SAINT-PIERRE, Acting Judge:—This is an appeal from a decision of the Minister of National Revenue who, on September 17, 1946, fixed the amount of duties owed by Dr. Chipman on the estate of his wife, Maud Mary Angus, at $188,165.20.
On August 9, 1946, the sum of $113,917.30 was paid but the amount claimed by the Minister is $74,247.90 plus interst, at the date of the account, of $1,249.92 making a total of $75,497.82.
The question submitted is whether clause 3(f) of the will of Maud Mary Angus Chipman comes under the provisions of Section 31 of the Act to authorize the levying of duties in respect of successions.
Clause 3 of the will reads as follows :
First the testator appoints her husband, Dr. Chipman, her brother, D, Forbes Angus, and The Royal Trust Company as trustees to administer and dispose of the trust in the following manner :
(a) to pay all debts, funeral expenses and succession duties,
(b) to deliver a special bequest of jewellery to her niece Mrs. Vanklynn,
(c) to give her husband the use of her home so long as he may desire,
(d) to give her husband the use of her furniture and effects during his lifetime.
(e) to divide the sum of $5,000.00 amongst her employees,
(f) to pay to my husband, the said Walter William Chipman, during the remainder of his lifetime, the net interest and revenues from the residues of my estate and in addition thereto to pay to my said husband from time to time and at any time such portion of the capital of my estate as he may wish or require and upon his simple demand, my said husband to be the sole judge as to the amount of capital to be withdrawn by him and the times and manner of withdrawing the same, and neither my said husband nor my executors and trustee shall be obliged to account further for any capital sums so paid to my said husband.
(g) upon her husband’s death to dispose of the estate ‘‘as it may then exist ’ ’ as follows :
1. My jewellery, pictures, household furniture and household effects shall be disposed of in accordance with any memorandum I may leave with respect to the same and failing any such memorandum then the same shall be divided among my residuary legatees hereinafter named in the same manner as the residue of my Estate.
2. To pay to The Royal Institution for the Advancement of Learning (McGill University), of Montreal, the sum of fifty thousand dollars as a special legacy.
3. To pay to the Royal Victoria Hospital, Montreal, the sum of fifty thousand dollars as a special legacy.
4. To pay to The Art Gallery, presently situate at the corner of Ontario Avenue and Sherbrooke Street West, Montreal, the sum of fifty thousand dollars as a special legacy.
9. To pay to The Church of St. Andrew and St Paul, presently on Sherbrooke Street West, Montreal, the sum of twenty-five thousand dollars. The receipt of the treasurer for the time being of each of the foregoing institutions shall be a good and valid discharge to my Executors and Trustees.
6. To divide the capital of the residue of my Estate between my brothers, sisters, niece and nephews as follows :—One-sixth thereto to my brother, D. Forbes Angus, of the City of Montreal; one-sixth thereof to my brother William Forrest Angus of the City of Montreal; one-sixth thereof to my brother, David James Angus, presently of Victoria, British Columbia; one-sixth thereof to my sister, Margaret Angus wife of Dr. Charles Ferdinand Martin, of the City of Montreal ; one-sixth thereof to my sister, Dame Bertha Angus widow of Robert MacDougall Paterson, of the City of Montreal; one- eighteenth thereof to my niece, Gyneth Wanklyn, widow of Durie McLennan, of the City of Montreal; one-eighteenth thereof to my nephew, David A. Wanklyn, of the City of Montreal; and one-eighteenth thereof to my nephew, Frederick A. Wanklyn, presently of Nassau, Bahamas; and I hereby constitute my said brothers, sisters, niece and nephews my universal residuary legatees in the aforesaid proportions.
The Share of any of my brothers or sisters who may have predeceased leaving lawful issue shall accrue in favour of such issue equally by roots and failing issue such share shall be divided among my remaining brothers and sisters or their lawful issue by roots.
The Share of either of my said nephews or niece who may have predeceased leaving lawful issue shall accrue to such issue equally by roots and failing issue such share shall be divided between my remaining nephews or niece and the issue of any predeceased nephew or niece by roots.
Should any beneficiary become entitled to a share of my Estate under any of the foregoing provisions while a minor the net revenues therefrom shall be expended for his or her maintenance, education and support by my Executors and Trustees through such channels as they may think advisable, but it shall not be necessary to spend the whole of such net revenue unless my Executors and Trustees so decide and such net revenues may be allowed to accumulate in whole or in part and spent later as may be decided, the whole in the discretion of my Executors and Trustees, and after such beneficiary attains the age of majority the capital of his or her share or so much thereof as then remains shall be made over to him or her in absolute ownership.
