University of Manitoba, v. Rural Municipality of Portage La Prairie., [1935-37] CTC 282

TRUEMAN, J.A.:—By agreement for sale, dated September 8, 1917, the University of Manitoba agreed to sell to James Kirton, who agreed to purchase, certain described lands in the rural municipality of Portage la Prairie, of which the University was then and still is the registered owner with an estate in fee simple. The agreement has the usual covenants and conditions, including a covenant by the purchaser to pay the balance of the purchase- • price by instalments, with interest, on specified dates, and a covenant by the vendor on the payment thereof to convey the lands to the purchaser. In the event of default in the payment of any of the instalments it is provided that the vendor shall be at liberty by notice in writing to cancel and determine the agreement, whereupon all rights and interest of the purchaser therein shall cease and determine. The purchaser went into possession and remained therein until some time in the year 1935, when being in default the vendor cancelled and determined the agreement.

In the years 1928 to 1932, both inclusive, the lands were assessed by the municipality in the name of Kirton. In the years 1933 to 1935, both inclusive, they were assessed in the name of Kirton and the University. The taxes from the date of the agreement up to and including the year 1927 were paid by Kirton. The taxes from 1928 to 1935, both inclusive, are unpaid.

The action is brought to have it declared that said assessments are unlawful and void and to restrain the defendant from selling the lands to satisfy the unpaid taxes.

The University Act of Manitoba, R.S.M. 1913, ce. 201, by see. 58 [now 1936, c. 47, sec. 63(1)] provides that:

"All property, real and personal, owned or held for the use of the university . . . shall be exempt from taxation.”

Sec. 20 of The Assessment Act, C.A. 1924, c. 134 [now 1934, ce. 49, see. 13(3)] declares that:

"‘For the purposes of this Act the party in whose name land appears as owner thereof in any registry or land titles office shall be deemed to be the owner thereof.’’

The action came before Adamson, J. The submission for the municipality was that by the agreement of sale Kirton became the owner.

The learned Judge held the question to be concluded by sec. 20

The appeal by the municipality is largely based upon the judgment of Cameron, J.A., in Leistikow v. Mun. of Ritchot, 33 Man. KR. 302, [1923] 1 W. W. R. 1101. Land purchased by one Challe from the plaintiff under an agreement for sale was assessed to Challe. Promissory notes were given by him for money advanced for seed grain by the defendant municipality and were charged in the tax collector’s roll against the land under sec. 23 of The Seed Grain Act, R.S.M. 1913, c. 178, which provides as follows:

"The amount of any such promissory note as aforesaid may be entered in the collector’s roll of the municipality against any land therein owned by the maker of such note, and thereafter the amount of such note and interest thereon shall be held to be taxes due and in arrear against such land as if duly levied and in arrear under the provisions of The Assessment Act . . . .”

The plaintiff obtained an injunction restraining the municipality from selling his estate or interest in the land. On appeal the injunction was dissolved. Cameron, J.A., for the Court, said :

‘* "Owner’ is not defined in ec. 178, or in The Assessment Act, R.S.M. 1918, c. 134, nor is the term ‘land owned’. It must be admitted that, in the general acceptation, one who acquires land under an agreement for its purchase and takes possession thereof is considered to be the owner. A great deal of farming land in the province is held under such agreements. These very lands would generally be held to be owned by the purchaser. Clearly the Legislature did not intend to use the word ‘owner’ in any restricted or technical sense. It did not intend to restrict it to the registered owner, but rather used it in its wide and liberal sense. It is true that this interpretation may lead to individual cases of hardship and injustice, but, in my opinion, the legislative intent is too clear to allow that consideration to outweigh it. ’ ’

What I said in Houghton Land Corpn. v. Mun. of Ritchot, 30 Man. R. 551, at 568, [1926] 2 W.W.R. 51, at 66, in the following passage, is also referred to by Mr. Miller:

“By sec. 21 of The Assessment Act, R.S.M. 1913, c. 123, it is enacted that for the purposes of the Act the party in whose name land appears as owner thereof in any registry or land titles office shall be deemed to be the owner thereof. In the Leistikow case [supra] Cameron, J.A., who delivered the judgment of the Court, states that ‘owner’ is not defined in The Assessment Act or other legislation. The suggestion is made that the statement disregards sec. 21, which must have been overlooked. That section is in no sense a defining or interpreting provision. Neither the assessor nor any one else is bound by it. It provides the assessor with a working hypothesis in the absence of other evidence. It was the Court’s opinion in the Leistikow case, as has been noticed, that sec. 23 of The Seed Grain Act is not confined to the registered owner. . . . By sec. 22 of The Assessment Act land oecupied by the owner shall be assessed in his name. Sec. 23(2) provides that the assessor shall assess unoccupied lands to the registered owner, unless the real owner gives notice in writing to the assessor. ’ ‘

The expression "‘shall be deemed’’ etc. in a statute is subject: to interpretation: Hill v. East and West India Dock Co. (1884) 9 App. Cas, 448, at page 455.

