The King v. Assessors of Sunny Brae (Town)

The King v. Assessors of Sunny Brae (Town)
Collection
Supreme Court Judgments
Date
1952-02-05
Report
[1952] 2 SCR 76
Judges
Rinfret, Thibaudeau; Kerwin, Patrick; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland; Cartwright, John Robert
On appeal from
New Brunswick
Subjects
Taxation
Decision Content
Supreme Court of Canada
The King v. Assessors of Sunny Brae (Town), [1952] 2 S.C.R. 76
Date: 1952-02-05
The King Appellant;
and
The Assessors Of The Town Of Sunny Brae Respondent.
1951: October 18, 19; 1952: February 5.
Present: Rinfret C.J. and Kerwin, Rand, Kellock, Estey, Locke and Cartwright JJ.
Ex Parte Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur.
ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION
Assessment—Taxes—Religious Congregation operating laundry and dry cleaning business in competition with other firms in like business—The Rate and Taxes Act, R.S.N.B., 1927, c. 190, s. 4(1) (d) and (g)—Whether appellant's buildings, and equipment exempt under clauses (d) and/or (g)—Meaning of word "charitable" as used in clause (g).
The Rates and Taxes Act, R.S.N.B. 1927, c. 190, exempts from taxation s. 4(1):
"(d) Every building of a religious organization used exclusively … for the religious, philanthropic or educational work of such organization, with its site and ground surrounding the same upon which no other building is erected, but this exemption shall not include real estate in respect of which rent is received by such organization; also the personal property and income of such organization, used exclusively for religious, philanthropic or educational purposes;
(g) The property of any literary or charitable institution."
The appellant is a religious society devoted exclusively to the furtherance of the education of girls generally and in particular to the education and reformation of wayward girls, and the education and care of female orphan children. Its members have taken the vows of poverty and receive no wages and any revenue is expended exclusively for the furtherance of the purposes of the Society. Girls are received regardless of their race or creed or ability to pay. The appellant owns real estate on which is erected a main building which provides accommodation for the inmates and includes a school and a public laundry and dry cleaning plant where the girls are taught habits of industry and fitted to earn a living. The plant is in public competition with commercial laundries. There is also on the property a two-family brick dwelling occupied by two male employees and their families. The men are employed as truck drivers. The appellant was incorporated in 1945 by a special act of the N.B. Legislature for the purpose of carrying out its objects as set out above and was authorized to purchase land and erect buildings for such purposes and as incidental thereto for the maintenance of the institution, to carry on the business of a steam and general laundry. The respondent assessed the laundry equipment, two motor trucks used in the business and the brick dwelling. The appellant claims exemption under s. 4(1) clauses (d) and (g).
Held: (Rinfret C.J., Kerwin and Cartwright JJ. dissenting).
1. In construing s. 4(1), clause (g) must be regarded as a general clause and clause (d) as a particular clause and to avoid repugnancy or inconsistency (d) must be taken to be an exception to (g).
2. The appellant is not a "charitable society or institution" within the meaning of clause (g); Cocks v. Manners L.R. 12 Eq. 574; In re White [1893] 2 Ch. 41; but a society of mixed objects, some charitable and some not, and must find exemption, if any, under clause (d).
3. The use referred to in (d) is the actual use to which the property is put and not the object to which the profits from the business carried on may be devoted.
Per Estey J. The equipment used in the conduct of the business serves not only the appellant organization, but the public generally. It therefore cannot be said to be "used exclusively for religious, philanthropic or educational purposes."