Hence, under clause 3(f) Dr. Chipman had the power to apply to the trustees and, upon his simple demand, be paid the capital he wished and neither Dr. Chipman nor the trustees were obliged to account for the amounts so paid to Dr. Chipman.
In the face of this clause Dr. Chipman had two alternatives, namely to accept it and be paid the amounts he wished or to refuse it. There is no doubt that if he refused the clause the provisions of Section 31 could not apply to him. On the other hand, having accepted clause 3(f) of the will, does Section 31 of the Succession Duty Act apply ?
This Section 31 reads as follows :
4 ‘31. Where a general power to appoint any property either by instrument inter vivos, or by will, or both, is given to any person, the duty levied in respect of the succession thereto shall be payable in the same manner and at the same time as if the property itself had been given, devised or bequeathed, to the person to whom such power is given. ’ ’
Section 31 is complemented by Section 4(1) which reads as follows:
‘ ‘A person shall be deemed competent to dispose of property if he has such an estate or interest therein or such general power as would, if he were sui juris, enable him to dispose of the property and the expression “general power’’ includes every power or authority enabling the donee or other holder thereof to appoint or dispose of property as he thinks fit, whether exercisable by instrument inter vivos or by will, or both, but exclusive of any power exercisable in a fiduciary capacity under a disposition not made by himself, or exercisable as mortgagee.”
Therefore, as a result of these two sections the general power to appoint property includes the right or authority enabling the donee or other holder to appoint or alienate property.
In the case of clause 3(f) of Mrs. Chipman’s will, she gives her husband the general power to be paid the capital he wishes and as a result of this payment of capital it follows that by this very fact he obtains general power to appoint the capital he has received either by donation or by will.
Section 31 contains two parts, the first establishing the fact of an existing circumstance in a will and the second determining how, in such case, the succession duty is to be levied.
If a circumstance exists as determined by the first part, that is, that a person by his will have given another person general power to appoint any property either by instrument inter vivos or by will, or by both, then the second part is applicable and, in this case, the duties levied in respect of the succession of a person who has given such general power are payable in the same manner and at the same time as if the property itself had been given, devised or bequeathed to the person to whom such power is given.
In Mrs. Chipman’s will, since she gave her husband a general power over the capital of her estate, Dr. Chipman who obtained this power must pay the duties levied in respect of Mrs. Chipman’s estate in the same manner and at the same time as if the property itself had been given, devised, bequeathed to him.
The purpose of Section 31 is to attain the person who has a general power to appoint and to determine what duty he is to pay or at what time. In my opinion, therefore, the provisions of Section 31 apply to the will of Mrs. Chipman.
Counsel for the Crown bases his argument particularly on the case of Cossitt v. Minister of National Revenue, [1949] Ex. C.R. p. 339; [1949] C.T.C. 187.
A testamentary clause similar to the one in this case was concerned and Mr. Justice O’Connor ruled that Section 31 was applicable in that case.
The clause in the Cossitt case read as follows :
‘‘3(f). To invest and keep invested the residue of my estate and to pay the net income derived therefrom to my said son Edwin Comstock Cossitt during his lifetime, with power to him at any time to use for his benefit such amount or amounts out of the capital of the said residue as he may wish.
(g) Upon the death of my said son, the residue of my estate or the amount thereof remaining shall be held in trust for the issue of my said son or some one or more of them in such proportion and subject to such terms and conditions as my said son may by his last will direct, provided.”
Mr. Justice O’Connor declared, on page 343 :
1 ‘The effect of Section 31, in my opinion, is that where a general power to appoint any property is given to any person, such person shall be deemed to have derived a succession of such property from the decease.
In my opinion, there was not a succession within section 2(m) but there was a succession within Section 31.
And under Section 31, the duty levied in respect of such succession is payable in the same manner and at the same time as if the property itself had been given to the appellant.”
I share the views expressed by Mr. Justice O’Connor in the case of Cossitt v. Minister of National Revenue.
Consequently, for the above-mentioned reasons I dismiss the appeal with costs.
I have examined the authorities cited by counsel for both parties and I do not share the views of the appellant’s counsel that articles of the Civil Code should be applied to this case where it is a matter of statute law as regards the levying of Federal taxes.
Appeal dismissed.