Mr. Miller is thus quite right in his submission that the point in question cannot be decided on the language of The Assessment Act. This, however, does not dispose of the case. The law is plain that the legal ownership of the land here was never out of the University. A purchaser of land by an agreement for sale is sometimes said, while it is in fieri, to have an equitable estate or a beneficial interest therein, and it is usually so expressed in a caveat lodged under The Real Property Act, 1934, c. 38. This interest does not arise until the payments have been completed, for the reason, which is pointed out in the cases, that until then the agreement never loses its contingent character, and no charge can be made against the land with respect of the interim payments. In Robinson v. Moffatt (1916) 37 O.L.R. 52, Meredith, C.J.C.P. says:

" " Both at law and in equity, the vendor is the owner of the land in the sense of having the lawful title to it; the purchaser has only an equitable right to it but, to that extent, if the agreement be carried out, is treated in equity as substantially the owner, the real owner, or formal owner, if you choose to call him such, though that would not be strictly accurate; the vendor is a trustee for the purchaser, but bound to convey to him only on fulfilment by the purchaser of all things agreed to be done, on his part, before getting the conveyance. An agreement may never be carried into effect, it may end in nothing by various ways, and it may be that Equity, however measured, may refuse specific performance, and so the vendor may remain owner, unaffected by the agreement, without the aid of any Court. But. whether he does or not, he is still owner and can convey his ownership, subject of course to any equitable right which the purchaser may have: he has none if he should refuse or be unable to carry out his contract.”

See also Kimniak v. Anderson (1929) 63 O.L.R. 428; Ceepeear S.D. v. Security Trust Co. Ltd. [1919] 1 W.W.R. 615.

The appeal is dismissed with costs.

Robson, J.A.—This is an appeal by the defendant rural municipality from a judgment of Adamson, J. in favour of plaintiff in an action for declaration that certain lands within the limits of the municipality, the legal title to which was in the name of the University, were at all material times exempt from taxation by the municipality. The University claims the exemption under sec. 58 of c. 201, R.S.M. 1936 [now 1936, ec. 47, sec. 63(1)] whereby it was declared that all property real or personal owned by or held for the use of the Univ ersity should be exempt from taxation.

It seems that on September 8, 1917, the University owned a certain river lot in the parish of Poplar Point and that on that date by agreement in writing the University agreed to sell the said lands to one James Kirton for $3,328 to be paid $960 cash and the balance in eight equal consecutive annual instalments of $346 each with interest at six per cent per annum; all interest sums on becoming overdue were to be treated as purchase-moneys and bear interest at the rate aforesaid and in case default were made in payment of principal or interest or part thereof the whole purchase-money was at the optjon of the plaintiff forthwith to become due and payable; Kirton covenanted to make the payments and plaintiff covenanted then to convey the land; it was provided that in case Kirton made default plaintiff might by notice in writing cancel and determine the agreement whereupon his rights should cease ; that time was to be the essence of the agreement ; it was alleged and admitted that in 1935 Kirton being in default $2,015.40 for principal and $2,907.05 for interest plaintiff validly cancelled the agreement under the provision in that behalf ; that in the years 1928 to 1932, both inclusive, the said lands were assessed for taxes by the assessor of the defendant municipality in the name of the said James Kirton; that in the years 1933 to 1935, both inclusive, the said lands were assessed for taxes in the names of the said James Kirton and the plaintiff; that in the years 1928 to 1935, both inclusive, the defendant levied taxes against the said lands amounting in all to $579.01, and that that amount is unpaid; that upon the execution of the said agreement for sale, the said James Kirton went into possession of the said lands and premises and cultivated the same, and continued in possession thereof until some time in the year 1935 ; that James Kirton made the following payments on account of the said agreement, and no others, viz.:

and that save as aforesaid the said Kirton was unable to make the payments called for by the said agreement; that Kirton paid the taxes from and after September 8, 1917, up to and including 1927.