Per: Rinfret C.J., Kerwin and Cartwright JJ., dissenting—Whether the word "charitable" as used in clause (g) is to be construed in its legal sense or in its natural and ordinary meaning, the appellant is a "charitable society or institution," notwithstanding its operation of the laundry and dry-cleaning plant, within the meaning of those words as used in clause (g). Birtwistle Trust v. Minister of National Revenue [1938] Ex. C.R. 95 at 101; affirmed by [1940] A.C. 138; In re Douglas—Obert v. Barrow 35 Ch. D 472 at 479 and 487. In the contemplation of the Legislature as expressed in the statute of incorporation the operation of the laundry business is merely incidental to the charitable purposes of the appellant and the maintenance thereof. This is not the case of an institution carrying on a commercial business and incidentally performing sundry charitable works or paying over its profits to others for charitable purposes, but of a society or institution of which all the primary purposes are purely charitable which is actively engaged on charitable works and as an incidental means of providing some of the money which is required for the prosecution of such charitable works carries on a business under its statutory powers. It is a charitable society or institution within the meaning of those words as used in clause (g) and it follows that all its property is exempt from taxation.
APPEAL from a decision of the Supreme Court of New Brunswick, Appeal Division, Richards C.J. and Harrison J. (Hughes J. dissenting) 1dismissing an application by way of Certiorari by the appellant calling upon the respondent to show cause why an assessment upon the appellants' property in the Town of Sunny Brae should not be quashed.
John Carvell for the appellant. If there is no evidence that rent is received for the brick dwelling house, then the finding that it is must be erroneous. The only evidence regarding the receipt of rent by the Society for any of its property appears in the affidavits of the Town Clerk and the Chairman of the Board of Assessors; these affidavits merely depose the fact that rent is paid for the dwelling "or included in the salary or wages paid" the employees who occupy it. Since the saving of expense by paying employees by supplying them a dwelling is not the receipt of rent, this alternative deposition is not evidence that rent is received. Therefore the finding that rent is received is erroneous and this building should be exempt from taxation.
The laundry and dry-cleaning equipment, and property used in conjunction therewith, which is the property of the Society, is exempt from taxation if it is used exclusively for religious, philanthropic or educational purposes. The Rates and Taxes Act, s. 4(1) (d), which is made applicable by s. 75 of The Towns Incorporation Act. The finding that this property is not so used is erroneous. The property of the Society is used exclusively for religious, philanthropic or educational purposes since these are the only purposes of the Society. In re House of the Good Shepherd of Omaha, House of the Good Shepherd of Omaha v. Board of Equalization of Douglas County 2. Where the incorporating statute of the Society provides that it may carry on the business of a general laundry etc. as "incidental to", meaning part of its philanthropic and educational purposes, it follows that the laundry and dry-cleaning equipment and property used in conjunction therewith is exempt from taxation.
All the property of the Society is exempt, regardless of its use, if it is the property of a charitable society. The Rates and Taxes Act s. 4(1) (g), which is made applicable by s. 75 of The Town Incorporation Act. It is wrong at law to rule that a religious society cannot claim exemption as a charitable society—The Legislature has provided an exemption; the meaning of the words used is clear and should be given effect to. The ordinary sense of the words used leads to no absurdity, inconsistency with the rest of the instrument, or manifest injustice and does not require modification by the Judiciary. Re Linton & Sinclair Co. Ltd. 3; Pemsels' case 4. Charitable societies and religious societies do not necessarily belong to the same genus. The word "religious" may describe a society which is not a charitable society. Cocks v. Manners 5 In re Delaney 6. Obviously in this case where the Legislature dealt with the property of religious societies and charitable societies in separate exemptions it considered them to be distinct—As gathered from the words used, the intention of the Legislature should be construed to be the subsidization of charitable societies carrying on business. Halifax v. Sisters of Charity 7. The ruling of the Court of Appeal can only be the result of adding a clause to the Statute, "Provided that the property of a religious society shall not be deemed to be the property of a charitable society"; this is manifestly in error. Maxwell on the Interpretation of Statutes, 9 Ed. p. 14-18.
