Supreme Court of Canada
Assessment Commissioner (Stouffville) v. Mennonite Home Association, [1973] S.C.R. 189
Date: 1972-10-18
The Assessment Commissioner of The Corporation of the Village of Stouffville (Plaintiff) Appellant;
and
The Mennonite Home Association of York County and The Corporation of the Village of Stouffville (Defendants) Respondents.
1972: March 8, 9; 1972: October 18.
Present: Judson, Ritchie, Hall, Spence and Laskin JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Taxation—Real property—Exemption—Interpretation—Ejusdem generis rule not applicable—Home for the aged—Minimal monthly rates but no means test—Whether similar to incorporated charitable institution organized for relief of the poor—The Assessment Act, R.S.O. 1960, c. 23, s. 4, para. 12.
Section 4, para. 12 of The Assessment Act, R.S.O. 1960, c. 23, now R.S.O. 1970, c. 32, s. 3, exempts from taxation “Land of an incorporated charitable institution organized for the relief of the poor, The Canadian Red Cross Society, St. John Ambulance Association, or any similar incorporated institution conducted on philanthropic principles and not for the purpose of profit or gain, that is supported, in part at least, by public funds, but only when the land is owned by the institution and occupied and used for the purposes of the institution.”
The judge of first instance and the Court of Appeal, by a majority, held that a home for the aged, owned and operated by the respondent association, fell within this exemption, because it was essentially similar to a charitable institution organized for the relief of the poor. An appeal by the assessment commissioner was brought to this Court.
Held (Judson and Laskin JJ. dissenting): The appeal should be dismissed.
Per Ritchie, Hall and Spence JJ.: The specific exemptions in s. 4, para. 12 do not comprise a single genus and, therefore, the interpretation of the general words “or any similar incorporated institution conducted on philanthropic principles and not for
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the purpose of profit or gain” must be arrived at without the aid of the ejusdem generis rule.
The respondent was an incorporated institution conducted on philanthropic principles and by the provisions of its charter it could not operate for profit or gain. It was supported in part by public funds in two ways: firstly, there was a grant from the appropriate department of the provincial government in the construction of the building and, secondly, on behalf of those occupants who could not pay even the minimal monthly rate charged by the respondent, $175 per month for a single room and $165 each for a double room, the province paid such balance as the said occupants could not pay. Finally, the land was owned by the institution and occupied for the purpose of the institution and was solely devoted to such purpose.
The institution was “similar” to an incorporated charitable institution organized for the relief of the poor in that it operated for the relief of the poor. The word “poor” was interpreted as having a relative meaning.
Per Judson J., dissenting: The home was not for the relief of the poor. There was no requirement that admission to it depended upon poverty. Such a requirement would have frustrated its effective work, which conferred a real benefit upon those who were able to take advantage of it. But that public benefit was not relief of the poor.
Moreover, this was not an institution “supported in part at least by public funds”.
Per Laskin J., dissenting: The appeal should be allowed simply on the ground that there was no proof that the institution “is supported in part at least by public funds”.
[Les Sœurs de la Visitation d’Ottawa v. Ottawa, [1952] O.R. 61; Re Clarke, [1923] 2 Ch. 407; Attorney General v. Wilkinson (1839), 1 Beav. 370, followed.]
APPEAL from a judgment of the Court of Appeal for Ontario[1], dismissing an appeal from a judgment of Weaver Co.Ct.J. Appeal dismissed, Judson and Laskin JJ. dissenting.
B. Chernos, for the appellant.
J.D. Lucas, Q.C., for the respondent, The Corporation of the Village of Stouffville.
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R.S. Mills, Q.C., for the respondent, The Mennonite Home Association of York County.
JUDSON J. (dissenting)—The issue on appeal is whether a home for the aged, owned and operated by the Mennonite Home Association, falls within the exemption from taxation contained in s. 4, para. 12, of The Assessment Act of Ontario, which reads:
4. All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:
12. Land of an incorporated charitable institution organized for the relief of the poor, The Canadian Red Cross Society, St. John Ambulance Association, or any similar incorporated institution conducted on philanthropic principles and not for the purpose of profit or gain, that is supported, in part at least, by public funds, but only when the land is owned by the institution and occupied and used for the purposes of the institution.
The County Court judge and the Court of Appeal, by a majority, held that it fell within the exemption, because it was essentially similar to a charitable institution organized for the relief of the poor.
The Mennonite Home Association of York County was incorporated by letters patent dated May 21, 1964, with these objects:
(a) To provide a home for the care and security of the aged of the Stouffville-Markham Community and surrounding district and supporting Churches;
(b) To fulfill the mission of the Church;
(c) To create service opportunities; and
(d) To become a symbol of the faith and practice of the Church,
and the letters patent provide:
And It is Hereby Ordained and Declared that the Corporation shall be carried on without the purpose of gain for its members and any profits or other accretions to the Corporation shall be used in promoting its objects.
