Judgment of the Court
FAUTEUx J.:-The facts giving rise to this litigation are simple and undisputed. In November 1953, appellants acquired a vacant emplacement on Dudemaine Street in the City of Montreal. At that time, the building of multifamily dwellings, two storeys in height, was there permitted under City by-law no. 1920. In June 1958, the City adopted by-law no. 2414 further restricting to single family dwelling units only the type of buildings that could be erected in the locality. Three years later, in May 1961, appellants, contending that the value of their vacant emplacement had been substantially reduced as a result of this new building restriction, sought to resort to the procedure of arbitration provided for under para. 44(a) of art. 300 of the City Charter for the recovery of the indemnity therein contemplated for loss of vested rights. Having appointed their arbitrator, they requested the City to appoint its own, and upon the refusal of the latter to do so, procured the issue of a writ of mandamus to compel the City to arbitrate.
Contested by the City, this action of the appellants was dismissed by a judgment of the Superior Court which, being appealed to the Court of Queen's Bench', was affirmed by a majority judgment. A further appeal entered in this Court was dismissed at the issue of the hearing, the Court indicating that reasons would later be delivered.
It was conceded that the City adopted By-Law 244 in the public interest and that the appellants never obtained nor sought to obtain a building permit for this emplacement which they had bought with the intention to sell. It may be added that the record does not disclose any subdivision, opening of streets or similar works having been done by the appellants with respect to their land. At the hearing, it was common ground that the only issue was whether, as contended for by the appellants and obviously denied by the respondent, the two Courts below erred in failing to find that appellants were, as a result of by-law 2414, deprived of any vested rights within the meaning of the term under para. 44(a) of art. 300 of the et al. City Charter.
CrrY oF Article 300 of the Charter enables the City to make by-laws. As it stood, prior to the date of acquisition of Fauteux J. appellants' emplacement, art. 44(a) thereof authorized the - City:
To regulate the kind of buildings that may be erected on certain streets, parts or sections of streets or on any land fronting on any public place or park; to compel the proprietors or constructors of buildings, hereafter erected, containing ten stories or more, to reserve an adequate space as a garage for the use of the occupants of such buildings; to determine at what distance from the line of the streets, public places or parks the houses shall be built, provided that such distance shall not be fixed at more than twenty-five feet from the said line, or to prohibit the construetion, occupation and maintenance of factories, workshops, taverns, billiardrooms, pigeon-hole rooms, livery-stables, butcher's stalls or other shops or similar places of business in the said streets, parts or sections of certain streets or on said land fronting on any public place or park, saving the indemnity, if any, payable to the proprietors, tenants or occupants of the buildings now built or being built or who have building permits, which indemnity shall be determined by three arbitrators, one to be appointed by the city, one by the proprietor, tenant or occupant interested and the third by the two former and, in default of agreement, by a judge of the Superior Court; and the city shall have the right to pass a by-law to compel every proprietor to have an opening made in the outer door of his house or houses, even those already built, to enable the postman to insert the mail; The provisions of this section were replaced, on February 22, 1955, by the following:
To classify buildings and establishments; to divide the municipality into zones, whose number, shape and area seem suitable; to regulate and restrict differently according to the location in such zones, parts or sections of certain zones or in certain streets, parts or sections of certain streets or at any place whatsoever, the use and occupation of lands, the kind, destinatior, occupation and use of buildings which may be erected as well as the maintenance, reconstruction, alteration, repair, enlargement, destination, occupation and use of buildings already erected, saving the indemnity, if any, payable to the owners, lessees or occupants, having vested rights, which indemnity must be determined by three arbitrators, one to be appointed by the city, one by the interested party and the third by the two former and, in default of agreement, by a judge of the Magistrate's Court, to prescribe the area of lots, the proportion thereof which may be occupied by the buildings, the number of parking units which are to be laid out, the space to be left between the buildings and between the buildings and the line of streets, lanes, public places or parks, to prohibit any construction, reconstruction, alteration, repair, destination, occupation and any enlargement and usage not in conformity, to have them cease and even provide for the demolition of the construction;
11964] The wording of the two texts differs in that the words saving the indemnity, if any, payable to the proprietors, tenants or occupants of the buildings now built or being built or who have building permits . appeare.