The appellant is a charitable society since its object is the advancement of education, except in so far as this is tempered with the purpose of relieving poverty and advancing religion. All of these purposes are recognized by the law as charitable, according to the standard set by Lord Macnaghton in Pemsels' case, and since it does its work with philanthropic principles, not for the purpose of making a profit. Re the Township of King and the Marylake Industrial School and Farm Settlement Association 8. Therefore all the property of the appellant is exempt from taxation.
J. A. Creaghan K.C. for the respondent. Taxation is an act of Sovereignty to be performed as far as conscientiously can be with justice and equity to all and exemptions, no matter how meritorious, are of grace and must be construed strictly. In Ruthenian Catholic Mission v. Mundare School District 9, Iddington J. at p. 625 said: "An exemption from taxation should never be carried further than what is beyond doubt the clearly expressed intention of the legislature * * * *"
It is a general rule that while a taxing Act is to be construed strictly in favour of the taxpayer, a statute under which an exemption is claimed from a burden imposed upon the community at large is also to be narrowly construed against the claim for exemption. To claim exemption under s. 4(1) (d) the property must be used exclusively for religious, philanthropic or educational purposes. Les Commissionaires etc. St. Gabriel v. Les Soeurs de la Congregation de Notre Dame de Montréal 10; Evangelical Lutheran Synod v. Edmonton 11; L'Association Catholique etc. v. Chicoutimi 12 ; C.N.R. v. Capreol 13.
Section 4(1) (d) expressly excludes real estate in respect of which rent is received.
The appellant does not come within the provisions of s. 4(1) (g). Richards C.J. "There is no question as to the nature and purposes of the Society in question. It clearly comes within s. 4(1) (d) as a religious, philanthropic and educational institution rather than under s. 4(1) (g) as merely a literary or charitable society." (5) Harrison J. "The society is, as stated by the Mother Superior, a religious organization, that is to say its purposes are conducive to the advancement of religion." 14. In re White 15 ; Re Ward v. Ward 16.
"As a religious organization the exemption of the property of this Society is governed by s. 4(1) (d). No doubt all religious organizations are classified as charitable under the legal definition of charity, but this class of charitable organization is specifically dealt with in the exemption clauses of The Rates and Taxes Act, and therefore this religious organization cannot claim exemption under the general description of charitable society found in clause 4(1) (g)."
It is submitted these findings are correct. The same property could not be included in both clauses as the exemptions are different. Hughes J. in his dissenting judgment was at variance with the rules of construction he adopted in R. v. Mullin 17 and the cases cited by him at p. 308. It is submitted the interpretation there given was the proper one. See also Pemsel's case 18 per Lord Halsbury at 551: "The fact however, remains, that in various statutes the word charitable is distinguished by the Legislature from 'public', 'educational', 'religious', and in no one instance that I have been able to find, do the words run 'or other charitable purpose', which one would think would be the natural mode of the meaning now insisted on." In Adamson v. Melbourne & Metropolitan Board of Works 19 Anglin C.J. in delivering judgment gave a restricted interpretation of the words "charitable institutions."
The judgment of the Chief Justice, Kerwin and Cartwright, JJ. was delivered by:—
Cartwright J.:—This is an appeal from a judgment of the Supreme Court of New Brunswick, Appeal Division, discharging a rule nisi to quash the assessment made by the assessors of the Town of Sunny Brae against certain property of the appellant.
The appellant was incorporated by special act of the Province of New Brunswick being c. 94 of the Statutes of 1945.
The preamble to this Act reads as follows:—
WHEREAS the Religious Ladies established at Monoton and known as Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur, whose members aim at devoting themselves to the care and reformation of female penitents and the providing of a home for orphan children, have by their petition prayed that the institution may be incorporated in order that they may better accomplish the objects for which it was formed;
Section 1 incorporates three sisters who are named "and all members of 'Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur' and other religious forming the Council of the said Community their associates and successors" under the name of the appellant "with all the general powers and privileges incident to corporations."
