GILLANDERS J.A.:—This is an appeal by the City Corporation by way of stated case under s. 85 of the Assessment Act, R.S.O. 1937, c. 272, from the judgment of His Honour Frank Denton, Judge of the County Court of the County of York, dated February 23, 1939, holding the respondent liable for business assessment aS a person carrying on the business of a manufacturer under s. 8(1) (e) of the said Act and not as a person carrying on the business of a wholesale merchant under s. (1) (c).
The case stated by the learned County Court Judge setting out the facts, his decision and the questions for this Court, is as follows :
““The respondent is a company incorporated under the Dominion Companies Act, with head office in the City of Montreal, Province of Quebec. It carries on the business of a manufacturer of silk goods and silk and cotton-threads, and the sale of the said goods which it manufactures. Its factories are located in the Province of Quebee and no actual fabrication of goods is done in the Province of Ontario.
‘‘In the City of Toronto, the respondent for the purposes of its business, is the tenant of the third floor of a building known as No. 94 Wellington St. West, which part is assessed for $13,740. These premises are used as an office, and for the purpose of maintaining a stock of goods of its own manufacture until such goods are sold. At the hearing before me, Mr. Russell A. Haydon, the local manager, employed by the respondent, gave evidence stating he was in charge of selling and distributing the goods of the respondent in Ontario to the retail, wholesale and manufacturing trades. He stated that he and his assistants were fully engaged in taking orders for goods, and that such goods were delivered from the premises on Wellington St., if in stock, or if not, from the factories in the Province of Quebec.
“The Assessment Roll for Ward 3 upon which the respondent was assessed was returned in the year 1938 on August 6. The respondent was assessed pursuant to the provisions of s. 8(1) (c), of the Assessment Act, R.S.O. 1937, ce. 272, for 75% of the assessed value of the premises occupied by it, or for $10,305. The respondent appealed to the Court of Revision for the City of Toronto claiming that it should be assessed for business assessment under el. (e) of the said s. 8(1) of the Assessment Act, or for 60% of the assessed value of the premises occupied by it, or for $8,244, but this appeal was dismissed.
“The respondent appealed and its appeal came on before me on February 23, 1939. After hearing the evidence adduced and counsel for both parties, I gave judgment allowing the appeal and directed that the assessment of the respondent for business tax be reduced from $10,305 to $8,244. My reason for such finding was that I considered that the respondent was not occupying the said premises for the purpose of carrying on the business of a wholesale merchant, as contended by counsel for the appellant Corporation.
"‘At the hearing, counsel for the said appellant asked that I grant a stated case, pursuant to the provisions of s. 85 of the said Assessment Act, and I now submit the following question for the Court of Appeal for Ontario:
"‘1. Upon the facts above stated and upon the true construction of the Assessment Act, particularly s. 8(1)(c), (e) thereof, as applied to such facts, was I right in holding that the respondent should be assessed for business tax in respect of the said premises pursuant to the provisions of the said el. (e) ?
2. If Q. 1 is answered in the negative, is the respondent liable to business assessment pursuant to the provisions of the said el. (c)?"
The vital question to consider is whether the respondent company is "occupying or using’’ the premises in respect of which it is assessed for the purpose of "‘carryng on the business of a wholesale merchant/ ‘ or for the purpose of ‘‘carrying on the business of a manufacturer.’’ Counsel for the respondent does not contend the respondent should not be assessed under s. 8 (1)(e), as carrying on the business of a manufacturer in the premises in question, but contends the respondent is not assessable under s. 8(1) (c) as carrying on the business of a wholesale merchant.
As set out in the stated case the actual fabrication of the respondent’s goods is done in the Province of Quebec, and the premises in question in the City of Toronto are used by the respondent as an office and to maintain a stock of goods of its own fabrication until sold. Orders for goods are taken here and goods delivered from those in stock, or if not in stock from the factories in Quebec.
Counsel for the appellant corporation submits that one must look at what is done on the premises in question ; that the respondent is there engaged in the business of a wholesale merchant only and should be so assessed. Among other authorities he relies on the case of Loblaw Groceterias Co. v. Toronto, [1936] 3 D.L.R. 346, and particularly on the statement in that particular case that "‘the occupation or use of the particular land subjected to this special assessment must be looked at.” It is also urged that the concluding words of s. 8(1) (e) must be construed in his favour. This subsection read with the operative part of s-s.
