Bélanger, J.*—The Court, having heard the parties through their respective attorneys, on the merits of the present case, having examined the proceedings, the exhibits filed, the evidence adduced and on the whole deliberated:
Plaintiff instituted her action personally and as universal legatee and executrix of the will of her late husband, John H Jackson, who died on November 11, 1969, while domiciled in the Province of Quebec, in an airplane accident, while he was employed by a joint venture called “Acres-Canadian Bechtel of Churchill Falls’. The above facts are not contested by defendant who also admitted the probate copy of the last will and testament of the late John H Jackson filed as Exhibit F-1, together with the following allegations of plaintiff’s declaration:
The Defendant, through the Department of Revenue, assessed Quebec succession duties on, amongst other property, an amount of $25,000 being the proceeds of London Life Insurance Company Policy No. 3728613-8.
8. The Defendant, through the Department of Revenue, also assessed Quebec succession duties on an amount of $125,000,. being a sum payable in virtue of The Insurance Company of North America’s Group Policy ABL 604080/OK 2997.
9. The said policy is an accident policy, which provides for payments of certain amounts for certain types of accidents, including death. A certified copy of the said policy (in two separate parts) is filed herewith as Exhibit -2.
11. All Quebec Succession duties assessed In respect of the late John H. Jackson have been paid (with interest from and after May 11, 1970) but under protest and under reserve of the right to sue for recovery thereof.
Claiming that the proceeds of the above insurance policies should not have been assessed and that she made an overpayment in the amount of $26,722.98, plaintiff concludes as follows:
WHEREFORE PLAINTIFF PRAYS FOR JUDGMENT:
(a) Declaring the Quebec succession duties assessment in respect of the estate of the late John H. Jackson incorrect and invalid to the extent that it imposes duty on the following, namely:
— London Life Insurance Company,
Policy No. 3728613-8—Amount $25,000
— Insurance Company of North America,
Group Policy ABL 604080/OK 2997—Amount $125,000; and
(b) Ordering the Defendant to reimburse to Plaintiff the sum of $26,722.98.
The whole with interest from May 11, 1970 and costs.
In his contestation, defendant admits that the London Life Insurance Company policy number 3728613-8 was applied for by plaintiff but denies that she personally paid and bore the premiums, alleging that the deceased paid for same. With regard to the assessment of the proceeds in the amount of $125,000 of the group insurance policy, defendant alleges the following:
3. Le produit de la police d’assurance désignée au paragraphe 8 de la déclaration sous le numéro ABL-604080/OK 2997 a été inclus de bon droit dans l’actif de succession John H. Jackson puisqu'il s’agit du produit d’une police d’assurance payable à la mort de la personne sur la tête de qui la police a été contractée.
In conclusion, defendant prays for the dismissal of the action with costs.
In the answer to plea of plaintiff there are no new allegations of facts.
At the trial, no evidence was presented because a settlement had already been reached between the parties with regard to the proceeds of the London Life policy and because all the facts required to render judgment on the proceeds of the group policy were uncontested and already in the file.
With regard to the assessment of the proceeds of the London Life Insurance Company policy number 3728613-8, in the amount of $25,000, the following settlement was confirmed by the parties in Court: it was acknowledged that three-quarters of the premiums of the said policy had been paid and borne by the plaintiff who was therefore entitled to the exemption found in the second paragraph of subsection 26(1) of the Succession Duties Act, RSQ 1964, c 70; consequently, the parties confirmed that judgment should be rendered confirming:the settlement and ordering defendant to reassess the estate of the late John H Jackson by deleting from the dutiable assets and from the aggregate value three- quarters of the said amount of $25,000, being $18,750, and to make the appropriate refund of overpaid succession duties.
Both parties also confirmed the agreement reached between them to the effect that judgment should be rendered each party paying its own costs, whatever the conclusions reached by the Court.
The remaining issue therefore concerns the sum of $125,000 paid by Life Insurance Company of North America in virtue of its group policy, filed by plaintiff as Exhibit P-2, in two separate parts bearing respectively numbers ABL-604080 and OK-2997. For more conciseness, both parts forming Exhibit P-2 shall be referred to as the “group policy” whenever it is not necessary to refer to one of the parts separately.
