ROBERTSON C.J.0.:—This is an assessment appeal by : way of stated case under s. 85 of the Assessment Act, R.S.O. 1937, c. 272, from the decision of Judge Macdonell, of the County Court of the County of York.
A property on the north-west corner of York and Front Streets, in Toronto, was vested in the appellant. On January 29, 1943, appellant entered into an agreement for the sale of this land to the Crown, the date for completion of the sale being fixed as April 30, 1943, the appellant and its tenants in the meantime remaining in possession. The assessor completed his assessment roll for this section of the city, and returned it to the City Clerk on April 22nd. This is the roll upon which the tax rate for the year 1944 will be based. The appellant is assessed as owner. No information had been conveyed to the assessor, or to the Assessment Commissioner, with respect to the agreement for sale of the property to the Crown, until the receipt of a letter by the Assessment Commissioner, on April 22, the day that the assessor returned his roll. This letter informed the Assessment Commissioner of the agreement for sale, and that conveyance was to be made on April 30th.
The appellant asks that its name should be removed from the roll as the owner, or, in the alternative, that it should be noted on the roll that it is trustee for the Crown. The contention of the appellant is that immediately on the making of the agreement for sale, the appellant ceased to be the beneficial owner of the property, and that ownership in equity became vested in the Crown, the appellant having merely the right to the purchase-money. The appellant is apprehensive that, when the rate by-law comes to be passed for levying taxes in 1944, it will be held liable for the taxes upon these lands, as the assessed owner.
In our opinion, the appellant properly appeared upon the assessment roll as the owner on April 22, 1943, when the roll was returned. The assessor had found appellant in occupation either itself or by its tenants. We are also of the opinion that the sale having now been completed and the lands vested in the Crown, no taxes can validly be levied upon them in 1944. Not only is the interest of the Crown in any property expressly excepted from the real property in Ontario liable to taxation, by the Assessment Act itself (R.S.O. 1937, c. 272, s. 4(1)), but by s. 125 of the B.N.A. Act no lands or property belonging to Canada or any Province shall be liable to taxation.
We do not think that it is required by the Assessment Act that assessors should inform themselves, in the preparation of their rolls, of all the equities that may exist in respect of lands that they are to assess. Many difficult questions arise in respect of such matters, and the assessor has no means of ascertaining the facts, nor can it be assumed that he would be equipped with the necessary knowledge of the law to apply it to the facts, if he knew them. The Assessment Act does not contemplate the assessment of equitable interests, such as that in question here in any event while the legal estate remains vested in the person in possession or occupation as owner.
In the ordinary ease of a sale to a private purchaser, no difficulty is created by assessing the vendor who has not conveyed. Section 99 of the Assessment Act makes the subsequent owner liable to the municipality, and the vendor himself is protected by his agreement, according to its terms. On the other hand, if the purchaser in such a case was assessed and the vendor’s name was omitted from the assessment roll, an undesirable situation would exist if the agreement for sale were not carried out, as happens not infrequently.
Reported decisions in cases that arose under the Consolidated Assessment Act of Upper Canada (ce. 55 of Consolidated Statutes of Upper Canada, 1859), are to be applied now, only with due regard to changes in the assessment law. Under s. 10 of the older statute, in cities, towns and villages the rates were calculated at so much in the dollar upon the yearly value of the property liable to assessment, and not upon the actual value of the land itself. The assessor in a city, town or village was required, by the old statute, to show on his assessment roll, the rental of each separate parcel of real property, and when the rental was not assessed, the yearly value of each separate parcel (s. 19(4)).
It is further to be observed that in cases such as Shaw v. Shaw (1862), 12 U.C.C.P. 456, and Secretary of State for War v. Toronto (1863), 22 U.C.Q.B. 551, cases which still are cited, the Crown had only a leasehold interest, and that interest only was exempt. In the present case the Crown is now the sole owner, and the lands are, therefore, wholly exempt from taxation.
In our opinion, the County Judge was right in deciding as he did. The respondent is entitled to its costs of the appeal.
GILLANDERS J.A.:—I agree.
KELLOCK J.A.:—The facts sufficiently appear in the judgment of my Lord, and I shall not repeat them.
The appellant contends that the roll should have been amend- ed by the assessor, and should now be amended by entering thereon the fact that the appellant is a trustee for the Crown, and the appellant refers to s. 36(11) of the Assessment Act, R.S.O. 1937, c. 272. It is, therefore, important to ascertain if, and to what extent, the word ^trustee” as used in the section aptly described the appellant on April 22, 1943, insofar as its relation to the Crown by virtue of the contract of sale then subsisting is concerned. On that date, while the appellant had agreed to sell the lands to the Crown, the contract had not been completed, and the appellant was still in possession and in receipt of the rents and profits for its own benefit.