(1) after providing for the assessment of every person occupying or using land for the purpose of carrying on the business of a manufacturer for a sum equal to 60% of the assessed value, goes on to say “and a manufacturer shall not be liable to business assessment as a wholesale merchant by reason of his carrying on the business of selling by wholesale the goods of his own manufacture on such land.’’
Appellant contends that ‘‘such land’’ is limited to the land on which the goods are fabricated, and when a manufacturer sells his goods on other lands in a wholesale way he should in respect of such other lands be assessed as occupying or using them for the purpose of carrying on the business of a wholesale merchant and not the business of a manufacturer.
On the other hand Mr. Kellock for the respondent contends that the respondent carries on in the premises the “business of a manufacturer’’ and relies on the principle of the decision in Re Studebaker Corp. & Windsor (1919), 46 O.L.R. 78 and further that the concluding words of s. 8(1) (e) above referred to are not taxing words; do not impose any extra burden, and constitute merely a saving clause which has no application here.
On consideration I am of opinion that the learned County Court Judge was right. I think the principle of the decision in the Studebaker case is in point here. In that case the Studebaker Corp., a company manufacturing automobiles, had its factories and head office in the Town of Walkerville and was a tenant of certain premises in the City of Windsor, which it used as a show-room and sales-room, for the sale of its factory products directly to the public, and where it also sold gasoline and maintained a repair station. No fabrication or manufacturing was done on these premises nor in fact in that municipality.
In the Court of Appeal it was held that the company was carrying on the business of a manufacturer and that the business in Windsor in the premises in question was a part of that business. Chief Justice Meredith says at p. 329.:
“The appellant’s business has two branches, one its manufactory proper and the other its show-room and sales-room, and both are an integral part of the business of a manufacturer carried on by the appellant. ‘ ‘
In the case of Re Hiram Walker & Sons Ltd. & Walkerville (1917) 40 O.L.R. 154, counsel for the appellant company argued that the words ‘‘business of a distiller’’ as used in the Assessment Act meant only the part of the business carried on in the distillery up to the point of rectification. After that point is reached the product of distillation is blended and warehoused and it was contended that only that part of the company’s premises used for the purpose of distillation, apart from blending and warehousing, should be considered as used in the business of a distiller, but Meredith C.J.O., delivering the judgment of the Court says at p. 759:
"‘The case was argued by Mr. Anglin as if the legislation imposed taxation in respect of a ‘distillery.' The question in such a case would be a very different one from that which arises when the taxation is in respect of ‘the business of a distiller.’ The Court cannot, I think, know judicially what such a business is, and the question of what it is must therefore be a question of fact. I do not think that there can be any reasonable doubt that, where it is shown that a distiller, in addition to distilling, warehouses the product of distillation and also blends liquors from the process of distillation and warehouses these liquors, the business of distiller as used im the clause may embrace all these branches of the business. ‘ ‘
"If there were a business assessment imposed upon persons carrying on the business of chemists or of druggists, could it be seriously argued that only the premises used in the work of compounding medicines was to be taken into account? Every one knows that a druggist does not confine his business activities to the compounding and selling of medicines, and yet all outside of that part of his business, according to the contention of the appellant, must be excluded in determining the liability to taxation or the extent of the liability. Such considerations as these. appear to me to show that the question must be one of fact in each case ; the question being what is generally understood to be comprehended in the particular business designated.”
Counsel for the appellant cites the case of Reg. v. Pearson (1894), 1 Can. C.C. 337. This is a decision of a single Judge in the Supreme Court of British Columbia. It was an appeal by the defendant from a conviction for carrying on a wholesale business without a license as required by law. The defendant carried on business as a woollen importer and manufacturer, importing materials out of which he manufactured articles of clothing, and sold such articles by wholesale and retail. It was contended that the defendant being a manufacturer he was not liable, but it was there held that the appellant sold his manufactured goods wholesale to the trade and was a wholesale merchant. This is, however, a decision on another statute of quite a different character and cannot in any way impair the authority of the Studebaker case or limit its application here.