In the group policy, the insurer is mentioned under the name. of “Life Insurance Company of North America”. The policyholder is mentioned as “Bechtel Corporation and Affiliated Interests’. The insurance is effective on a term basis and the insured are the persons falling under the descriptions to be found in several schedules attached to and forming part of the policy. It is not contested that plaintiff’s late husband was one of the insured to whom the insurance applied under the group policy.
For the purposes of this case, the following excerpt from part number ABL-604080, starting at page one, is of special interest:
5. Scope of the Insurance
Subject to all of the Exclusions, Provisions and other terms of this policy, the Company hereby insures the persons described in Schedule 1, each herein called the Insured, against loss resulting directly and independently of all other causes from accidental bodily injuries which arise out of the hazards described in Schedule II and are sustained by the Insured during the term of this policy, herein called such injuries, to the extent hereinafter provided.
If within one year from the date of accident such injuries shall result In death of the Insured, dismemberment or loss of sight, the Company will pay for
Loss of Life or Two or more members
The Principal Sum;
Loss of One member
One-half the Principal Sum.
Such payment shall be in addition to any other indemnity payable to the date of loss, but only one amount, the larger applicable amount shall be payable for all such losses resulting from one accident.
The “Principal Sum” is the amount specified as such in Schedule I. “Member” shall mean a hand, foot or eye. “Loss” shall mean, with respect to hands and feet, actual severance through or above wrist or ankle joints; with respect to eyes, entire and irrecoverable loss of sight.
Immediately after, the insurer proceeds to define what is called “coverage B” for permanent total disability; then the hazards from which the accidental bodily injuries must arise for the loss to be covered are described in Schedules Il A, B and C which form part of the policy.
In part number OK-2997 of the group policy, the insurer agrees with the policyholder ‘‘to insure such eligible persons who are identified on the Schedule of Insureds of this policy, herein called the Insured, against specified loss described in the Description of Coverage resulting directly and independently of all other causes from bodily injuries caused by accident occurring while this policy is in force, herein called such injuries”.
The following excerpt is from the “description of coverage” forming part of the policy:
DESCRIPTION OF COVERAGE
Coverage A — Loss of Life, Limb or Sight Indemnity:
If such injuries shall result in any one of the following specific losses within one year from the date of accident, the Company will pay the benefit specified as applicable thereto, based upon the Principal Sum stated in the Policy Schedule; provided, however, that no more than one (the largest) of such benefits shall be paid with respect to injuries resulting from one accident.
LOSS of life The Principal Sum
Loss of two or more members The Principal Sum
Loss of one member One-Half The Principal Sum
Loss of thumb and index finger of the same
hand One-Quarter The Principal Sum
After the above coverage A, permanent total disability is defined under the title “coverage B” substantially in the same terms as in the first part.
From the above, one cannot escape the conclusion that it is accident insurance which is underwritten in the group policy. The fundamental condition before any right whatever can be considered as flowing from such insurance is the occurrence of one of the hazards described in the group policy causing accidental bodily injury. Unlike life insurance, loss of life is not fundamentally the occurrence from which the right of the insured emanates but is rather the happening which will serve to establish the amount of the indemnity. In other words, accidental bodily injuries arising out of the hazards described in the group policy are the risks or perils insured against and it is the amount of the indemnity which will depend on the seriousness of the injuries, the principal sum becoming due if such injuries result in death of the insured within one year from the date of the accident.
Of course, it is recognized that life insurance may also be a contract by which the insurer undertakes to pay insurance on the duration of the life of a designated human being, after the expiration of a certain period in his lifetime, but such insurance is even further apart from the insurance described in the group policy.
