text or equivalent inference must be found in the statute. There is here no such text nor does a comparison of s. 41 of the Labour Act with s. 50 justify the inference that the legislator clearly intended to make an exception.
Since there is nothing incompatible in the joining of a claim of nullity for lack of jurisdiction to a request for prohibition, the appellant is entitled to an adjudication on the question of nullity, even on the assumption that prohibition was not the pro er remedy.
MONTR9AL V. QUEBEc RELA- TIONs BOARD...................
LEASE-Option to lease-Minerals-Variation between lease and terms of option- Whether option binding.
The respondent signed a 30 days option to lease certain mineral rights to the appellant for a term of ten years, with a bonus payable on completion of the option.
The appellant tendered the bonus payment and at the same time submitted for the signature of the respondent a form of lease containing provisions contrary to the terms of the option.
The tender was refused.
trial judge found the option to be binding but the Court of Appeal for Alberta held that the tender was conditional and that the option had ceased to exist. Held: The appeal should be dismissed. The evidence showed that the tender was not within the terms of the option.
Per: Kerwin and
Fauteux JJ. The principles of Pierce v.
Empey S.C.R. 247 apply to an option for a lease. V. .....
MUNICIPAL
CORPORATION-Constitutional law-Validity of municipal by-law -Prohibition to distribute pamphlets etc. in the streets without permission from chief of police-Whether interference with Freedom of Worship and of the Press-Whether criminal legislation-Statute of 1852 of Old Province of Canada, 14-15 Vict., c. 175- Freedom of Worship Act, R.S.Q. 1941, c. 307-B.N.A. Act, ss. 91, 92, 98, 127-By- Law 184 of City of Quebec-Noncompliance with Rule 80 of Supreme Court of Canada 299 NEGLIGENCE-Contract- Hauling of logs -Negligence-Liability-Scope of exemption clause respecting damages to trucks-Whether party exempted from liability for negligence- Whether damage within scope of contract. 2.-Automobiles-Negligence-Mother fatally injured while riding in police car following ambulance conveying injured child to hospital-Liability of city where no gross negligence-Whether deceased transported as a passenger in the ordinary course of the business of the city-Motor-vehicle Act, R.S.B.C. 1948, c. 227, s. 82(b)....... 3.-Damages-Fatal injuries-Motor vehicle - Car stationary on highway - Approaching driver-Liability - Negligence - Last clear chance-Trustee Act, R.S.A. 1942, c. 215, c. 32....................... 177 4.-Tort
- Negligent misstatement-False report of death of husband and children-Whether actionable by wife-Absence of malice--Whether duty owed-Nervous shock-Whether damages recoverable.......*.................. 216 Tort - Newspaper-Negligent misstatement-False report of death of husband and children- Whether actionable by wife-Absence of malice-Whether duty owed-Nervous shock damages recoverable. respondent published in one issue of its daily newspaper printed in Vancouver, a news item stating that the appellant's husband and their three children had been killed in an automobile accident in Ontario where they were living. No such accident had taken place but the appellant read the item and claimed that the resulting shock affected her health. The respondent could not explain its publication. The appellant claimed dmages for negligence and did not allege fraud or malice or the existence of any contractual relationship.
The action was maintained by the trial judge but dismissed by a majority in the Court of Appeal for British Columbia. Held: (Rinfret C.J. NEWSPAPER-Concluded and Cartwright J. dissenting), that the appeal and the action should be dismissed.
Per Kerwin J.: Since there was no duty in law owed by the respondent to the appellant, the former could not be held liable in negligence for the shock and impairment in health suffered by the appellant as a result of reading the report. The appellant was not a "neighbour" of the respondent within the meaning of Lord Atkin's statement in Donoghue v. Stevenson ([19321 A.C.
562), since she was not a person so closely and directly affected by the publishing of the report that the respondent ought reasonably to have had the appellant in contemplation as being affected injuriously when it was directing its mind to the act of publishing. Per Estey J.: Assuming that the respondent owed a duty to the appellant to exercise reasonable care to verify the truth of the report, because injury would be forseeable to a reasonable person, the appellant cannot succeed since the evidence does not establish that she suffered physical illness or other injury consequent upon shock or emotional disturbance caused by a reading of the report.
Per Locke J.:
Since it was conceded on behalf of the appellant that the respondent had acted without malice in publishing the article believing the statements made to be true, there was no cause of action, even though the respondent had acted carelessly in failing, before publication, to make adequate inquiries as to their truth, and damage has resulted.