ing in the former, have been replaced, in the latter, by the words saving the indemnity, if any, payable to the owners, lessees or occupants, having vested rights This difference, it was argued, evidences an intention of the Legislature to enlarge the group of persons entitled to an indemnity to all those whose vested rights are injuriously affected. With deference, I fail to appreciate the relevancy of this submission to solve the question in issue which is centred on the effect to be given to the expression "having vested rights" or, as it appears in the French version, "ayant des droits acquis". Whatever be generally the meaning of the term "vested rights" or "droits acquis", the true import, in art. 44(a), of the expression "having vested rights" or "ayant des droits acquis" cannot be ascertained adequately without regard to the context, the nature, object and purpose of the enactment in which it appears. In the context, this expression qualifies the words "owners, tenants or occupants". As held by Taschereau J., with the concurrence of Tremblay C.J. and Rivard J., the presence of this expression in the text would be superfluous had the Legislature considered sufficient for one to possess rights common to all "owners, tenants or occupants", to be entitled to an indemnity. The extent to which such rights, as those invoked by appellants in the circumstances of this case, are affected by legislation of a nature and having an object and purpose substantially similar to art. 44(a) has often been considered by the Courts. To admit appellants' claim to an indemnity would be disregarding virtually the general principles attending such legislation. These general principles were particularly formulated by the Judicial Committee of the Privy Council in Toronto Corporation v. Roman Catholic Separate Schools Trustees, and recently applied by this Court in Canadian Petrofina Limited v. Martin and Ville de Saint- Lambert'.
Appellants' claim to an indemnity could not be entertained. And as above indicated, their appeal against the 1[1926]
dismissal of their action was, at the issue of the hearing, dismissed with costs.
Appeal dismissed with costs.
LTD. Attorneys for the petitioners, appellants: Louis & et al. Berger, Montreal.
OF Attorneys for the defendant, respondent: Parent, Fautex J. McDonald & Mercier, Montreal.
LOUIS JARRY ..........................
APPELANT; *Oct. 31 -ET- *Nov. Dec.19 LE MINISTRE DU REVENU NATIONAL
INTIME. EN APPEL L'ECHIQUIER Taxation-Impbt sur le revenu-Notaire en association avec contracteurs- Achat et vente de terrains-Placement de capital ou t titre spiculatif-Loi de l'imp6t sur le revenu, S.R.C. 1952, c. 148, arts. 3, 4, 46(6), 189(1)(e).
En 1953 l'appelant, un notaire, a achet6 en soci6t6 avec deux contracteurs un terrain avec, dit-il, l'intention de construire un centre d'achats. II 6tait depuis plusieurs annies engagA A de nombreuses transactions irmobilibres. Vu les difficult6s de financer leur projet, les associds out vendu une partie du terrain en 1955 A une compagnie qui a par la suite construit un centre d'achats sur le site. L'appelant, ayant acquis de ses associ6s une partie du risidu de la propri6t6, en revendit une partie en 1955. II pr6tendit qu'il avait eu l'intention de construire une taverne sur ce site. De ces deux ventes, I'appelant a r~alis6 des profits respectifs de $69,406.93 et $24,603. Le Ministre, par la mithode dite de conciliation de capital, a ajout6 ces deux montants au revenu imposable de 'appelant pour les ann6es 1953, 1954 et 1955. C'est la pr6tention de l'appelant que ces montants 6taient des gains en capital. La Cour de l'Echiquier a conclu qu'il s'agissait d'une entreprise ayant un caractbre sp~culatif. D'oi le pourvoi devant cette Cour.
Arrit: L'appel doit Stre rejet6.
La preuve au dossier justifiait la Cour de l'Echiquier de conclure qu'en achetant le terrain en question, I'appelant 6tait indiff6rent h l'utilisation ou, alternativement, h la vente 6ventuelle de ce terrain en tout ou en partie, et que la sp6culation avait 6t6 le facteur d6terminant son acquisition. Les profits r6alis6s par I'appelant 6taient done imposables. Taxation-Income-Notary in partnership with builders-Purchase and resale of land-Whether capital gain or income-Income Tax Act, RS.C. 1952, c. 148, ss. 3, 4, 46(6), 139(1)(e).
Le Juge en Chef Taschereau et les Juges Fauteux, Martland, Judson et Hall.