Accident insurance and life insurance are different in many respects, some of which are described in the following citations:
Halsbury’s Laws of England, 3rd edition, vol 22 at page 293 (referring to personal accident insurance in paragraph 583):
It resembles life insurance, and differs from other types of insurance in that it is not a contract of indemnity: it is merely a contract to pay a sum of money on the happening of a specified event, namely the sustaining by the assured of personal injury by such accidental means as may be defined in the policy. The event may involve the death of the insured, but the insurance Is not for that reason a contract of life insurance. In the case of life insurance, the assured is bound to die some day, the uncertainty being as to the date when the death will take place. In the case of personal accident ‘Insurance, on the other hand, no accident may ever happen; and, even if it does, there is no certainty that it will result in death or disablement to the assured.
Wyman, Laws of Insurance, page 278:
“Life Insurance” has been defined by statute in the various provinces as fa contract by which the insurer undertakes with the insured to pay insurance money contingently on the death, or on the duration of the life of a designated human being”, (a) The contract is not one of indemnity but obligates the insurer to pay a sum certain, on the death of the person or after the expiration of a certain period in his lifetime. The consideration is the payment of certain periodic installments called premiums (b).
The contract is evidenced by a document called a policy. Though it has been argued that the contract is an annual one renewed from year to year the weight of authority is that the contract is entire and indivisible and the periodic payments of premium do not represent any particular portion of the moneys accruing due under the contract.
The above comments are substantially in conformity with Article 2589 of our Civil Code reading as follows:
2589. In life insurance the sum insured may be made payable upon the death of the person upon whose life it is effected; or upon his surviving a specified period, or periodically so long as he shall live, or otherwise contingent upon the continuance or determination of life.
It is apparent that the premium for protection during a specified period of time against an accident which may never occur, is not to be calculated on the same basis as the premium in life insurance, the contract being entire and indivisible and the assured being bound to die some day. One should note also that, in accident insurance, the insurance purchasing value of the premium is completely exhausted at the end of the specified protection period, which is not the case in life insurance, with the consequence that the estate of the insured is affected differently.
Laverty, The Insurance Law of Canada, page 412:
Life Insurance and its Relation to Accident Insurance
The basic distinction between a life and an accident policy lies in the fact that almost invariably a straight life policy is not an insurance for a single year with a privilege of renewal from year to year by paying the annual premium, but is an entire contract of insurance for life, subject to discontinuance and forfeiture for non-payment of any of the stipulated premiums; whereas accident insurance is invariably from year to year or for a voyage, and when a time policy, it can be discontinued by either party at the end of the period contracted for—usually one year.
It has been held by the Supreme Court of Canada that “accident insurance” is not insurance of the character embraced in the term “insurance on life” contained in an application.
For a number of years the legislative power of this province has considered accident insurance and life insurance as two distinct classes of insurance while enumerating the different classes of insurance which a company may be incorporated to transact:
Insurance Act, RSQ 1964, c 295, subsection 8(1):
8. (1) A company may be incorporated under the preceding sections of this division for the purpose of transacting the following classes of insurance and reinsurance subject to and in accordance with the provisions of this act, provided, however, that no company may be incorporated under this act to transact both fire insurance and life insurance: Accident, automobile, aviation, larceny, housebreaking or burglary, credit, explosion, fire, forgery, guarantee, hail, industrial, inland marine, inland transportation, life, livestock, ocean marine, plate glass, sickness, sprinkler leakage, steam boiler, tornado, weather or any other class of insurance not specially provided for in this section.
The proper conclusion is that the amount of $125,000 paid in virtue of the group policy became payable in virtue of a contract of accident insurance.
In his plea, defendant alleged that the above amount was rightly assessed in respect of the estate of the late John H Jackson as the proceeds of an insurance policy due by reason of the death of the person on whose life the insurance was effected. Said assessment was made under the Succession Duties Act of this province, RSQ 1964, c 70, the following sections of which were particularly referred to:
2. All property, moveable or immoveable, the ownership, usufruct or enjoyment whereof is transmitted owing to death, shall be liable to duties calculated upon the aggregate value of the property transmitted, at the rates fixed in section 9.