Sections 2 and 3 read as follows:—
2. The Corporation shall have power to conduct, control and maintain an educational institution for the support, care and reformation of female penitents and for the care and education of girls generally; an hospital and dispensary for the sick; an asylum for orphan children and a home for the aged and infirm and such other persons who may desire to reside in any establishment of the Corporation according to the rules and by-laws of the Corporation.
3. The Corporation shall have perpetual succession, a common seal and may sue and be sued; may purchase, receive or otherwise acquire lands or buildings in the Province of New Brunswick, may erect on such land acquired, as aforesaid, or any of them an educational institution, an hospital, an asylum, a home and any other necessary buildings and works and may use, convert, adapt and maintain all or any of such land, buildings and premises to and for the purposes aforesaid, and incidental thereto for the maintenance of the said institution, hospital, dispensary, asylum and home, may carry on the business of a steam and general laundry and of tailors and makers of dresses and wearing apparels of all kinds, with their usual and. necessary adjuncts and generally may enjoy real and personal estate and may mortgage, lease, convey or sell or otherwise dispose of such real and personal estate for the furtherance of the objects of the Corporation.
There appears to be no dispute as to the relevant facts which are set out in affidavits made by the Superior of the appellant and the Town Clerk of the respondent respectively.
The following paragraphs from the affidavit of the Superior are relevant:—
That the said Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur is a Society devoted exclusively to the furtherance of the education of girls generally, and especially to the education and reformation of female penitents and the furtherance of the education and care of orphan female children.
That the said Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur is a religious Society whose members have taken vows of poverty and receive no wages for their services in teaching and caring for the said girls, and any revenue of the said Society has not been distributed as profits or dividends but is retained and expended exclusively for the furtherance of the purposes of the Society.
That the said object of furthering the general education of girls is realized by the provision of a general Christian education, to 82 boarding pupils and orphans; and that 35 female penitents are surrounded with virtuous influence and taught the habits of industry, so that they may become useful members of society and fitted to earn a living.
That girls are accepted in our institution regardless of their race, religion, creed or any other consideration.
The following paragraphs from the affidavit of the Town Clerk are also relevant:—
That Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur, commonly known as the "Home of the Good Shepherd" is the owner of a large tract of land situate in the said Town of Sunny Brae, on which is constructed a large building in which it carries on a school for the education and reformation of girls, and a home for female orphan children. The said Home of the Good Shepherd carries on in the said building a very extensive public laundry and dry-cleaning business serving customers in the said Town of Sunny Brae, the City of Moncton, N.B., and generally throughout the surrounding districts. For the purpose of the said laundry and dry-cleaning business it owns and operates two motor trucks for picking up and delivering clothing and other articles to be laundered and/or dry-cleaned for reward. It is a very keen competitor with other laundry and dry-cleaning establishments in the area served.
That in addition to the main building used for general purposes of the Home, and in part of which the said laundry and dry-cleaning business is carried on, the Home of the Good Shepherd is the owner of a new two family brick dwelling occupied by two male employees and for which rent is paid or included in the salary or wages paid such employees.
The respondent did not assess the lands or the main building of the appellant, but did assess "the laundry and dry-cleaning equipment" as personal property at the sum of $40,000, the trucks at $2,200 and the two-family dwelling house at $8,000, making a total assessment of $50,200. It is the legality of this assessment which is in issue, and the decision of the appeal turns upon the proper construction of section 4 of The Rates and Taxes Act, R.S.N.B. (1927) c. 190, which by section 75 of The Towns Incorporation Act, R.S.N.B. 1927, c. 179, is made applicable to assessments for town purposes.
Counsel for the appellant concedes that the relevant statutory provisions give the respondent authority to make the assessment in question unless the property assessed is exempt from taxation under the provisions of clauses (d) and (g) of 4(1) of The Rates and Taxes Act which read as follows:—
4. (1) The following property shall be exempt from taxation:—
(d) Every building of a religious organization used exclusively as a place of worship, or used for the religious, philanthropic or educational work of such organization, with its site and ground surrounding the same upon which no other building is erected, but this exemption shall not include real estate in respect of which rent is received by such organization; also the personal property and income of such organization, used exclusively for religious, philanthropic or educational purposes;
(g) The property of any literary or charitable society or institution.