COUR SUPRtME DU CANADA
In 1953 the appellant, a notary, purchased in partnership with two builders a parcel of land with the alleged intention of building a shopping centre. He had frequently before engaged in real estate transactions. The difficulties of financing the project forced them to sell part of the property in 1955 to a company which later constructed a shopping centre on the site. The appellant, having acquired from his associates part of the remainder of the property, resold part of it, also in 1955. He claimed that he had intended to build a tavern on that site. The appellant realized profits of $69,406.93 and $24,603 respectively on the two sales. The Minister, using the method of capital reconciliation, added these two amounts to the appellant's income for the years 1953, 1954 and 1955. The appellant contended that they were capital gains. The Exchequer Court held that the appellant had engaged in a scheme of profit making. The appellant appealed to this Court.
Held: The appeal should be dismissed.
The evidence justified the trial judge's conclusion that, when acquiring the land in question, the appellant was indifferent as to its use or, alternatively, as to its eventual sale, and that speculation was the determining factor in the acquisition. The profits realized by the appellant were therefore taxable as income.
APPEL d'un jugement du juge Kearney de la Cour de 1'Rchiquier du Canada', confirmant la cotisation de 1'appelant pour imp~t sur le revenu. Appel rejet6. H. Paul Lemay, C.R., pour l'appelant.
Paul Boivin, C.R., pour l'intim6.
Le jugement de la Cour fut rendu par
LE JUGE FAUTEUx:-Par jugement du 14 juillet 1961, la Cour de l'chiquierl disposa d'un appel log6 par l'appelant h 1'encontre des cotisations d'imp6t sur le revenu 6tablies par l'intim6 pour les ann6es d'imposition 1953, 1954 et 1955. Donnant effet h 1'admission 6crite, faite par l'intim6 A l'ouverture de 1'enquite, qu'il y avait eu erreur au bilan pr6par6 lors de 1'6tablissement de la r6conciliation du capital, la Cour maintint l'appel pour autant, avec d6pens, contre l'intim6 jusqu'A la production de cette admission mais rejeta cet appel quant aux autres item non couverts par l'admission, et ce avec d6pens contre l'appelant. Le pr6sent appel est de cette dernibre partie du jugement.
Le point en litige est de savoir si un profit de $69,406.93 et un profit de $24,603 r6alisis par I'appelant lors de la vente d'une partie du lot 122 A Ivanhoe Corporation 1 [19611 C.T.C. 402, 61 D.T.C. 1239.
R.C.S.
et d'une autre partie du m~me lot h L6on Jeannotte, respectivement, doivent 6tre consid6r6s comme revenus imposables au sens des dispositions des arts. 3(a) et 139(1) (e) de la Loi de l'imp6t sur le revenu, R.C.S. 1952, 148, ainsi qu'il fut jug6 par M. le Juge Kearney de la Cour de lichiquier.
J. En somme, I'appelant a-t-il fait l'acquisition des terrains dont parties devinrent 'objet de ces ventes, h titre de placement de capital, comme il le pr6tend, ou h titre sp6culatif, comme le soumet l'intim6? C'est lh une question de fait A d6terminer suivant la preuve au dossier; chaque cause oii une telle question se pr6sente tant une cause d'espice. Sutton Lumber and Trading Company Limited v.
Minister of National Revenue'.
Il n'y a pas lieu de reprendre ici la revue minutieuse de la preuve apparaissant aux raisons de jugement de M. le
Juge Kearney. Cette preuve manifeste particulibrement que l'appelant, notaire, homme d'affaires tris averti, 6tait, depuis plusieurs ann6es, engag6 h de nombreuses transactions immobilibres et ce dans la region m~me -oi sont situ6s les immeubles pricit6s, qu'en raison particulibrement des fonctions publiques qu'il exergait dans cette r6gion, il avait une grande connaissance des expectatives d'accroissement de valeur des immeubles de 1'endroit. Au regard de toutes les circonstances r6vil6es par la preuve, le Juge au proces est arriv6 h la conclusion qu'en achetant les terrains en question, l'appelant 6tait indiff6rent A 1'utilisation ou, alternativement, h la vente 6ventuelle de ces terrains ou de parties d'iceux, et que la sp6culation 6tait le facteur d6terminant leur acquisition. Aussi bien le Juge rejeta-t-il la pr6tention de 1'appelant que, relativement aux parties vendues de ces terrains, il entendait, contrairement h ce qui avait 6t le cas dans ses autres transactions immobilibres, faire un placement de capital. La preuve au dossier justifie 1'opinion A laquelle le savant Juge s'est arrit6 sur les faits et l'application en droit des principes supportant la d6cision de cette Cour dans Regal Heights
Limited v. Minister of National Revenue'.
Pour les raisons exprim6es au jugement a quo, je rejetterais l'appel avec d6pens.