4. The word “property” within the meaning of this division includes all property, moveable or immoveable, situate within the Province, and all debts which were owing to the deceased at the time of his death, or are payable by reason of his death, and which are either payable in the Province or are due by a debtor domiciled therein; the whole whether the deceased at the time of his death had his domicile within or without the Province, or whether the transmission takes place within or without the Province.
The deceased’s interest in an insurance contract on the life of another person shall be property within the meaning of this act.
However, the sum of money due by an insurer by reason of the death of an insured whose domicile is not in this Province at the time of his death shall not be deemed to be property situate within the Province, although it shall be included in the aggregate value for the purpose of determining the rates of duties.
26. Notwithstanding any provision inconsistent herewith, the proceeds of insurance policies, including those issued or appropriated pursuant to the Husbands and Parents Life insurance Act (Chap. 296), due by an insurer by reason or on account of the death of the person on whose life the insurance was effected, shall be deemed to be property whereof the ownership, usufruct or enjoyment is transmitted owing to such death and shall be subject to payment of the duties provided for by section 9, according to the degree of relationship which existed between the beneficiary and the person on whose life the insurance was effected, even when the latter did not himself take out the insurance or pay the premiums thereon.
However, the proportion of the sums payable by an insurer, corresponding to the premiums paid by the beneficiary thereof personally and actually borne by him, as compared to the total amount of premiums, and the portion of the said sums which the beneficiary or assignee thereof has otherwise acquired for full valuable consideration shall not be subject to the duties imposed by this act nor included in the aggregate value.
Whenever, after the insured’s death, the beneficiary of an insurance shall relinquish, assign or transfer gratuitously the entirety or part of his rights to another person, the latter shall be considered pro tanto as the direct beneficiary thereof and shall be liable for the payment of the duties imposed by the present act.
The whole matter is really governed by section 26 as the idemnity paid by the insurer in relation with the death of the de cujus can only be part of the property transmitted owing to his death if deemed to be so in virtue of section 26. it seems clear that, before the death of the insured, the insurance indemnity was not a property or a debt included in his estate, which could then be transmitted, unless section 26 is applicable to it.
Leaving out the irrelevant words, the text to be interpreted reads as follows: “the proceeds of insurance policies . . . due by an insurer by reason or on account of the death of the person on whose life the insurance was effected, shall be deemed to be property whereof the ownership . . . is transmitted owing to such death . . .”
It is the opinion of this Court that the indemnity paid in virtue of the group policy is not covered by the above fiction of law for two reasons:
(a) it did not become due by the insurer by reason or on account of the death of the insured but because the insured “directly and independently of all other causes” suffered accidental bodily injuries arising out of the hazards described in the policy which resulted in his death; as already mentioned, the accident was the primordial factor creating the right;
(b) the insurance in question was not effected on the life of the insured but on the risks of accidents through hazards described in the policy.
Nowhere in the above text is there any reference to accident insurance end it seems to this Court that the proceeds of such insurance could not be considered as included without supplying missing words. It is a well settled rule of law that the subject is not to be taxed unless the language of the statute clearly imposes the obligation, that all charges upon the subject must be imposed by clear and unambiguous language. This language musi not be strained in order to tax a transaction which, had the legislature thought of it, would have been covered by appropriate words. Maxwell on the Interpretation of Statutes, 12th edition, page 256.
Defendant stressed the fact that in the French text the words on account of the death of the person on whose life the insurance was effected” were translated as follows: “à l’occasion du décès de la personne sur la tête de qui l’assurance a été contractée”. In the opinion of the undersigned, the use of the words “la tête” instead of the words “the life” cannot change the meaning of the section to the point of including accident insurance; moreover, in the Canadian and British Insurance Companies Act, RSC 1970, c 1-15, subsection 2(1), under the term “policy in Canada”, with respect to life insurance, the terms “a policy effected upon the life of a person” are translated as follows: “une police souscrite sur la tête d’une personne”.
The Supreme Court of Canada decided that accident insurance is not insurance of the character embraced in the terms “insurance on life” and, consequently, that an applicant for life insurance, in replying to questions as to insurance on his life then in force, committed no breach of warranty in not referring to the accident insurance policies which he held: Metropolitan Life Ins Co v The Montreal Coal and Towing Company, 35 SCR 266.