Counsel for the appellant, while conceding the well settled rule that clear words are necessary to give immunity from liability to taxation imposed upon the community at large since every exemption throws an additional burden on the rest of the community, argues that the appellant is a charitable society or institution and that under clause (g), quoted above, all its property is exempt from taxation. Counsel for the respondent submits that the fact of the appellant carrying on the laundry and dry-cleaning business, mentioned above, prevents it being regarded as a charitable society or institution within the meaning of clause (g). Alternatively he submits that even if the appellant would prima facie fall within the wording of clause (g) it does not do so as it is a religious organization and religious organizations being specially dealt with in clause (d) must be deemed to be excluded from clause (g).
Neither counsel suggested that there is any statutory definition in New Brunswick of the words "charitable society or institution." In Commissioner's for Special Purposes of Income Tax v. Pemsel 20 at page 580, Lord Macnaghten says:—
In construing Acts of Parliament, it is a general rule, not without authority in this House (Stephenson v. Higginson 21), that words must be taken in their legal sense unless a contrary intention appears.
* * *
That according to the law of England a technical meaning is attached to the word "charity" and to the word "charitable" in such expressions as "charitable uses", "charitable trusts", Or "charitable purposes", cannot, I think, be denied.
Whether the word "charitable" as used in clause (g) is to be construed in its legal sense or in its natural and ordinary meaning, it is, I think, beyond question that the appellant is a "charitable society or institution" unless its operation of the laundry and dry-cleaning plant has the effect of excluding it from such class.
A sufficient definition of a charitable institution is to be found in the judgment of Maclean J. in Peter Birtwistle Trust v. Minister of National Revenue 22.
A charitable institution is, I think, an organization created for the promotion of some public object of a charitable nature, and functioning as such.
This judgment was reversed, Kerwin J. dissenting, in [1939] S.C.R. 125, and restored sub nom Minister of National Revenue v. Trusts and Guarantee Co. 23, but there is nothing said in any of the judgments to throw doubt on the accuracy of the definition quoted. A helpful discussion of what is a charitable institution is to be found in In re Douglas. Obert v. Barrow 24 where Kay J. at first instance (at page 479) and Lindley L.J. in the Court of Appeal (at page 487) held that the Home for Lost Dogs was a charitable institution and neither Cotton L.J. nor Bowen L.J., the other members of the Court of Appeal, said anything to suggest the contrary.
I have reached the conclusion that notwithstanding the operation of the laundry and dry-cleaning business the appellant remains a charitable institution within clause (g). The Act of Incorporation and the material filed make it clear that the primary purposes and objects of the appellant are purely charitable. It will be observed that in s. 3 of such Act, after the enumeration of certain purposes, all charitable, it is provided that "incidental thereto for the maintenance of the said institution, hospital, dispensary, asylum and home" the appellant may carry on the business of a laundry. In the contemplation of the legislature as expressed in the Statute and in fact as shewn by the material filed, the operation of the laundry business, large though it be, is merely incidental to the charitable purposes of the appellant and for the maintenance thereof. This is not the case of an institution carrying on a commercial business and incidentally performing sundry charitable works or paying over its profits to be used by others for charitable purposes but rather that of a society or institution of which all the primary purposes are purely charitable which is actively engaged in carrying on charitable works and which as an incidental means of providing some of the money which is required for the prosecution of such charitable works carries on a business under statutory powers.
For the above reasons, I am of opinion that the appellant is a charitable society or institution within the meaning of those words as used in clause (g) and it follows that all its property is exempt from taxation for under this clause it is the character of the owner of property rather than the use to which such property is put that determines whether it is liable to assessment.