Dickson v. Reuter's Telegram Co. (1877)
L.R. 3 C.P. 1; Derry v. Peek (1889) 14 App.
Cas. 366; Nocton v. Ashburton [1914] A.C.
932; Angus v. Clifford 11891] 2 Ch. D. 449;
Le Lievre v. Gould [1893] 1 Q.B. 491; Balden v. Shorter [1933] 1 Ch. 427 and Chandler v.
Crane [1951] 2 K.B. 164. Nothing decided in Donoghue v. Stevenson [1932] A.C. 562 affected the question to be determined.
Per Rinfret C.J. and Cartwright J. (dissenting)
: There is no analogy between the present case and an action for damages for misrepresentation or for injurious falsehood;
the present case is analogous to a case in which the respondent has unintentionally but negligently struck the appellant or caused some object to strike her.
respondent, as a reasonable man, should have foreseen the probability of the appellant reading the report and suffering injury as a result. (Donoghue v. Stevenson [1932]
A.C. 562 and Hambrook v. Stokes Bros. [1925]
1 K.B. applied). Therefore a duty rested upon the respondent to check the accuracy of the report before publishing it. 2. The respondent failed in that duty. 3. The appellant can recover damages for nervous shock even though there was no physical impact (Hay or Bourhill v. Young [1943]
A.C. 92). 4. The evidence as to damages does not warrant an interference with the assessment made by the trial judge.
Co. LD......... 216
OPTION-Option to lease-Minerals-Variation between lease and terms of option- Whether option binding. The respondent signed a 30 days option to lease certain mineral rights to the appellant for a term of ten years, with a bonus payable on completion of the option. The appellant tendered the bonus payment and at the same time submitted for the signature of the respondent a form of lease containing provisions contrary to the terms of the option. The tender was refused.
The trial judge found the option to be binding but the Court of Appeal for Alberta held that the tender was conditional and that the option had ceased to exist. Held: The appeal should be dismissed. The evidence showed that the tender was not within the terms of the option. Per: Kerwin and Fauteux JJ. The principles of Pierce v. Empey [1939] S.C.R. 247 apply to an option for a lease. CONNORS......................... PARTNERSHIP - Partnership - Cancellation of contract forming object by Statute-Whether partnership dissolved- Statute of Quebec, 1939, 8 Geo. VI, c. 69- Arts. 982, 984, 1200, 1892 C.C. In 1930, the respondent, Damien Boileau Ltd., having obtained a contract for the erection of buildings for the University of Montreal, entered into a partnership with Ulric Boileau Ltd., for the purpose of exploiting the contract and any other which might be obtained from the University within thirty months following.
In 1934, when the University suspended the work, the partnership agreement was amended to embrace all works which could be executed by either of the partners up to October 1943. In 1939, the Legislature of Quebec, by 3 Geo. VI, c. 69, cancelled all construction agreements into which the University had entered and vested all assets of the latter in a new corporation. In November 1939, the new corporation entered into a contract for the completion of the University buildings with the respondent Damien Boileau Ltd. which the respondent executed without reference to Ulric Boileau Ltd. The appellant, as trustee for Ulric Boileau Ltd., contended, in an action for rectification of the partnership accounts, that the Statute had not had the effect of dissolving the partnership and that the second contract was but a continuation of the first. Held: The appellant cannot claim any of the benefits of the second contract, since the partnership had ceased to exist in 1939. When the Statute cancelled the construction contract of 1930, the partnership, whose object was the exploitation of that contract, was left without any object. Therefore, by virtue of Art. 1892 CC., the partnership was dissolved ipso facto by the coming into force of the Statute. v. BOILEAU........................ PRACTICE - Practice - Exchequer Court - Copyright - Infringement - Writ Summons - Service of Notice out of jurisdic- PRACTICE-Concluded tion-Whether an Exchequer Court interlocutory judgment includes an order-The
82 (1) (b) as amended-Rules 42, 76. The respondent in an action for infringement of copyright applied under Exchequer Court r. 76 for leave to issue notice of a statement of claim for service outside the jurisdiction upon the appellant, a corporation incorporated under the laws of the State of
New York and having its chief place of business therein. The application was supported by an affidavit stating that in the elief of the deponent the plaintiff (respondent) had a good cause of action.
application was allowed and the appellant then, by leave granted it under s. 82(1) (b)
of the Exchequer Court Act R.S.C. 1927, c.