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The Association purchased the property in question in July 1964 and built on the lands a one-storey building capable of caring for 63 persons, together with the necessary resident staff. In 1965, the Ontario Department of Welfare contributed the sum of $150,000 towards the capital cost of the building.
Since the erection of the building in 1965, the Association has maintained and operated a home primarily for the purpose of caring for the aged. It is similar to a nursing home except that it provides what was referred to as normal care and not bed care or special care.
There is no means test or inquiry as to the means of the applicants for admission to the home. There are no restrictions as to race or religion, the only requirement for admission being that they be old people who are in need of the services provided by the home.
The per diem charge per resident is based each year on the estimated cost of maintenance of the home. There is a monthly rate at present of $165 per month per resident for a double room, and $175 per month for a single room. If a resident is unable to pay the full monthly rate, the deficiency is substantially met by payments to the Association made by the Department of Welfare on behalf of the resident. In 1968, seven of the residents were unable to pay in full and the Association received $3,869 from the Department of Welfare for the maintenance of these persons.
I would reject any interpretation of subs. 12 that would confine the inquiry about similarity to the Canadian Red Cross and the St. John Ambulance Association. These are unique charities and it is difficult to imagine anything similar. The real question is whether the Home is similar to an incorporated association organized for the relief of the poor. It is clearly an incorporated association conducted on philanthropic principles and not for the purpose of profit or gain. Is it for the relief of the poor? It provides care and security for the aged but for a return which covers its cost of maintenance. Those few who
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are unable to pay this cost receive a subsidy from the Department of Welfare which is paid direct to the Home on their behalf. There is no requirement that admission to the Home depends upon poverty. Such a requirement would frustrate its effective work, which confers a real benefit upon those who are able to take advantage of it. But that public benefit is not relief of the poor.
I also agree with the reasons of Laskin J. that this is not an institution “supported in part at least by public funds”.
I would allow the appeal and declare that the Mennonite Home Association of York County is not entitled to the exemption claimed. No costs are asked for in this Court. The appellant is entitled to its costs at trial and in the Court of Appeal.
The judgment of Ritchie, Hall and Spence JJ. was delivered by
SPENCE J.—I have had the opportunity to peruse the reasons being delivered by Mr. Justice Judson. However, I must express the view that this appeal should be dismissed.
The problem, of course, is the interpretation of s. 4, para. 12 of The Assessment Act, R.S.O. 1960, c. 23, now appearing as s. 3, R.S.O. 1970, c. 32:
4. All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:
12. Land of an incorporated charitable institution organized for the relief of the poor, The Canadian Red Cross Society, St. John Ambulance Association, or any similar incorporated institution conducted on philanthropic principles and not for the purpose of profit or gain, that is supported, in part at least, by public funds, but only when the land is owned by the institution and occupied and used for the purposes of the institution.
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The basic principle of assessment in Ontario is that set out in the initial words of the section:
All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:
(the italicizing is my own) and, therefore, it must be determined whether the respondent came within the words of para. 12. It is, of course, clearly established that although the words of the statute must plainly assess the tax in order to bring the subject within the levy, the subject must, in turn, clearly establish that his case falls within the exemption in order to claim his benefits.
The judgments of Weaver Co.Ct.J. at first instance, and in the Court of Appeal were concerned with whether or not the rule of ejusdem generis should be applied in the interpretation of the said para. 12. Craies on Statute Law, 7th ed., at p. 181, states the general rule as follows:
The ejusdem generis rule is one to be applied with caution and not pushed too far,...
To invoke the application of the ejusdem generis rule there must be a distinct genus or category. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects. Where this is lacking, the rule cannot apply, but the mention of a single species does not constitute a genus.
The “specific words” in the said para. 12 are:
(i) land of an incorporated charitable institution organized for the relief of the poor;
(ii) The Canadian Red Cross Society; and
(iii) The St. John Ambulance Association.
With respect, I agree with Jessup J.A., when he said in reference to these three different objects:
In my view, the specific exemptions in s. 4(12) do not comprise a single genus from which the general words of the subsection must take their colour.
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Rather they indicate three distinct classes or kinds of institution. If it were necessary to describe the genus which is common to the several specific exemptions mentioned in subs. 12, one would be driven to such a general classification as, say the benevolent aid of mankind, that the specific exemptions would be rendered redundant.
One can see very little similarity between the Canadian Red Cross Society and the St. John Ambulance Association other than, as Jessup J.A. pointed out, the benevolent aid of mankind. Therefore, I am of the opinion that the interpretation of the words “or any similar incorporated institution conducted on philanthropic principles and not for the purpose of profit or gain” must be arrived at without the aid of the ejusdem generis rule. In my view, the important word is “similar”.