I have not over-looked the second argument of counsel for the respondent, that the appellant, being a religious organization, must find any exemption to which it is entitled in clause (d) and must be held to be excluded from the operation of clause (g). There is no doubt that the appellant is a religious organization but the construction contended for by counsel for the respondent would bring about the result that all the property of a society or institution whose objects were solely charitable would be exempt from taxation if such society were purely secular, or indeed if it were avowedly atheistic, but that a society with identical objects composed of members of a religious order would have only a limited exemption. It seems to me that clear and unambiguous words would be required to achieve such a result.
I can find nothing in the wording of the Statute and I know of no rule of construction which requires us to hold that the thirteen clauses contained in section 4(1) of The Rates and Taxes Act are necessarily mutually exclusive. There is no incompatibility between religion and charity but, in law, a society may be religious without being charitable, see for example Cocks v. Manners 25, or charitable without being religious, for example the Home for Lost Dogs referred to in In re Douglas. Obert v. Barrow (supra). If, as must often happen, a society is both a religious organization and a charitable institution I see no reason why it should not be entitled to the exemption afforded by clause (g) to a charitable institution. I find nothing in the record to indicate that any of the objects or purposes of the appellant society are religious without being charitable.
For the above reasons, I am of opinion that the appeal should be allowed, the rule nisi made absolute and the assessment quashed. The appellant is entitled to its costs in this court and in the Appeal Division of the Supreme Court of New Brunswick.
The judgment of Rand and Locke, JJ. was delivered by:
Rand J.:—The society or institution appealing to this Court is a body corporate by the name "Les Dames Religieuses de Notre Dame de Charité du Bon Pasteur." The incorporation was by special act of the legislature of New Brunswick in 1945. The objects are, to conduct, control and maintain an educational institution for support, care, and reformation of female penitents and for the care and education of girls generally; a hospital and dispensary for the sick; an asylum for orphan children and a home for the aged and infirm and such other persons as may desire to reside in an establishment of the society; and as incidental to these purposes and for the maintenance of the institution, power was given to carry on the businesses of a steam and general laundry and of tailors and makers of dresses and wearing apparel of all kinds, with their usual adjuncts.
The corporation has its seat near the city of Monoton and as part of its activities it conducts a general laundry business. Those engaged in the laundry include inmates as well as outside employees, and the business is in public competition with other laundries. Under The Rates and Taxes Act of the Province, it has been assessed on the building with its land occupied by two drivers of laundry trucks and the personal property, largely machinery, including the trucks, used in the business, in the sum of $52,200.
Exemption from taxation is claimed under paragraphs (d) and (g) of section 4 of the statute which are as follows:
(d) Every building of a religious organization used exclusively as a place of worship, or used for the religious, philanthropic or educational work of such organization, with its site and ground surrounding the same upon which no other building is erected, but this exemption shall not include real estate in respect of which rent is received by such organization; also the personal property and income of such organization, used exclusively for religious, philanthropic or educational purposes;"
(g) The property of any literary or charitable society or institution;
In the petition for certiorari and in the affidavit of Antoinette des Coteaux, the Superior, the organization is described as a religious society whose members have taken vows of poverty and receive no wages for their services in teaching and caring for the girls, and it is stated that the income is expended exclusively for the furtherance of the purposes of the society. About 60 per cent of those attending the general education classes pay a tuition fee of $20 a month, but the fee is said not to be a condition of admission to or continuance in the institution. Of the female penitents in what is known as the "School of Protection" only four pay the fee and eighteen are accommodated free, except for whatever revenue may be derived from their labour.
The question in controversy involves the characterization given to the corporation and its activities. A charity or charitable society is, I should say, one whose purposes are those described in the preamble to the statute 43 Eliz. c. 4 or purposes analogous to them. They can be classified generally, as for the advancement of religion, for the relief of poverty, for the promotion of education, and for other purposes bearing a public interest: and the attributes attaching to all are their voluntariness and, directly or indirectly, their reflex on public welfare.