The lands were assessed in 1928 to 1932 to Kirton and in 1933 to 1935 to Kirton and the University.

The plaintiff’s complaint is that, notwithstanding 1 the statutory exemption referred to, defendant municipality intends to proceed to sell the lands for the taxes since 1927.

Some of the apparent difficulty in this case is caused by two cases in this Court. The first is Leistikow v. Mun. of Ritchot, 33 Man. R. 302, [1923] 1 W.W.R. 1101, where it was held, according to the headnote, that if a purchaser of land under agreement of sale gives notes for money advanced for seed grain under The Seed Grain Act, R.S.M. 1913, c. 178, the amount of the notes may be properly chargeable in the tax collector’s role against the said land as land ‘‘owned by the maker of such note’’ within the meaning of sec. 23 of said Act.

The second case is Houghton Land Corpn. v. Mun. of Ritchot, 35 Man. R. 551, [1926] 2 W.W.R. 51, where it was held apparently for one thing that a purchaser holding under an uncompleted agreement for sale was an ‘‘owner’’ of the land and able to charge the land as such under The Seed Grain Act and also with the cost of a well under The Municipal Act, R.S.M. 1913, c. 133. The decision in the Houghton case was affirmed in the Supreme Court on another ground: [1927] S.C.R. 485. That Court found it unnecessary to deal with the point as to the word “owner,” treated the case purely as an action to set aside a tax sale and confirmed the judgment of this Court on the ground that there were actually some taxes for which the land could be sold and under a statute that was sufficient. The judgment stated that the Court’s decision was irrespective of the right of redemption or of any other recourse by the plaintiff company against the municipality, as to which right or recourse the Court expressed no opinion.

I cannot think that the word ‘‘owner’’ in a statute used in reference to charging or encumbering land can be interpreted according to colloquial usage. In this connection I would quote from Royal Trust Co. v. Kennedy [1930] S.C.R. 602, where, in delivering the judgment of the Court, Neweombe, J. said (p. 611) :

"It must be realized that the vendor, as the owner, is primarily liable for the taxes, and that the covenant, whereby the purchaser becomes bound to pay, while it serves to engage the purchaser’s indemnity for the vendor, does not create any direct obligation as between the purchaser and the municipal authorities.”

I would consider the Leistikow and Houghton cases, supra, as limited by their special facts and not applicable here. If like questions arose again to bring about a reconsideration of ""owner” in taxing Acts, Mr. Justice Newcombe’s words for the Supreme Court would have to be borne in mind.

The action of the assessor does not bind the plaintiff as to liability to assessment: Nickel v. Douglas (1874) 37 U.C.Q.B. 51; London (City) v. Watt (1893) 22 8.C.R. 300.

In Smith v. Vermilion Hills R.M. [1916] 2 A.C. 569, it was held that a tax might be imposed on a person in respect to the interest acquired by him in Crown lands although the lands were exempt and that the assessment should be considered limited to that interest. Such may well be the extent to which the word " " owner ’ ’ should go in taxing statutes in respect to exempt lands.

Counsel for defendant municipality naturally refers to the fact that in equity a purchaser is looked on as owner and the vendor as a trustee-mortgagee, and counsel cited cases of the type of Lysaght v. Edwards (1876) 2 Ch. D. 499. This principle is, I think, limited to the purposes of equity. It could not, through a taxation proceeding, take away a vendor’s exempt security. Even if the vendor had only a lien, which is personal property as stated in Bank of Montreal v. Condon (1896) 11 Man. R. 366; In re Church [1923] S.C.R. 642, and other cases cited by defendant, the lien and defaulted purchase-price are exempt. In the present case the lien has been foreclosed under the terms of the agreement and the title to the land is back in the plaintiff.

Counsel for the University cited several cases such as Robinson v. Moffatt (1916) 37 O.L.R. 52, which, it seems to me, expresses a stronger view of a vendor’s position than did Taylor, C.J. in Bank of Montreal v. Condon, supra.

But whether it is taken that the plaintiff from the taxation standpoint was the owner, as stated by Mr. Justice Newcombe, or that the plaintiff had merely a lien, i.e., a personal security for the purchase-money, the exemption prevailed.

I think this appeal must be dismissed.

RICHARDS, J.A. agrees in the result.

Appeal dismissed.