Crowland (Township) v. Slevar

Crowland (Township) v. Slevar
Collection
Supreme Court Judgments
Date
1960-04-11
Report
[1960] SCR 408
Judges
Judson, Wilfred; Taschereau, Robert; Locke, Charles Holland; Fauteux, Joseph Honoré Gérald; Martland, Ronald; Ritchie, Roland Almon
On appeal from
Ontario
Subjects
Taxation
Decision Content
Supreme Court of Canada
Crowland (Township) v. Slevar, [1960] S.C.R. 408
Date: 1960-04-11
The Municipal Corporation of the Township of Crowland (Defendant) Appellant;
and
Ferdinand Slevar (Plaintiff) Respondent.
1960: March 8, 9; 1960: April 11.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Taxation—School taxes—Issue of public school debentures—Taxpayer a public school supporter at the time—Subsequent establishment of separate school—Taxpayer then became separate school supporter—Whether taxpayer liable to pay assessment to retire debentures—The Public Schools Act, R.S.O. 1950, c. 316, s. 3—The Separate Schools Act, R.S.O. 1950, c. 356, s. 56(1), (5), (6).
Prior to September 1954, the plaintiff was a public school supporter in the defendant municipality. Subsequently a separate school was established and he became a supporter of that school and was so assessed. In the period from January 1946 to September 1954, seven by-laws authorizing the issue of debentures for public school purposes were passed by the municipality. In the year 1958, the municipal tax bill in respect of the plaintiff’s property claimed, in addition to the separate school rate, an amount to raise the instalments of principal and interest falling due in that year upon the debentures issued pursuant to the seven by-laws. The plaintiff’s action, seeking a declaration that his property was exempt from the payment of all rates imposed for public school purposes, was dismissed by the trial judge. This judgment was reversed by the Court of Appeal. The municipality appealed to this Court.
Held: The appeal should be dismissed and the action maintained.
The plaintiff, on becoming a separate school supporter, ceased to be liable either personally or to have his property charged for rates subsequently imposed to discharge the debentures. The exemption from the payment of all rates imposed for the support of public schools given by s. 56(1) of The Separate Schools Act is qualified by s. 56(6) and by s. 3 of The Public Schools Act, but only in respect of rates annually imposed before the establishment of a separate school and in respect of any liability already incurred. The rates are not imposed by the debenture by-laws, but are imposed annually when the rating by-law is passed. Nothing in s. 3 creates any liability; the section does no more than provide for the continuation of a liability which can only be found in the limited one arising under s. 56(6) for the rate imposed under the annual rating by-law before the taxpayer becomes a separate school supporter or before the establishment of a separate school.
APPEAL from a judgment of the Court of Appeal for Ontario[1], reversing a judgment of Aylen J. Appeal dismissed.
S.S. Maclnnes, Q.C., for the defendant, appellant.
A. Kelly, Q.C., and J.K. Smith, for the plaintiff, respondent.
The judgment of the Court was delivered by
JUDSON J.:—The respondent sued the appellant township for a declaration that he, as a separate school supporter, was exempt from the payment of all rates imposed for public school purposes, including levies imposed for the purpose of paying the annual instalments of principal and interest on certain debentures issued by the appellant before September 28, 1954. The learned trial judge dismissed his action. The Court of Appeal1 reversed this judgment and granted the declaration asked for. The Township now appeals.
In the period from January 24, 1946 to September 28, 1954, the Township authorized seven issues of debentures, totalling $1,014,000 for the purpose of constructing and equipping public schools in Public School Area no. 1. During this period the respondent was a public school supporter within this school area. Between 1954 and 1957 a Roman Catholic separate school was established. The respondent then became a separate school supporter. In the assessment roll prepared for the year 1957 and upon which rates and taxes were levied in the year 1958, the respondent was properly entered and rated as a separate school supporter.
In the year 1958 the municipal tax bill issued by the Township in respect of the respondent’s property claimed for school purposes the appropriate separate school rate and, in addition, an amount which was the aggregate of the rates allegedly imposed on the respondent to raise the instalments of principal and interest falling due in the year 1958 upon the debentures issued pursuant to the seven by-laws passed before the establishment of the separate school. The respondent then brought his action.