A religious society may or may not be charitable. In In re White 26, it was held that a bequest "to a religious society", without more, meant, prima facie, for religious purposes and so charitable. In Cocks v. Manners 27, a religious institution consisting of a voluntary association of women whose purpose was "the working out of their own salvation by religious exercises and self-denial" was held not to be charitable. In Townsend v. Cams 28, in which a legacy was left on trust for the benefit of societies, subscriptions or purposes "having regard to the glory of God, in the spiritual welfare of his creatures", for which a scheme had to be devised, was construed by Wigram V-C. to be a gift for religious purposes and to be restricted to such purposes. In the course of dealing with the argument that ways of expending the property might be suggested which might be conducive to spiritual welfare, but which separately taken would not in themselves be charitable, he observed:—
It appears to me sufficient to say that if, as I think the case is, the end proposed by the testatrix is charitable, no expenditure can be lawful which is not directly conducive to that end; and the end itself cannot lose its charitable character only because parts of the machinery admissible for its accomplishment are not in themselves abstractedly considered charitable. Writing, for example, is not grammar; but if grammar cannot be so well learned without first learning to write, that may be taught in a pure grammar school, as a step to the learning which is its proper object. Lindley L.J. in In re White, supra, paraphrases this language thus:—
Having come to the conclusion that the object of the testator was charitable because it was religious, he says that no mode of carrying out his intention could be proper if that mode was not itself charitable.
This artificial signification, unless the context modifies it; is to be attributed to either "charitable" or "charity" when it appears in a statute: Commissioners v. Pemsel 29; and the former as used in paragraph (g) is to be so interpreted.
As long ago as 1675, in the case of Webb v. Batchelet 30, specifically holding them chargeable to repairs of highways, the Court declared parsons chargeable with all public duties; and that this is the settled view appears from Phillimore's Ecclesiastical Law, 2nd Ed., Vol. I, p. 477. Taxes, then, are the rule against all, and he who claims an exemption must show that he comes within the language delineating it. It must be shown, as Duff J., later Chief Justice, said, speaking for the Judicial Committee in Montreal v. College of Sainte Marie 31, "that the privilege invoked has unquestionably been created."
General tax legislation in New Brunswick began at the inception of the province. C. 42 of the consolidated statutes of 1836, providing for county rates, was enacted in 1786 and directs the assessors to "apportion the quota of the said sum or sums of money so to be levied upon the respective towns or parishes, to be paid by the several and respective inhabitants of the said towns or parishes as they in their discretion shall think just and reasonable." In 1875, in a re-cast of the Rates Act of 1853, exemptions pertinent to the question before us first appeared and they were in the form of paragraph (g). Previous to this, legislation applying to Saint John and Fredericton had provided for Church and other privileges but they were not uniform. Clause (d), on the other hand, was first enacted in 1924.
Mr. Carvell argues that the use of the property is within clause (d) by reason of the fact that the entire net income from the business is to be applied to purposes mentioned in the paragraph. But the uses contemplated are immediate and actual "religious, philanthropic or educational" activities, not those of ordinary business, whatever the ultimate destination of its revenues. Lands yielding rents have long been used as a form of charitable endowment, but they are excluded from the exemption, which implies, a fortiori, that business use is excluded.
Although the benefit to the truck drivers in the occupation of the two houses has not been reduced to a specific sum, it represents a business remuneration: and whether looked upon in the aspect of rent or the nature of the use, it is excluded from the paragraph.
The language of use for the personal property is at least as restrictive as that for the lands; if the word "exclusively" in the first clause is not to be carried forward to the use of all buildings and lands, it is more so ; and the use of personal property for business purposes would likewise be excluded. The separate treatment of personal property and income from that of lands results from the fact that several features of the former had to be specially dealt with, and to have combined the language dealing with both of them would have produced an involved and cumbersome locution.