There is no doubt that the respondent was an incorporated institution conducted on philanthropic principles and by the provisions of its charter it could not operate for profit or gain. Moreover, I am of the opinion that it was supported in part at least, by public funds. In coming to that conclusion, I am interpreting “public funds” to mean funds from a government source. I adopt the interpretation made by Schroeder J. (as he then was) in Les Sœurs de la Visitation d’Ottawa v. Ottawa[2], at pp. 71-72, when he said:
On the latter point counsel for the plaintiff argues that the words “public funds” are to be given a very wide signifiance so as to include all moneys paid to the plaintiff by members of the public as voluntary donations. I cannot agree that the words are to be so broadly interpreted. These words have a well-recognized meaning in the public statutes of this Province and must be limited to money provided from the treasuries of either the federal or provincial or municipal governments.
The respondent was supported in part by public funds in two ways: firstly, there was a grant from the appropriate department of the provincial government in the aid of the construction of the
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building to the extent of $155,000 and, secondly, on behalf of those occupants who cannot pay even a minimal monthly rate charged by the respondent, $175 per month for a single room and $165 each for a double room, the Department of Welfare of the province pays such balance as the said occupants cannot pay. In the year 1968, this payment amounted to $3,869.21 up to November of that year. It must be realized that the grant for construction does result in a very considerable lessening in the cost of operation of the institution. Had it been necessary to borrow that sum of $155,000 then the cost of operation would have been increased by interest on the loan and by the establishment of some sinking fund for the repayment of the loan. It would have been utterly impossible to have provided for the reception of any occupants at such minimal rates as I have recited had it not been for such grant.
Finally, the land is owned by the institution and occupied for the purpose of the institution and is solely devoted to such purpose. Therefore, there remains for determination the question of whether the institution is “similar” to an incorporated charitable institution organized for the relief of the poor.
I am of the opinion that the institution is in fact one which does operate, whether or not it was incorporated, for the relief of the poor. I refer to the use as distinguished from the incorporation only for the reason that the charter recited the objects of the institution as follows:
(a) To provide a home for the care and security of the aged of the Stoufïville-Markham Community and surrounding district and supporting churches;
(b) To fulfill the mission of the Church;
(c) To create service opportunities; and
(d) To become a symbol of the faith and practice of the Church;
In fact, only the first of those purposes has been carried out.
I adopt the test of the word “poor” from the judgment of Romer J. in Re Clarke[3], at pp. 411
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and 412, where he cited with approval the judgment of Channell J. in Attorney-General v. Wilkinson[4]:
“That seems to lead to the conclusion that the expression ‘poor person’ in a trust for the benefit of poor persons, does not mean the very poorest, the absolutely destitute; the word ‘poor’ is more or less relative.”...
“I do not know any standard of poverty, nor how I can lay down any rule; the only thing to guide me is this: these ladies go to the institution for the sole reason that they are poor, and the institution is absolutely charitable.”
Mr. Nighswander, in answer to the question “Would I be eligible for admission if I were…?”, replied, “If you are in need of the type of care we can provide, yes sir.”
A rate of $175 per month is $2,100 per year and I am of the opinion that this Court may take judicial notice that an income of $2,100 per year is far below the poverty level under any modern welfare standard in effect in Canada. Although no means test is applied to check the person desiring to become an occupant, I agree with Jessup J.A. when he said:
Clearly its purpose in providing such necessities at bare cost is to relieve those who, if they are not poor, are in very similar circumstances. I do not think it affects such obvious and controlling purpose that it is possible, though improbable, some individuals of affluence might avail themselves of the charitable bounty of the respondent.
I, therefore, am of the opinion that this institution is similar to one incorporated for the relief of the poor in that it operates for the relief of the poor.
For these reasons, I am of the opinion that the respondent was within the exemption in para. 12 of s. 4 and that the appeal should be dismissed with costs.
LASKIN J. (dissenting)—In agreeing with my brother Judson that the exemption claimed by the respondent should be denied, I found myself simply on the ground that there is no proof that
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the institution “is supported in part at least by public funds”. The present tense of the statutory words of para. 12 of s. 4 of The Assessment Act, R.S.O. 1960, c. 23 (now para. 12 of s. 3 of R.S.O. 1970, c. 32) points, if not to continuing financial support, then at least to such support in the year or years for which the exemption is claimed.
It is the institution that must have the support and not those for whom the public purse makes up the deficiencies in the payments which are exacted from them by the institution albeit those supplements are sent directly to the institution on their behalf. I cannot regard the government grant made in 1965, to help finance the construction of the building operated by the respondent as a home for the aged, as satisfying the requirement of support by public funds in respect of the assessment made in 1967 for taxation in 1968. The suggested spill‑over of the 1965 grant in lessening the cost of operations in ensuing years through the saving of interest and of repayments of capital that would otherwise have had to be borrowed is not within the prescription of present support by public funds.
I would allow the appeal as proposed by my brother Judson.
Appeal dismissed with costs, JUDSON and LASKIN JJ. dissenting.
Solicitors for the appellant: Feigman & Chernos, Toronto.
Solicitors for the respondent, The Mennonite Home Association of York County: Mills & Mills, Toronto.
Solicitor for the respondent, The Corporation of the Village of Stouffville: J.D. Lucas, Toronto.