The argument on behalf of the appellant is that the relationship of vendor and purchaser under an agreement of sale of which specific performance will be ordered by the Court, is that of trustee and cestui que trust, and that such was the relationship between the appellant and the Crown on the date in question. Holroyd v. Marshall, 10 H.L.C. 191, 11 E.R. 999; Shaw v. Foster (1872), L.R. 5 H.L. 321, and Lysaght V. Edwards (1876), 2 Ch. D. 499, are cited in support. The principle established by these cases is to be taken subject to what is said by Lord Parker of Waddington in Howard v. Miller,'22 D.L.R. 75 at pp. 79-80, [1915] A.C. 318 at p. 326, 20 B.C.R. 227:
" " It is sometimes said that under a contract for the sale of an interest in land the vendor becomes a trustee for the purchaser of the interest contracted to be sold subject to a lien for the purchase money; but however useful such a statement may be as illustrating a general principle of equity, it is only true if and so far as a court of equity would under all the circumstances of the case grant specific performance of the contract.
" " The interest conferred by the agreement in question was an interest commensurate with the relief which equity would give by way of specific performance, and if the plaintiff, Miller, had in his application attempted to define the nature of his interest, he could only so define it. Further, if the registrar had, as in their Lordships’ opinion he ought to have done, specified on the register the nature of the interest which he registered as a charge, he could only have so specified it. Had he attempted further to define the interest, had he, for example, stated it as an equitable fee subject to the payment of the purchase money, he would have . . . . to decide how far the contract ought to be specifically performed.”
Could the assessor in the case at bar, any more than the Registrar in the case with which Lord Parker was dealing, have decided the question as to whether or not the contract between the apellant and the Crown should be specifically per formed? In my opinion, for the assessor so to do would be to usurp the function of the Court, as in the opinion of Lord Parker the Registrar would have been usurping that function in the case put in the judgment referred to. I do not think that the assessor, the Court of Revision, the County Judge, or this Court, could determine such a question, and, certainly, it could not be determined in the absence of one of the parties to the contract, namely, the purchaser.
In my opinion, the reason which prompted the decision in Re Colling (1886), 32 Ch. D. 333, under the legislation there in question, applies with equal force under the legislation in question here, the reason being that in the case of any contract for the purchase and sale of property ‘‘there might always be. a question whether the contract could be enforced by a suit for specific performance; and it would be extremely inconvenient to declare the vendor to be a trustee upon a petition on which that point could not be decided.’’ The point cannot be decided because one of the parties to the contract is absent.
In Central Trust c Safe Deposit Co. v. Snider, 25 D.L.R. 410 at p. 414, [1916] 1 A.C. 266 at p. 272, 35 O.L.R. 246, (a case originating in Ontario) the following passage occurs in the judgment of Lord Parker:
"‘It is often said that after a contract for the sale of land the vendor is a trustee for the purchaser . . . But it must not be forgotten that in each case it is tacitly assumed that the contract would, in a Court of equity, be enforced specifically.
"‘If for some reason equity would not enforce specific performance, or if the right to specific performance has been lost by the subsequent conduct of the party in whose favour specific performance might originally have been granted, the vendor . . . . either never was, or has ceased to be, a trustee in any sense at all. Their Lordships had to consider this point in the case of Howard v. Miller, 22 D.L.R. 75, [1915] A.C. 318, in connection with the law as to the registration of titles in the Province of British Columbia, and came to the conclusion that though the purchaser of real estate might, before conveyance, have an equitable interest capable of registration, such interest was in every case commensurate only with what would be decreed to him by a Court of equity in specifically performing the contract, and could only be defined by reference to the relief which the Court would give by way of specific performance.”
There are other expressions in the cases which might be mentioned. Ridout v. Fowler, [1904] 1 Ch. 658; [1904] 2 Ch. 93, is a case in which the purchaser under an agreement of sale had gone into possession but had subsequently in an action brought against him for specific performance consented to a decree rescinding the contract. Farwell J., in the course of his judgment in [1904] 1 Ch. at p. 662, said: "Now here it is quite clear that the relationship of trustee and cestui que trust never was created by the completion of the contract, and therefore there never was any estate in land in the events that have happened on which this order by way of equitable execution could have operated.” •
He was speaking of an order obtained by an execution creditor of the purchaser prior to the rescission of the contract, under which order the creditor had been appointed receiver to receive the rents, profits, and moneys receivable by the purchaser in respect of his interest in the premises subject to the agreement for sale.
The learned Judge proceeds: "‘That disposes of the question of any charge upon the real estate, because by reason of the events that have happened, and which the plaintiff in the present action could not interfere with or prevent, no actual estate in the land ever belonged to the debtor (that is, the purchaser) at all.”
In Robinson v. Moffatt (1916), 31 D.L.R. 490, 37 O.L.R. 52, Meredith C.J.C.P. says, at p. 492 D.L.R., p. 55 O.L.R.: “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 at law except a personal action against the vendor if he should refuse or be unable to carry out his contract.”