The Exchequer Court of Canada gave its interpretation of an equivalent provision, subsection 3(4b) of the Canada Estate Tax Act, SC 1958, c 29, expressed partly in the same words. The provision reads as follows
3. (4b) For the purposes of paragraph (k) of subsection (1), any amount payable in respect of the death of a person under a policy of insurance (other than a policy of insurance owned as described in paragraph (m) of subsection (1)) under which any life insurance was effected on the life of that person in respect of, in the course of or by virtue of his office or employment or former office or employment as an employee of any other person, .
It was decided that the above text could not be interpreted as including accident insurance: MNR v Estate of Sidney William Worsley, [1966] CTC 804; 67 DTC 5011.
Of course, the words “life insurance” are mentioned in the section but we also find the words used by the provincial legislator about insurance effected on the life of a person. In the federal section, there are more reasons to exclude accident insurance from the provision; yet the provincial provision is a “deeming section” enacted to create a fiction of law and its text cannot be interpreted as covering accident insurance without adding words which were not provided by the legislator. It is not the function of the Courts to supply missing words in a statute, especially a deeming provision, or to give it an effect that cannot be plainly gathered from the words actually used.
The conclusion of the Court therefore is that the proceeds of the group policy are not to be deemed to be property whereof the ownership is transmitted owing to the death of the insured and that, consequently, said proceeds were not dutiable assets. A refund of the duties paid in relation with the amount of $125,000 received in virtue of the group policy should therefore be made by defendant.
In her conclusions, plaintiff claims interest from May 11, 1970 on the overpayment of duties which she made. She is not entitled to such interest as there can be no recovery of interest against the Crown unless provided by contract or statute, which is not the case with regard to the present claim: The King v Carroll, [1948] SCR 126; The King v Racetts, [1948] SCR 28; Hochelama Shipping & Towing v The King, [1944] SCR 138; Rolland & Trust Général v The King, [1950] CS 220.
However, if plaintiff has paid interest on the succession duties which were assessed, she is entitled to an appropriate refund of said interest proportionate to the duties which were overpaid.
CONSIDERING that plaintiff is entitled to.a reassessment of the estate of the late John H Jackson by deleting from the dutiable assets and from the aggregate value:
(a) an amount of $18,750 representing 75% of the proceeds of the London Life Insurance Company policy number 3728613-8;
(b) an amount of $125,000 representing the payment made by Life Insurance Company of North America in virtue of its group policy, filed by plaintiff as Exhibit P-2, in two separate parts bearing respectively numbers ABL-604080 and OK-2997;
CONSIDERING that the Quebec succession duties assessment already made in respect of the estate of the late John H Jackson is incorrect and invalid to the extent that it imposes duty on the assets mentioned in the preceding paragraph;
CONSIDERING the plaintiff is entitled to a refund equivalent to the difference between the amount of the succession duties and interest which she paid in virtue of the incorrect and invalid assessment previously made and the amount of the Quebec succession duties with interest which she should have paid at the time if the assessment had been made without including 75% of the proceeds of the London Life Insurance Company policy and the total proceeds from the Life Insurance Company of North America group policy;
CONSIDERING that plaintiff is entitled to no interest on the said refund;
CONSIDERING the agreement reached between the parties that they should each pay their own costs.
DOTH MAINTAIN in part the action of plaintiff;
DECLARE that the Quebec succession duties assessment in respect of the estate of the late John H Jackson is incorrect and invalid to the extent that it imposes duty on the following, namely:
London Life Insurance Company, policy number 3728613-8—amount $18,750
Life Insurance Company of North America, group policy ABL-604080/ OK-2997—amount $125,000
ORDER the defendant to reimburse to plaintiff an amount equivalent to the difference between the succession duties and interest paid according to the assessment presently declared incorrect and invalid and the amount of succession duties and interest which should have been paid according to the assessment which should have been made without including the two amounts mentioned in the previous paragraph in the dutiable assets.
The whole without interest on the refund and each party paying its own costs.