34, as amended by 1949, c. 5, s. 2, appealed on the grounds that the court below had erred in applying Falcon v. Famous Players
Film Co., had proceeded upon a wrong principle, and that the material relied upon was not sufficient to entitle an order to be made.
Held: 1. That an "interlocutory judgment", within the meaning of s. 82(1) (b) of the Exchequer Court Act, includes an order and therefore there was jurisdiction to hear the appeal.
(Taschereau and Rand JJ. expressing no opinion), that the combined effect of s.
75 of the Act and of rr. 76 and 42 is to make applicable 0. 11 of the Supreme
Court of Judicature in England.
(Kerwin and Taschereau JJ. dissenting), that the evidence adduced in support of the application was not sufficient to establish that the case was a proper one for service outside the jurisdiction.
Vitkovice
Horni A Hutni Tezirsto v. Korner [1951]
A.C. 869 referred to.
Falcon v. Famous
Players Film Co. [1926] 1 K.B. 393; [1926]
2 K.B. 474, distinguished. Decision of the
Exchequer Court (not reported), reversed.
......
2- Constitutional law-Validity of municipal by-law--Prohibition to distribute pamphlets etc. in the streets without permission from chief of police-Whether interference with Freedom of Worship and of the Press- Whether criminal legislation--Statute of 1852 of Old Province of Canada, 14-15 Vict., c.
175-Freedom of Worship Act, R.S.Q.
-By-Law
184 of City of Quebec-Noncompliance with Rule 30 of Supreme Court of
Canada............................
STATUTES-1.- Accumulations
Act,
R.S.O. 1950, c. 4...................
2.-B.N.A. Act, 1867, as. 91(27), 92
(13)..........................
STATUTES-Continued
8.-B.N.A. Act,
6.- Copyright Act, R.S.C. 1927, c. 82, s.17 .............................. 7.- Criminal Code, R.S.C. 1927, c. 86, s.1018(2)......................... 8.- Criminal Code, B.S.C. 1927, c. 86, ss. 827(5), 982..................... 9.- Criminal Code, R.S.C. 1927, c. 36 ss. 928, 924, 937, 1123 .............
See 3.
10.-Devolution of Estates Act, R.S.O. 1950, c. 103,s.29................... 11.-Dominion-Provincial Tax Rental Agreement Act, 1947, c. 58, s. 3 ....... See 3.
12.-Excess Profits Tax Act, 1940 c. 82.........
...................
13.-Excess Profits Tax
Act, c.32 .............................. 14.-Excess Profits Tax Act, 1940, c. 32 ................................ See 3.
* * ** *136 19.-Income War Tax Act, B.S.C. 1297, c. 97, s. 6(1) (w).................. See 3.
STATUTES-Concluded
20.-Income War Tax Act, R.S.C. 1927, c.97..............................
21.-Income Tax Act, S. of C. 1948 ,c.
52, as. 86, 127-....................
22.-Industrial Conciliation and Arbitration Act, R.S.B.C. 1948, c. 155, 22, 58. 46
23.-Interpretation Act, R.S.N.S. 1923, c. 1, ss.22(1), 28(11)...............
24.-Interpretation Act, R.S.C. 1927, c.1,
8.20..........................
See 3.
25.-Labour Relations Act, 1948 (Ont.),
C.51 ..............................
26.-Labour Relations Act, R.S.Q. 1941, c. 162A ............................
See 4.
27.-Motorvehicle Act, R.S.B.C. 1948, c. 227, s. 82(b).....................
28.-Opium and Narcotic Drug Act, 1929,
S. of C., c. 49, s 21..................
29.-Public Inquiry Commission Act,
R.S.Q. 1941, c. 9...................
See 4.
30.-Public Service Employees Disputes
Act, R.S.Q. 1941, c. 169..............
See 4.
31.-Statute of 1852 of Old Province of
Canada, 14-15 Vict., c. 175..........
32.-Surrogate Courts Act, R.S.O. 1950, c. 880, s. 81(1)....................
33.-Succession Duty Act, 4 and 5 Geo.
VI (Can.), c. 41, as. 4(1), 31 ........
34.-Trade Union Act, 1947 (N.S.), c. 8,
8s.2, 7, 8,9......................
35.-Trustee Act, R.S.O. 1950, c. 400, s.60(3)...........................
36.-Trustee Act, R.S.A. 1942, c. 215, e.89..............................