Although in the Studebaker case the question was as to the taxation of the premises as a retail merchant, I think the same principle applies here. The tax in this case is not on a ^manufactory,” but on premises used or occupied for carrying on "‘the business of a manufacturer,’’ and I think in view of the cases effect must be given to the contention of respondent’s counsel that this includes the selling of the product as well as its fabrication.
In the words of the learned County Court Judge in the Studebaker case, ‘‘The sale of the product of a manufacturer, wherever it may be sold, is as much a part of the business of the manufacturer as is the making of the product and is clearly distinguishable from a sale by a retail merchant. The business of a retail merchant is the selling of the product of another bought by the merchant for the purpose of resale,’’ (49 D.L.R. at p. 329)
As pointed out, while the question here is different in that it is wholesale instead of retail, I think the same principle applies.
I think the Loblaw ease is distinguishable. In that case until the year 1933 the Loblaw Co. was liable for business assessment as a retail merchant for a sum equal to 25% of the assessed value of the land occupied or used for the purpose of its business. In 1933 the addition of what is now s. 8(1) (d) provided in effect for the assessment of every person carrying on the business of selling or disributing goods to a chain of more than five retail stores or shops directly or indirectly owned, controlled or operated by him ‘‘for a sum equal to 75% of the assessed value of the land occupied or used by him in such business for a distribution premises, storage or warehouse for such goods, wares and merchandise, or for an office used in connection with the said business. ’
There was a higher rate of assessment for business tax imposed upon that part of the land and buildings used in the Loblaw Co’s business for a special purpose. The question was not what business was carried on there, but to what special purpose in the business the land and buildings in question were devoted.
Here the question is whether the land and buildings are used for carrying on a business other that that of a manufacturer.
In the Loblaw case the Court was of opinion that the portion of the company’s premises in question did not come plainly within the language of the statute imposing the special tax strictly read.
To my mind the case does not assist the appellant here.
The case of Re Chatham & Canadian Leaf Tobacco Co., ante p. 101, has given me some difficulty. The Tobacco Co. engaged in the business of manufacturing and processing tobacco and having a warehouse or factory wherein the business of manufacturing was carried on, for the purpose of storage leased certain other premises in the City of Chatham, wherein they stored certain of their products at a certain rate per month per hogshead. The learned County Court. Judge found that the premises in question were being used solely for the purpose of storing goods already manufactured, and held that the company was not assessable in respect of these premises under s. 8(1) (e).
While in that case the premises in question were used ‘ solely ‘ for the purpose of storage, in the case at bar the respondent company in addition to maintaining a stock of its goods in the premises, used them as an office, and apparently keeps a staff of employees in the premises who are fully engaged in taking orders and effecting delivery. The decision on the particular facts found in that ease does not further the appellant’s contention here.
While it is not referred to in the report of the case, an examination of the stated case as filed in the Canadian Leaf Tobacco Co. case discloses that the Studebaker case was referred to and discussed by the County Court Judge and this Court apparently did not think that case applicable to the facts of the case they were then considering.
In the case at bar the County Court Judge having found that the respondent is a manufacturer and that the premises in question are used for the purposes stated ; that the goods there stored and sold are goods of their own manufacture, I think it must be held that the business being conducted in the premises in question is part of the business of a manufacturer.
The question as to what effect should be given to the concluding clauses of s-s. (1)(e) above mentioned has given me some difficulty. I think, however, that the words "‘such lands’’ must be related to the land referred to in the operative part of s-s. (1), occupied or used for the purpose of any business, and that in view of the fact that these words do not impose any extra burden upon the taxpayer they are not effective here.
Subsection (l)(e) of s. 8 was formerly s-s. (1)(d) of s. 10 of the Assessment Act, and the provision in question was considered by Magee J.A. in the Studebaker case. He says in part at p. 333:
The statute also refers to selling by wholesale upon the lands, but I do not think that weighs for the appellant, by meaning ‘upon the land where he manufactures. ‘ The provision was, I think, in case of the manufacturer, to relieve him from the higher tax because of the possibility of his being considered a merchant. ‘ ‘
Adopting these words as I do the clause in question does not assist the appellant.
For the reasons stated I am of opinion that the first question submitted to this Court must be answered in the affirmative. In view of this it is unnecessary to answer the second question.
The appeal should be dismissed with costs.
Appeal dismissed.