The only part of the declaration sought which needs to be considered in these reasons is in these sharply defined terms:
A declaration that the plaintiff and the taxable property of the plaintiff are exempt for the year 1958 and for every subsequent year while the plaintiff continues a supporter of a separate school from the payment of all rates imposed by the defendant for the support of public schools and public school libraries, or for the purchase of land or the erection of buildings for public school purposes or for the interest and principal of debentures issued to secure money borrowed for public school purposes.
The learned trial judge held that s. 3 of The Public Schools Act, R.S.O. 1950, c. 316, and s. 56, subs. (6) of The Separate Schools Act, R.S.O. 1950, c. 356, exempted the respondent from any further personal liability for public school taxes after he became a separate school supporter, but that the lands of the respondent remained charged with the amount required to pay off the debentures in question.
The Court of Appeal held that the exemption from the payment of rates imposed for public school purposes provided for in subs. (1) of s. 56 of The Separate Schools Act was unrestricted save as to any rate imposed before the exemption became effective; that the relevant statutes do not create a liability at large upon separate school supporters to pay taxes to meet debenture payments upon debentures for public school purposes issued prior to the establishment of a separate school, but create only a liability to pay taxes according to rates actually imposed before the exemption becomes effective; and that the passing of a debenture by-law in itself does not impose such a rate, a rate being imposed only by some proceedings taken to fix and collect such rate after the actual rate has annually been determined.
I would affirm the judgment of the Court of Appeal for the reasons given. The error in the judgment at trial was in the finding that the lands of the respondent were charged with the amounts required to pay off those debentures from the date of their issue. The problem arises because of a supposed conflict between s. 56 of The Separate Schools Act, R.S.O. 1950, c. 356, and s. 3 of The Public Schools Act, R.S.O. 1950, c. 316. The two relevant subsections of s. 56 of The Separate Schools Act read:
56. (1) Every person paying rates, whether as owner or tenant, who by himself or his agent, on or before the 15th day of July in any year, gives to the clerk of the municipality notice in writing that he is a Roman Catholic and a supporter of a separate school situate in the municipality or in a municipality contiguous thereto shall be exempt from the payment of all rates imposed for the support of public schools and of public school libraries, or for the purchase of land or the erection of buildings for public school purposes within the city, town, village or section in which he resides, for the following year, and every subsequent year thereafter while he continues a supporter of a separate school.
(6) Nothing in this section shall exempt any person from paying any rate for the support of public schools, or public school libraries, or for the erection of a schoolhouse or schoolhouses, imposed before the establishment of the separate school.
Section 3 of The Public Schools Act reads:
Nothing in this Act authorizing the levying or collecting of rates on taxable property for public school purposes shall apply to the supporters of Roman Catholic separate schools, except that all taxable property shall continue to be liable to taxation for the purpose of paying any liability incurred for public school purposes while the property was subject to taxation for such purposes.
The exception did not come into s. 3 of The Public Schools Act until the year 1909 by 9 Ed. VII, c. 89. But for this exception there would be nothing to qualify the sweeping exemption contained in s. 56(1) of The Separate Schools Act except the qualification of minor scope contained in subs. (6) of s. 56 of the same Act. This minor qualification only relates to rates annually imposed before the exemption becomes effective. These rates are imposed annually by the municipality when the rating by-law is passed. They are not imposed by the debenture by-laws even though each by-law contains a section to the following effect:
COMMENCING in the year 1955 and thereafter in each year in which an instalment of principal of the said debt and interest become due, the Corporation shall levy and raise the specific sum shown for the respective year in the fourth column of the said Schedule. Such sum shall be levied and raised by a special rate sufficient therefore, over and above all other rates, upon all the rateable property of ratepayers who are supporters of Public Schools in School Area No. 1 of the Township of Crowland. The debenture by-law is authorized by s. 56(2) of The Public Schools Act, R.S.O. 1950, c. 316, made applicable to rural schools by s. 58 of the same Act, and there is nothing in this legislation to authorize the imposition of a rate by debenture by-law. The section above quoted from the debenture by-law does no more than provide that certain sums are to be levied annually. There can, however, be no rate ascertained in any one year until the number of ratepayers and the assessed value of their properties are determined for that year by the annual Assessment Roll. The sums required become rates only when the amount for which each ratepayer is liable is determined, and the rate is not imposed upon a ratepayer before the passing of the annual by-law fixing and imposing the rate. This is the principle stated In Re Separate Schools Act[2].
