Majority
CLARE LECKIE, Executrix of the
Estate of Adam Newton Leckie .P.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA
Judgment of the Court
CARTWRIGHT J.:-This is an appeal from a judgment' of Gibson J. allowing an appeal by the respondent and dismissing a cross-appeal by the appellant from a decision of the Tax Appeal Board and declaring that under the provisions of the Estate Tax Act, Statutes of Canada 1958, 7 Elizabeth II, c. 29, certain shares owned by the deceased Adam Newton Leckie were property situate in the Province of Ontario, which is a prescribed province.
There is no dispute as to the facts.
The questions which arise are as to the situs for the purpose of section 9 of the Estate Tax Act of (i) 30,003 1 [19661 C.T.C. 310, 66 D.T.C. 5237.
R.C.S.
common shares and 165 preferred shares of the capital stock of Leckie Enterprises Limited and (ii) 300 shares of MiNISThE oF the capital stock of Anglo-Newfoundland Development Company Limited.
As to the shares in Anglo-Newfoundland Development Cartight J. Company Limited, the Court at the conclusion of the argument of counsel for the appellant stated that it was not necessary to call upon counsel for the respondent as on this point we were all in agreement with the reasons and conclusion of the Tax Appeal Board which were concurred in by Gibson J.
It remains to consider the question as to the shares in Leckie Enterprises Limited, hereinafter called "The Company".
The relevant provision of the Estate Tax Act is s. 9(8) (d) which reads as follows:
9. (8) A reference in this section to the situs of any property passing on the death of a person shall be construed as a reference to the situs of that property at the time of the death of that person, and, for the purposes of this section except sub-section (3), the situs of any property so passing, including any right or interest therein of any kind whatever, shall, where that property comes within any of the classes of property mentioned in paragraphs (a) to (d) of this section, be determined in accordance with the following rules:
(d) shares, stocks and debenture stocks of a corporation and rights to subscribe for or purchase shares or stocks of a corporation (including any such property held by a nominee, whether the beneficial ownership is evidenced by scrip certificates or otherwise) shall be deemed to be situated
(i) in the province where the deceased was domiciled at the time of his death, if any register of transfers or place of transfer is maintained by the corporation in that province for the transfer thereof, and
(ii) otherwise, in the place where the register of transfers or place of transfer nearest to the place where the deceased was ordinarily resident at the time of his death is maintained by the corporation for the transfer thereof;
At the time of his death Adam Newton Leckie, hereinafter referred to as "the deceased", was domiciled and ordinarily resident at Oakville in the County of Halton in the Province of Ontario. He was the beneficial owner of the 30,003 common shares which were all the issued common shares of the Company and the registered owner of all of these except two used to qualify directors who were his nominees and acted entirely on his instructions. The S.C.R.
[19671 preferred shares had no voting rights and it is not questioned that the deceased was at all times in complete control of the company.
The Company was incorporated pursuant to the provi- J sions of the Manitoba Companies Act on October 2, 1957. Its head office was at all times in the City of Winnipeg. It maintained only one register for the transfer of shares and that register was at its head office in Winnipeg.
Section 346(1) of the Manitoba Companies Act provides as follows:
The directors did not authorize a branch register to be kept at any office of the Company in Ontario or at any other place in Ontario.
On this state of facts it seems plain that the condition prescribed in clause (i) of paragraph (d) of subsection 8 of section 9 of the Estate Tax Act, quoted above, was not fulfilled and for the purposes of that Act the situs of these shares is governed by clause (ii) of that paragraph and accordingly they shall be deemed to be situated in the place where the register of transfers or place of transfer nearest to the place where the deceased was ordinarily resident at the time of death was maintained by the company for the transfer thereof.
The wording of this provision is mandatory and appears to me to be clear and free from any ambiguity. On the admitted facts it has the inevitable result of declaring that the shares in question shall be deemed to be situated in Manitoba.
For the reasons stated by Mr. W. 0. Davis, who gave the decision of the Tax Appeal Board, and those briefly set out above, I would allow the appeal as to the shares in Leckie Enterprises Limited, dismiss the appeal as to the shares in Anglo-Newfoundland Development Company Limited and
Statutes and regulations cited
-
Unresolved citations
- section 9 of the Estate Tax Act
- s. 9(8)
- section (3)
- paragraphs (a)
- (d)
- Section 346(1) of the Manitoba Companies Act
- paragraph (d)