SUCCESSION-Succession-Effect of will giving income from residue with power to draw from capital-Whether general power of appointment-Whether dutiable succession-Dominion Succession Duty Act, 4 and 5 Geo. VI, c. 4, ss. 4 (1), 81. By her will the testatrix left her estate to her trustees to pay to her husband during his lifetime the income from the residue and "in addition thereto to pay to my said husband from time to time and at any time such portion of the capital of my estate as he may wish or require and upon his simple demand, my husband to be the sole judge as to the amount of capital to be withdrawn by him and the times and manner of withdrawing the same, and neither my said husband nor my executors and trustees shall be obliged to account further for any capital sums so paid to my said husband". Upon the death of the husband, the trustees were to dispose of what was left of the capital among designated legatees.
The minister took the position that the will conferred a general power of appointment upon the husband over the residue of the estate and that consequently he became by virtue of s. 31 of the Dominion Succession Duty Act liable to duty on the same basis as if the residue had been absolutely bequeathed to him. The Minister's assessment was upheld by the Exchequer Court of Canada. (Rinfret C.J. and Locke J. dissenting), that the appeal should be allowed and the assessment set aside; the dutiable value of the succession to the husband in respect of the residuary estate of the testatrix was the value as of the date of her death of the estimated net revenues from such residuary estate and the residuary legatees were assessable as having on the death of the testatrix become beneficially entitled to the capital of the residue in remainder expectant upon the death of the husband, subject to the appropriate adjustment due to his having received a certain amount from the capital. Per Estey J.: Assuming that the testatrix created a general power of appointment, it would still appear that no duty upon or in respect to a succession can be imposed to her husband except as to what he has already received from the capital. The giving of a general power of appointment at common law did not of itself constitute a disposition of property. The Succession Duty Act does not provide that it constitute a "disposition of property", that is to say, a succession as defined in s. 2(m). It is not included under s. 3(1) which defines those dispositions of property which should be deemed a succession. S. 31 does not contain language that would constitute such a power a disposition of the property.
On the contrary, Parliament, in that section, would appear to have accepted the common law in relation to dispositions under a general power. Throughout s. 31, there are no words appropriate to the imposition of a levy that would justify a conclusion that this is a charging 1953]1
SUCCESSION-Concluded section. Per Cartwright and Fauteux JJ.:
The testatrix's husband was not given the power to appoint the capital by will; and even on the assumption that he was given a general power to appoint the capital inter vivos, there is no provision in the statute to support the claim that he was liable to pay succession duty in respect of that part of the residuary estate which he did not receive and which upon his death passed under the will of the testatrix to the residuary legatees. S. 31 of the Act does not purport to levy any duty or to create or define a succession.
It provides only for the manner and time of payment of duty which is assumed to be levied by other provisions.
Applying the words of s. 2(m) of the Act, the husband did not become beneficially entitled to the capital of the estate.
A person who is given a power over property does not thereby become beneficially entitled to such property.
In the present case, the residuary legatees immediately on the death of the testatrix took not a contingent but a vested remainder in the capital, expectant on the death of the husband, subject to be divested in whole or in part by his exercise of the power to take during his lifetime such portions of the capital as he might wish.
So far as the capital of the residue was concerned no part of it became vested in him upon the death of the testatrix or under any disposition made by her. Per Rinfret C.J. (dissenting):
The right given to the husband to draw the capital was a general power to appoint equivalent to a bequest of the whole property of the testatrix to her husband an s. 31 of the Act covers a situation of that kind. It might even be said that within the definition of s. 2(m), the husband succeeded to the whole of the property of his wife. Per Locke J. (dissenting): The right which accrued to the testatrix's husband upon her death to require the trustees of the estate at any time to pay to him the whole or any part of the capital of the estate, made him competent to dispose of the capital of his wife's estate (Re Penrose
[1953] 1 Ch. 793: Re Parsons [19421 2
A.E.R. 496); it therefore gave him a beneficial interest in the property and this disposition by the will was a succession within the meaning of s. 2(m) of the Act. Furthermore, the will gave to the husband a general power of appointment within the meaning of s. 4(1) and s. 31 (Re Richards [1902] 1
Ch. 76: Re Ryder [1914] 1 Ch. 865: 25
Halsbury 516); consequently, under s. 31, the liability for duty attached as if the capital of the estate over which the power had been given had been the subject of the bequest.
