Heald, J (per curiam):—This is an appeal by the Crown from a judgment of the Trial Division in which the learned trial judge allowed the respondents’ appeal from the reassessment for income tax for the 1973 taxation year in the estate of Umberto Mastronardi, deceased.
The respondents are the executors and trustees of that estate.
At the time of his death, the deceased was the owner of the majority common shares of Mastronardi Products Ltd (an Ontario corporation), and by virtue of subsection 70(5) of the Income Tax Act, RSC 1952, c 148 (as amended by SC 1970-71-72, c 63, section 1 and by SC 1973-74, c 14, subsection 19(1)), he was deemed to have disposed of those shares immediately prior to his death and to have received as proceeds of disposition an amount equal to their fair market value.* [1] At the time of the death of the deceased, Mastronardi Products Ltd was the owner of a term life insurance policy which provided for the payment to the company of the sum of $500,000 on the death of the deceased. This policy was dated September 25, 1972 and was for a term of five years, with the face amount reducing by $100,000 on each anniversary date. The policy was non-convertible and non-participating. The policy had no cash surrender or other value prior to death. The deceased was required by the insurance company to have two independent physical examinations which he had on August 28, 1972. The deceased died suddenly and without warning of cardiac arrest on February 20, 1973 at the age of 51 years. Neither the deceased nor his immediate family were aware prior to his death that he was a likely or suspected candidate for the heart attack brought on by arteriosclerotic cardiovascular disease and from which he died.
The parties agree that the fair market value of the shares of Mastronardi Products Ltd would be $323.58 per share, if no account was taken of the insurance policy, which is the value used by the respondents in calculating the taxable capital gain arising on the deemed disposition of the shares of Mastronardi Products Ltd. The parties also agree that, if the shares were to be valued on the basis of taking into account the policy at the instant of death, the value would be $778.59 per share which is the figure used by the Minister of National Revenue in calculating the deceased’s income for his 1973 taxation year.
In my view, the learned trial judge correctly stated the problem facing him in interpreting subsection 70(5) (supra) when he said [p 575]:
. . . it is apparent that there is a two step fiction enacted by section 70, subsection (5) of the Act.
The first fiction is that the taxpayer after he dies is deemed to have disposed of the subject property “immediately before his death”.
The second fiction is that he is deemed ‘to have received proceeds of disposition therefor equal to the fair market value of the property at that time”.
The problem is to determine what was the legislative concept of section 70, subsection (5) of the Act and apply such to the facts of this case.
After summarizing the submissions of the parties, the trial judge then reached the following conclusions [p 576]:
The words “immediately before his death” in section 70, subsection (5) of the Income Tax Act should not be construed as meaning the equivalent of the instant of death; and also those words do not import a necessity of valuing capital property taking into account the imminence of death.
And, in conclusion, he stated [p 576]:
In my view. therefore, in this case. both such valuations* [2] must be considered as having taken place at some other time rather than at the instant of death of the deceased and no premise of imminence of death of the deceased should form any part of such valuations.
We have carefully reviewed all of the authorities to which reference was made by counsel during the course of argument and can find nothing therein which has persuaded us that the learned trial judge erred either in the conclusions which he reached or the reasoning which he followed in arriving at those conclusions. To ignore the plain meaning of a statute in the context of a given set of facts and to Substitute therefor a strained and unnatural interpretation, to prevent an apprehended injustice in the future on an entirely different set of facts, as counsel for the appellant most eloquently urged us to do, does not accord with the principles of good statutory interpretation. Speculation as to the possible results in a future case assists not at all in deciding what the result should be in a case such as this which, on its facts, is so easily capable of rational resolution by simply interpreting the plain words as they appear in the statute without indulging in such speculation.
Accordingly, the appeal will be dismissed with costs.
‘70. (5) . ..
(a) the taxpayer shall be deemed to have disposed, immediately before his death, of each property owned by him at that time that was a capital property of the taxpayer (other than depreciable property of a prescribed Class) and to have received proceeds of disposition therefor equal to the fair market value of the property at that time;
(c) any person who, by virtue of the death of the taxpayer, has acquired any particular capital property of the taxpayer (other than depreciable property of a prescribed class) that is deemed by paragraph (a) to have been disposed of by him at any time shall be deemed to have acquired it immediately after that time at a cost equal to its fair market value im mediately before the death of the taxpayer;
See memoranrum of Attorney General, p 12, Appendix “A”.
‘The trial judge is here referring to the valuations required under section 70. subsection (5), paragraphs (a) and (c) of the Income Tax Act.