This statement of the law was expressly approved by Hodgins J.A., reading the judgment of the Court in Kimniak v. Anderson, [1929] 2 D.L.R. 904 at p. 906, 63 O.L.R. 428 at p. 432. The learned Judge reviews many of the authorities to which I have already referred, and holds that the interest of a purchaser under an agreement for sale is not such an interest as comes within the rather wide terms of s. 34 of the Execution Act, R.S.O. 1927, c. 112, now R.S.O. 1937, c. 125. At p. 910 D.L.R., p. 436 O.L.R. of the judgment, the following occurs: "‘In view of the fact that the interest of a purchaser under a contract for the purchase of real estate is expressly subject to what a Court of Equity thinks and decrees that it ought to be, the nature and extent of which cannot be predicated, and that it is also always liable before the Court is seized of it to be lost or to vanish in cases of default, I am of opinion that the interest of such a purchaser is not properly salable under a writ of fiert facias, but can only be reached, if it can be reached at all, by way of equitable execution where the Court can protect all parties and exercise or anticipate the rights which would flow from a contract if recognized in Equity as not merely one capable of specific performance but in fact entitled to be so enforced.”
In Rayner v. Preston (1881), 18 Ch. D. 1, James L.J. at p. 13, says: "‘I agree that it is not accurate to call the relation between the vendor and purchaser of an estate under a contract while the contract is in fieri the relation of trustee and cestui que trust. But that is because it is uncertain whether the contract will or will not be performed, and the character in which the parties stand to one another remains in suspense as long as the contract is in fieri. But when the contract is performed by actual conveyance, or performed in everything but the mere formal act of sealing the engrossed deeds, then that completion relates back to the contract, and it is thereby ascertained that the relation was throughout that of trustee and cestui que trust. That is to say, it is ascertained that while the legal estate was in the vendor, the beneficial or equitable interest was wholly in the purchaser. And that, in my opinion, is the correct definition of a trust estate. Wherever that state of things occurs, whether by act of the parties or by act or operation of law, whether it is ascertained from the first or after a period of suspense and uncertainty, then there is a complete and perfect trust, the legal owner is and has been a trustee, and the beneficial owner is and has been a cestui que trusts
I refer also to The King v. Caledonian Ins. Co., [1924], 2 D.L.R. 649 at p. 655, S.C.R. 207 at p. 213, and to the judgment of Cozens-Hardy J., as he then was, in Cornwall v. Henson, [1899] 2 Ch. 710 at p. 714. The judgment was reversed in [1900] 2 Ch. 298, on another ground. I also refer to Dart on Vendors and Purchasers, 8th ed., p. 266.
These authorities, in my opinion, establish that the appellant in the circumstances here present was not entitled to be entered on the roll on April 22, 1948, as trustee for the Crown. If in any case the purchaser in the position of the Crown in the case at bar were to be entered on the roll as soon as the agreement for sale was entered into, and for any reason the sale were not completed, perhaps owing to want of title, or some default on the part of the vendor, the purchaser would then find himself liable for the taxes on the property by reason of s. 99. Further, if the vendor were left off the roll the municipality might be unable to recover the taxes from him, as he would not be a "‘subsequent’’ owner as required by s. 99. I do not think either of these results is intended by the Assessment Act.
In the present case, the fact that the sale was completed subsequent to April 22, does not affect the point arising here for decision. R& Williams and Regimbal, [1935], 2 D.L.R. 283, O.R. 199.
I think there is another reason why a person in the position of the appellant is not such a trustee as is envisaged by s. 36 (11). A trustee, such as is contemplated by the subsection, when assessed as trustee, would be obliged to retain sufficient assets of the trust estate in his hands to satisfy the taxes to be levied upon the roll upon which his name appears. In the case of a vendor under an agreement for sale however, the vendor would have no such right, as he would be obliged to convey the legal estate to the purchaser in accordance with the terms of the contract of sale, and would have no right to retain anything in his hands to satisfy the taxes. In my opinion, this clearly differentiates the position of the appellant under the sale agreement in question from that of a trustee contemplated by the subsection.
The assessment roll here in question is the roll on which taxes for the year 1944 will be levied. In my opinion, although the name of the appellant will appear on that roll at the time when the rate is struck in 1944, the appellant will not be liable for any taxes in respect of the lands in question as it apparently fears. The sale having now been completed, and the property vested in the Crown, it is exempt from taxation by virtue of s. 125 of the B.N.A. Act, and if anything more be required, by virtue of s. 4(1) of the Assessment Act itself. While s. 315(1) of the Municipal Act, R.S.O. 1937, c. 266, authorized a council to levy on the ‘‘whole rateable property according to the last revised assessment roll’’, "" rateable” in this section means "‘rate- able by law.’’ Ottawa v. Wilson, [1933], 1 D.L.R. 273, at p. 278, O.R. 21, at p. 27. No taxes are leviable by law upon these lands, now the property of the Crown, regardless of the fact that they appear upon the assessment roll.
I agree, therefore, that the appeal should be dismissed with costs.
Appeal dismissed.