TAXATION - Taxation - Excess profits-Sale of timber land by lumber company - Whether profits assessable - TAXATION-Continued
Whether in the course of carrying on the business of dealing in timber limits - Was the sale part of the business carried on- Excess Profits Tax Act, 1940. The appellant was incorporated in 1893 by memorandum of association under the British Columbia Companies Act 1890, and re-incorporated in 1902 under the Companies Act, 1897. The declared objects of the company included the acquisition of timber lands, leases of such lands and licences to cut timber and turning the same to account, and of saw mills and other mills and factories for the manufacturing of lumber and lumber products, and of water rights for such purposes. The portion of the memorandum in which the objects were defined included the power to sell or otherwise dispose of the properties of the company. The company acquired extensive areas of timber lands in the Clayoquot and Nootka Districts on the West Coast of Vancouver Island, some of which were Crown granted and some held under timber leases from the Crown. In the year 1906 a lumber mill was built in the Clayoquot District and manufacturing commenced but, proving unprofitable, the operation was closed down at the end of 1907. Thereafter the lumber mill was kept in repair, surveys were made for the purpose of ascertaining the most profitable means of turning to account the timber upon the company's holdings, water rights were acquired and the preliminary work done for the construction of a dam for the purpose of utilizing such rights. In the year 1942 the mill had been dismantled on the order of the Machinery Controller of Canada and the machinery sold. According to the evidence, it had been the intention of those controlling the company since the year 1902 to utilize the timber limits for the manufacture of cedar lumber in a location in the Clayoquot District. In 1946 the company sold the greater part of its holdings in the Nootka area and was assessed under the Excess Profits Tax Act 1940 for the profit made upon the sale. Held: The evidence disclosed that the business carried on and intended to be carried on by the company had not at any time been that of purchasing and selling timber lands or interests in such lands but that of manufacturing cedar lumber from the properties in a mill to be operated in the Clayoquot District: that the sale was of a capital asset which was not required and did not fit in to the company's plans for the operation of its main properties and the profit resulting from the sale was not assessable to Excess Profits Tax under the Act.
Anderson Logging Co. v. The King [19251 S.C.R. 45 distinguished.
Commissioner of Taxes v. The Melbourne Trust Ltd. [1914] A.C. 1001 and California Copper Syndicate v. Harris (1904) 5 T.C. 159 referred to.
TAXATION-Continued
2-Taxation - Excess profits
- Dealings in real estate carrying on a business - Income War Tax
Act, 1927, c. 97-Excess Profits Tax Act,
1940, c. 82.
The appellant was assessed for income and excess profits tax in respect of the years 1943, 1944 and 1945, on profits made from a number of purchases and sales of real estate. She was a partner in a meat business but testified that since 1930 she had, out of her savings, purchased from time to time a number of properties which she sold soon thereafter; that since 1940 she had capital gain in view in making these purchases. The terms of sale in most cases called for a small down-payment and for balance in monthly instalments. She contended that these were capital profits but the assessment was upheld by the Exchequer Court of Canada.
appeal should be dismissed.
number of transactions entered into by the appellant and, in some cases, the proximity of the purchase to the sale amounted to a carrying on of a "business" within the meaning of the Excess Profits Tax Act. Held:
further: Nothing has been shown to indicate any error in the method of assessment adopted by the respondent.
3-Revenue-Excess Profits Tax-Income
Tax-Deduction from income of portion of amount paid under provincial Corporation
Tax Act attributable to logging operations- Excess Profits Tax Act, 1940 (Can.) 1940
(2nd Sess.) c. S2-Income War Tax Act,
R.S.C. 1927, c. 97 as amended, s. 5(1) (w)- The Dominion-Provincial Tax Rental Agreements Act, 1947, c. 68, s. 3-P.C. 381, Jan.
30, 1948 as amended by P.C. 95.-Interpretation Act, R.S.C. 1927, c. 1, s. 20. The appeals of the two appellant companies were argued together. The one carried on in the Province of Ontario, the other in
Quebec, the business of manufacturing pulp and paper and as an incident thereto, ogging operations. Each in filing Income and Excess Profits tax returns for the year
1947, deducted from its income that portion of taxes it paid under the relevant provincial
Corporation Tax Act, it attributed to its logging operations, claimed such allowance by virtue of 5(1) of the
Income War Tax, R.S.C. 1927, c. 97 and
P.C. 331 as amended by P.C. 952.
deductions were disallowed by the Minister, but no appeal to the Exchequer Court,
Cameron J., held that a taxpayer engaged in an integrated business, such as the respondents, had the right to apportion his income as between logging and other operations and claim a deduction for the provincial tax paid in respect thereof.