He then appeals to paragraph (g). The word "charitable" here connotes solely purposes, works and modes of action of the character described: a society that could, for instance, for all of its objects, receive charitable bequests with their peculiar privileges such as perpetual endowment. The illustration by Wigram V-C. quoted indicates that the carrying on of a business as part of a society's functions would rule it out of that category. Charity is essentially voluntary good works and voluntary donations the accepted means of obtaining the material resources necessary to them, both of which are incompatible with the means here.
If paragraph (g) is to be taken to include all societies and institutions having charity as the ultimate destination of their funds by whatever means raised, then clearly a religious society with solely charitable objects and powers would lie within it. At the same time it would be embraced within paragraph (d) since "religious, philanthropic and educational" works include all matters of charity and, as well, some matters of benevolence beyond them. For such an organization, then, what could have been the purpose of introducing paragraph (d)? I should find it difficult to imagine any reasonable or practical purpose except to codify and clarify the position of religious societies, and to enlarge the scope of the exempting uses of their property. But whether to enlarge or restrain, the entire class is clearly intended to be withdrawn from (g).
If this is not so, a religious society with mixed charitable and business objects, or a non-religious organization, both having ultimate charitable purposes, would remain exempt as to all its property under (g), which would mean virtually that the further a society was from a true charity, the broader its exemption. Such an anomaly could not be attributed to the intention of the legislature. What (g) envisages are charitable and literary societies and institutions strictly so-called, with neither objects nor powers nor works outside of those descriptions. That the Companies Act should provide as it does in s. 17(2) (ƒ) that
The Company shall not carry on any business or trade for the profit of its members,
the last six words of which were added in 1944, adds nothing to the argument: whatever its effect may be, it is irrelevant to the meaning of the clause I am considering.
A similar exemption of "the property of a literary or scientific institution", in the Income Tax Act of 1842, language which seems to be the prototype of that of clause (g) here, was dealt with in Manchester v. McAdam 32, by the Court of Appeal and, on appeal, by the House of Lords 33. The city of Manchester had set aside certain buildings for a public library administered by a special Board; its purposes were unquestionably literary, and exemption was claimed for it as a "literary institution". The only doubt arose from the fact that it was maintained by rates. The Court of Appeal, Lindley and Rigby L.JJ., with Brett L.J. dissenting, held that it was not within the exemption because of its support by taxes, that what the statute designed was to encourage gifts of land to such institutions, supported in their activities likewise by other gifts or subscriptions, all for the ultimate benefit to the public. The House of Lords took another view; but Lord Halsbury L.C., dissenting, speaks of the rate "distinguishing it from the voluntary character of a literary and scientific institution such as existed in 1842". In the opinion of the majority, an institution was to be conceived as an objective establishment for the purpose designated, which the library was, and its support by taxes was not a disqualifying factor. But the fact of such a difference of opinion hinging on such an element satisfies me that had the corporation, for instance, carried on a general printing business as auxiliary to its library administration, though with the net revenue devoted exclusively to the purposes of the library, its exemption could not have been seriously argued. The same principle was applied in In re Badger, 34 in which an incorporated body under the Literary and Scientific Institution Act, was held incapable of borrowing money for the purposes of a recreation adjunct.
What is here, then, is not a "charitable society or institution"; it is a society of mixed objects and works or activities, some of which are charitable and some not; and it is not such a society as the legislature had in mind when, in 1875, it first decided to provide so comprehensive an exemption as that of all the property of such owners.
We have today many huge foundations yielding revenues applied solely to charitable purposes; they may consist, as in one case, of a newspaper business ; even if these foundations themselves carried on their charitable ministrations, to characterize them as charitable institutions merely because of the ultimate destination of the net revenues, would be to distort the meaning of familiar language; and to make that ultimate application the sole test of their charitable quality would introduce into the law conceptions that might have disruptive implications upon basic principles not only of taxation but of economic and constitutional relations generally. If that is to be done, it must be by the legislature. Conc