The historical review of s. 56(6) of The Separate Schools Act contained in the reasons of the Court of Appeal reinforces this interpretation. As originally enacted by 16 Victoria, c. 185, s. 4 (Statutes of Canada 1852-53), it read:
…nor shall such exemption extend to school rates or taxes imposed or to be imposed to pay for School Houses, the erection of which was undertaken or entered into before the establishment of such separate School.
A significant change was made in this exemption in 1855 by 18 Victoria, c. 131, s. 12. As amended, it became the recognizable predecessor of s. 56(6) in the following form:
Provided always, that nothing herein contained shall exempt any such person from paying any rate for the support of Common Schools or common School Libraries, or for the erection of a School-house or School-houses, which shall have been imposed before such Separate School was established.
What the legislation did in 1855 is to me quite clear. “Rates or taxes to be imposed” were taken out of the exception to the exemption thus limiting such exception to rates imposed before the establishment of a separate school. There has been no substantial change in subs. (6) of s. 56 of The Separate Schools Act since the year 1855.
I turn now to the interrelation between s. 3 of The Public Schools Act and s. 56 of The Separate Schools Act. Section 3 of The Public Schools Act came into the legislation in two stages—the first in 1874 and the second in 1909. In 1874, by 37 Victoria, c. 28, s. 193, it was enacted in the following unambiguous terms and it remained unchanged until the year 1909:
Nothing in this Act authorizing the levying or collecting of rates on taxable property for public school purposes shall apply to the supporters of Roman Catholic separate schools.
Standing in this form, the section could not be in conflict with the exemption contained in The Separate Schools Act. However, in 1909, by 9 Ed. VII, c. 89, the following exception was added.
…except that all taxable property shall continue to be liable to taxation for the purpose of paying any liability incurred for public school purposes while such property was subject to taxation for such purposes.
The appellant’s main submission on the appeal is that the combined effect of the 1909 exception to s. 3 of The Public Schools Act, together with the above quoted section of the debenture by-law directing the levy for the purpose of paying the debentures, is to make the respondent, as a municipal taxpayer, liable to contribute to the payment of these debentures until they are fully paid even after he has become a separate school supporter.
It would be a strange result if this exemption were to be cut into by legislation of the kind enacted in 1909, which takes the form of an exception to an exemption already defined in the broadest terms. The fallacy in the appellant’s submission is that nothing in s. 3 creates any liability. The section does no more than provide for the continuation of a liability which must be found elsewhere and the only liability that is to be found elsewhere is the limited one arising under s. 56(6) of The Separate Schools Act for the rate imposed under the annual rating by-law before the taxpayer becomes a separate school supporter or before the establishment of a separate school.
There is nothing in the debenture by-law nor in the legislation authorizing its issue which amounts to the imposition of rates within the meaning of s. 56(6) of The Separate Schools Act. Neither the debentures nor their supporting legislation create a charge against land. The main import of the supporting legislation (which is s. 56 of The Public Schools Act) is to provide that the money required for capital purposes by public schools is to be raised by debentures of the municipality, and subs. (2) is added solely for internal purposes to indicate that the money which will be raised annually to pay the debentures must come, not from all ratepayers of the municipality but only from those who are supporters of the public schools and thus to ensure that no part of the money for the debentures shall be raised from separate school supporters.
The Municipal Act, R.S.O. 1950, c. 243, s. 308, provides that a yearly rate be levied sufficient to pay all the debts payable within the year. When the council has taken the appropriate action to determine what the annual rate shall be, to cause it to be levied, and to turn the collection over to the collector, then only is there a rate which becomes chargeable against the property of the ratepayer.
The appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the defendant, appellant: Raymond, Spencer, Law & Machines, Welland.
Solicitors for the plaintiff, respondent: Day, Wilson, Kelly, Martin & Campbell, Toronto.
[1] [1960] O.R. 9, 20 D.L.R. (2d) 518.
[2] (1901), 1 O.L.R. 584 at 589.