Held: (Kerwin and Cartwright JJ. dissenting).- That the type of taxation to which s. 5(1)(w) was directed was provincial taxation specifically imposed on income from mining or logging operations and had
TAXATION-Continued no reference to general provincial taxes income. Per: Kerwin and Cartwright JJ., (dissenting, agreed with the trial judge).- The amount which the respondent claimed to be entitled to deduct from its taxable income was imposed by way of tax income and the income upon which this amount of tax fell was derived from logging operations.
It would be a forced construction of the clause to hold that it had no operation in the case of a tax on income which in fact fell upon income derived from logging operations merely because it also fell on the income of the taxpayer from other sources. Judgments of the Exchequer Court of Canada Ex. C.R. 68 and 75 set aside and assessment restored. 4-Taxation-Income and excess profits tax-Investment trust business by company profits on securities lying passive in its hands taxable-Income War Tax Act, R.S.C. 1927, 97.
The respondent's business consisted of the sale of certificates representing fractional interests in Trust Shares issued by the Royal Trust Co. against "blocks" or "units" of American and Canadian securities deposited with by the respondent. These certificates could be purchased outright or by periodic payments.
The holder of these certificates could exchange them for Trust Shares which in turn could be disposed of on the market.
Fees were charged by the respondent on these transactions. During the taxation years in question, the respondent was unable to buy the American securities required to create new "blocks" or "units" against which further Trust Shares could be issued.
Consequently, in order to be able to make further sales of certificates and to meet the requirements of deferred sales already made, the respondent was forced to re-purchase Trust Shares from holders desiring to dispose of them. The profits realized when these re-purchased rust Shares were sold at prices in excess of their cost to the respondent were assessed by the Minister but held to be not taxable by the Exchequer Court. Held (reversing the judgment appealed from), that the dealings in the Trust Shares were part of the respondent's business and the profits, therefore, taxable. 5-Taxation - Related corporations - Whether owners of shares are persons not dealing with each other at arm's length- Persons connected by blood relationship and marriage-Income Tax Act, 1948, S. of C. 1948, c. 52, ss. 86, 127.
One half the shares of the appellant company W. was owned by the appellant company and the other half was owned by company All the shares of company A. and company TAXATION-Concluded
S. were owned by two brothers, their brother-in-law and the son of one of the brothers. The Minister regarded all three companies as related corporations by virtue of s. 36(4) of the Income Tax Act and designated company S. to receive the benefit of the lower tax rate for the years 1949 and
1950 under s. 36(1) and companies W. and
A. to be assessed under s. 36(2).
assessment was confirmed by the Exchequer
Court.
Under s. 36(4), a corporation is related to another if one of them owned directly or indirectly 70 per cent or more of all the issued common shares of the capital stock of the other, of if 70 per cent or more of all the issued common shares of each are owned directly or indirectly by (i)
one person, (ii) two or more persons jointly, or (iii) persons not dealing with each other at arm's length, one of whom owned directly or indirectly one or more of the shares of each of the corporations.
Held: (Estey J.
dissenting), that company W. was not related to either company A. or company
S. as neither company owned directly or indirectly 70 per cent of the shares of company W.; nor were 70 per cent of the shares of company W. owned directly or indirectly by one person or by two or more persons jointly; and even though companies
A. and S. were persons not dealing with each other at arm's length, neither of them owned any shares in the other. Per
Curiam: Companies A. and S. were related corporations within the meaning of s.
36(4) (b) (iii), since the shares of both, being owned by persons connected by blood relationship or marriage, were owned by persons not dealing with each other at arm's length. Per: Taschereau, Locke and
Fauteux JJ.: The two brothers and the son were connected by blood relationship since they stood in lawful descent from a common ancestor (In re Lanyon [1927] 2 Ch. 264).
and the brother-in-law, since he was married to a sister of the two brothers, was connected with them by marriage within the meaning of s. 127(5)(c). Per Carthwright J.: To be deemed by s. 127 (5) (b) not to deal with each other at arm's length, corporations must be controlled by the same person; it is not sufficient that they are controlled by the same group of persons. Per Cartwright J.:
Shareholders, either individually or collectively, do not have any ownership direct or indirect in the property of the company in which they hold shares. &
TORT - Tort - -Negligent misstatement-False report of death of husband and children-Whether actionable by wife-Absence of malice- Whether duty owed-Nervous shock-Whether damages recoverable..................
TRADE UNION-Trade Unions-Certification-Labour Relations Board's discretion to refuse certification-Apprehension of Communistic influence-The Trade Union Act, 1947 (N.S.), c. 8,
2s
9, 7 8 9-The Interpretation Act, 1998, R.S..b., c. 1, 8s. 22 (1), (11).
