Harvey C.J.A.:—This is an appeal by the plaintiff from the judgment of Shepherd J., on his interpretation of certain provisions of the Provincial Income Tax Act (c. 5 of 1932).
The James Ramsey Co. is a provincial corporation.
Section 8 of the Act makes provision for the taxation of the income of companies, but s. 20(1) provides that: *"20(1) The income of a personal corporation, in lieu of being assessed the tax prescribed by section 8 of this Act, shall on the last day of each year be deemed to be distributed as a dividend to the shareholders thereof and shall in their hands constitute taxable income for each year in the proportion hereinafter mentioned, whether actually distributed by way of dividend or not.’’
“Personal corporation’’ is defined by s. 2(g) as “a corporation or joint stock company (no matter when or where created) controlled directly or indirectly by one person, who resides in Alberta, or by one such person and his wife or any member of his family, or by any combination of them, or by any other person or corporation on his or their behalf, whether through holding a majority of the stock of such corporation, or in any other manner whatsoever, the gross revenue of which is to the extent of one quarter or more derived from one or more of the following sources, namely:” The sources of income specified include rent.
The facts are all agreed on and it appears that for the years 1931, 1932 and 1933 none of the income of the company was distributed and that more than a quarter of it was derived from rent. It also appears that the appellant resided in Alberta during these years, and that of the 1,000 shares of the company’s capital he owned 480 shares and his son T. N. Ramsey owned 100 shares, the two together having in the words of the stated ease ‘‘control of the said company by together holding the majority of the stock thereof.”
The company for the years in question filed its returns as an ordinary corporation and tendered the appropriate tax which however the Superintendent of Income Tax refused to accept. The latter claimed that the company was a ‘‘personal corporation” and assessed its members as individuals under s. 20(1).
The appellant appealed from this assessment but up to the present has failed in his appeal.
T. N. Ramsey while a son of the appellant is a married man with a wife and children who all lived in his own household apart from the appellant and he was not dependent on the appellant for support.
The sole question at issue is whether on the facts stated T. N. Ramsey is a member of the appellant’s family within the meaning of the term as used in s. 2(g).
Section 2(g) appears to have been taken in general terms from the Dominion Income War Tax Act where it first appeared in 1926 (ce. 10). In Plaxton’s work on the Dominion Act published this year only one decision on this provision is referred to, Port Credit Realty Ltd. v. Minister of National Revenue, [1937] 4 D.L.R. 17, and it furnishes no assistance. In that case the owner of almost the whole of the shares died and left his property to trustees, the beneficiaries being his wife and five children who received the income and paid income tax as individuals for several years. Then the Commissioners of Income Tax took the position that the company was not a personal company and assessed it as an ordinary company. It will be seen that it is the converse of the present case. It was taken for granted that the wife and children constituted a family and there is no suggestion that they did not all live in one household and it was held by Angers J. that the company being controlled by the executors and trustees fell within the clause “controlled by any other person or corporation or any combination of them on his or their behalf.’’
While there seems to be no other decision on this section there seems also to be a great dearth of authority on the meaning of the word ‘‘family’’ where used in a statute as opposed to its use in wills. The word of course may be used in different senses and the difficulty is to determine what sense is intended here there being no interpretation given by the statute.
In Rex v. Darlington, 4 T.R. 797, 100 E.R. 1308, the Court was considering an old Statute of William III which provided that an unemployed person, a charge on the parish in which he resided who thought he could obtain employment in another parish and so cease to be a charge, could obtain a certificate from his own parish directed to the other parish which certificate ‘‘shall oblige the said parish or place to receive and provide for the person mentioned in the said certificate together with his or her family, as inhabitants of that parish whenever he or she as they shall happen to become chargeable to, or be forced to ask relief of the parish.’’
Lord Kenyon C.J. said (p. 800): ‘‘In common parlance, the family consists of those who live under the same roof with the pater familias: those who form (if I may use the expression) his fireside. But when they branch out, and become the heads of new establishments, they cease to be part of the father’s family.” Buller J. said (p. 802) : ‘‘This Act is then confined to the person to whom the certificate is granted, ‘together with those who reside with him;’ the words are, ‘together with his family/ ” and Grose J. said (p. 804): “When the son becomes the head of a new branch, and has children of his own, he ceases to be part of his father’s family; and his children then form a part of his own family.”
The above decision was considered and adopted by the Supreme Court of Massachusetts in Dodge v. Boston & Providence Railroad Corp. (1891), 154 Mass. 299. It is stated (p. 301): ‘‘The word ‘family’ has several meanings. Its primary meaning is the collective body of persons who live in one house and under one head or management. Its secondary meaning is those who are of the same lineage, or descend from one commonprogenitor.
“Unless the context manifests a different intention, the word ‘family’ is usually construed in its primary sense.’’ The Massachusetts decisions though not decisive are always looked on with great respect and the rule laid down in the Dodge case seems to be reasonable and deserving of being adopted.
It is clear that in the primary sense of the word “family,” T. N. Ramsey is not a member of the appellant’s family. Then can one gather from the statute any reason to think that any other sense was intended? In my opinion so far as one can obtain any assistance from the terms of the Act it is rather the other way. The important element to constitute a “personal corporation’’ is control by a person, actual or virtual. One would think that the head of a household would be able to exercise greater control over his household than over his descendants who might be scattered over the world, even though limited to his sons and daughters, and so over the company of which they were members.
I can see nothing else to furnish any guide and it would seem to follow that the word ‘‘family’’ should be construed in its primary sense and therefore as not including T. N. Ramsey.
I would therefore allow the appeal. The appellant should have his costs both here and on the appeal to a Judge. As the point is one of importance the scale of column 5 should apply.
Appeal allowed.