The local of a trade union applied under the Trade Union Act, 1947 (N.S.) c. 3, to the Labour Relations Board for certification of the Union as its bargaining agent. The Board found a prima facie case for certification made out but found further that the secretary-treasurer of the Union, who had organized the local and as its acting secretary-treasurer signed the application, was a Communist and exercised a dominant influence in it. On this ground it refused certification. respondent appealed to the Supreme Court of Nova Scotia in banco for a writ of mandamus which was granted.
The companyemployer appealed.
Held: (Taschereau, Cartwright and Fauteux JJ. dissenting):- That the appeal should be dismissed. Per: Kerwin, Taschereau, Rand, Estey, Cartwright and Fauteux JJ.-The word "may" in s. 9(2) of the Trade Union Act is to be interpreted as permissive and connoting an area of discretion. McHugh Union Bank [1913] A.C. 299, applied.
Per: Kerwin, Rand and Estey JJ.-The Board in rejecting the application exceeded the limits of its discretion since it was not empowered by the statute to act upon the view that official association with an individual holding Solitical views considered dangerous by the oard proscribed a labour organization. Before such association would justify the exclusion of employees from the rights and p rivileges of a statute designed primarily or their benefit, there must be some evidence that with the acquiescence of the members, it had been directed to ends destructive of the legitimate purposes of the Union. Per: Kellock J.-The plain implication of s. 9(2) is that if the Board is satisfied with the application from the standpoint of the considerations the Statute itself sets forth the Union is entitled to be certified. Per: TCaschereau, Cartwright and Fauteux JJ. (dissenting) The Board exercised its discretion on sufficient grounds. Rex v. London County Council [1915] 2 K.B. 466, referred to.
& v. THE QUEEN...................... WILLS-Will-Executors directed to carry on business-Annuities to be paid out of net profits, surplus accumulated-Reserve set up for depreciation-Whether on sale of business reserve an accumulation of profits under the Accumulations Act, R.S.O. 1950, 4. R., a newspaper owner, by his will authorized his trustees to carry on the business and hold all the real and personal property connected therewith until sold. Out of the net annual income properly divisible as profits, annuities were to be paid to his widow and his two sons and the Hospital for Sick Children, the remainder, WILLS-Continued if any, to be invested and accumulated.
Upon the death of the survivor of the widow and the two sons the business was to be sold and the proceeds and all the remainder of the residue of the estate was to be paid to the Hospital. R. died in 1918, and his widow in 1947, predeceased by the two sons.
In carrying on the business the trustees set up a reserve for depreciation with respect to the plant and the buildings and upon the sale of the property the next of kin claimed such write-offs were subject to the provisions of the Accumulation Act and that the amount realized by the sale showed them to have been excessive to such an extent that the whole amount so written off should be considered as income to which they were entitled. Held: The reserve was not an accumulation within the meaning of the Accumulations Act.
Re Crabtree
106 L.T. 49; Re Gardiner [1901] 1 Ch. 697, followed. In re Bridgewater Navigation Co.
[18911 2 Ch. 317, distinguished.
Decision of the Ontario Court of Appeal [1952] O.R.
283, affirmed.
R. TRUSTEES..........
2.-Will
- Construction - Accumulations
Direction that accumulated income of Trust
Fund be distributed in accordance with Ontario law relating to distribution of personalty upon an intestacy, among next-of-kin to be ascertained at date of distribution-Whether lineal descendant "next-of-kin"-The Devolution of Estates Act, R.S.O., 1950, c. 103, s. 29. Testator by his will directed that the residue of his estate be set up as a trust fund from the income of which a specified sum was to be paid his son R. annually for life, all income not so required to be capitalized. Upon the son's death the fund was to be divided into as many shares as there should be children surviving him or issue of such children living at his death, one such share to be set aside "in respect of"
each surviving child or deceased child leaving issue. No child or issue was to have any other or greater interest in any share than such as should be "expressly given"
to him. Out of the net income each child to be of his share paid a certain sum per annum and each issue out of his share or equal part of a share the same sum. The excess income was to be added to the capital of the shares. On the death of any child of
R. the son surviving him the share attributed to the child with any accumulated income was to go as he or she might by will direct and failing such direction, to the issue of such child in equal shares, and in default of issue the share with accumulated income to be added to the other shares, such additions to be treated as if they had at all times been a part of the original shares. Any part of the capital fund or accumulated income at any time undisposed of was to be distributed in accordance with the law of Ontario relating to the distribution of personal estate upon an intestacy among the next of kin to be ascertained at the date of such distribu- 74731-3
WILLS-Concluded tion. If any share or shares or any part of any share of the capital fund was not vested in some person or persons as the beneficial owner or owners at the expiration of 21 years less one day from the date of the death of the last survivor of the son and his child or children and the issue of such child or children born in the lifetime of the testator, such share or shares, part or parts, at the expiration of the said period, was to vest in the person or persons who at that time was or were the person or persons for whose benefit the Trustees were authorized to make payments out of income derived from such share or shares or part or parts thereof.
The Testator died in 1929 and upon the termination of the 21 year period from the date of his death s. 1 of The Accumulations Act, R.S.O. 1950, c. 4, applied to prevent further accumulation of income of the estate. The direction of the Court was sought as to whether the income so directed to be accumulated should go to a grandson David Fasken Jr., the sole surviving lineal descendant, or to the collateral next of kin of the testator. Held: "Kin" or "kindred" is the equivalent of blood relationship; "next of kindred" defines its degree. Children are "next of kindred" in the ordinary sense of the words and in s. 29 of The Devolution of Estates Act, R.S.O. 1950, c. 103, children as kin, are dealt with first, and it is only if there are no children, meaning issue, that the word "next" is applied to the remaining kin. As held by the trial judge, the accumulated income should go to the grandson. In re Natt; Walker v. Gammage 37 Ch. D. 517, explained; Withy v. Mangles 8 E.R. 724; 10 C. & F. 215, followed. Decision of the Court of Appeal [1952] O.R. 802, reversed. v. FASKEN................. 3.-Succession-Effect of will giving income from residue with power to draw from capital-Whether general power of appointment-Whether dutiable succession-Dominion Succession Duty Act, 4 and 5 Geo. VI c. 4, s. 4(1), 31.................... See SuccESSION.
WORDS
PHRASES-1.-"Employee" (Industrial Conciliation and Arbitration Act, R.S.B.C. 1948, c. 155, s. 2(1)) . .......... 2.-"In furtherance of Charitable Object" (Copyright Act, R.S.C. 1927, c. 32, s. 17) 111 3.-"Next-of-kin" (Devolution of Estates Act, R.S.O. 1950, c. 103, s. 29) ....... 4.-"Person employed in confidential capacity" (Industrial Conciliation and Arbitration Act, R.S.B.C. 1948, c. 155, s. 2(1) (a) ................................
Cases cited
- A.C. 22 A.C. 22
- Custodian Custodian, supra
- A.C. 229 A.C. 229
- A.C. 562 A.C. 562
- Pierce v. Empey scr-1939-247
- A.C. 1001 A.C. 1001
- A.C. 299 A.C. 299
- O.R. 802 O.R. 802
Statutes and regulations cited
-
- s. 36(4) of the Income Tax Act
- s. 36(1)
- s. 36(2)
- s. 36(4)
- s. 127(5)(c)
- s. 127(5)
- (b)
- Section 36 of the Income Tax Act
- Section 127
- s. 36
- section 36(4)
- s. 127(1)
- s. 127
- s. 31
- s. 36(4)(b)(iii)
- s. 36(3)
- ss. 1
- s. 36(2) of The Income Tax Act
- Section 36
- ss. 2
- section 127
- section 36(4)(b)(iii)
- section 90
- s. 82(b)
- s. 124
- s. 21
- s. 4(1)
- s. 12(2)
- s. 2
- s. 9(2)
- 127
-
- s. 75
- 82
- s. 82(1)
- 93
- 24
- 25
-
Dominion Succession Duty Act
- s. 31 of the Dominion Succession Duty Act
- s. 2(m)
- s. 3(1)
- s. 31
- s. 5(1)
- s. 20
- s. 5(1)(w)
- ss. 86
- 31
-
Unresolved citations
- subsection (2)
- subsection (1)
- ss. (2)
- ss. (1)
- ss. (4)
- para. (a)
- para. (b)
- Section 82 of the Motor-vehicle Act
- s. 91 of the British North America Act, 1867
- s. 21 of The Opium and Drug Act, 1929
- s. 41 of the Labour Relations Act
- s. 41 of the Labour Act
- s. 50 of that Act
- s. 9(2) of the Trade Union Act
- s. 1 of The Accumulations Act
- s. 29 of The Devolution of Estates Act