Supreme Court of Canada
Wilkes v. Interlake Tissue Mills Co. Ltd., [1970] S.C.R. 441
Date: 1969-12-17
Arthur A. Wilkes, Assessment Commissioner for the Corporation of the City of St. Catharines (Plaintiff) Appellant;
and
Interlake Tissue Mills Co. Limited (Defendant) Respondent.
1969: June 17, 18; 1969: December 17.
Present: Martland, Judson, Ritchie, Hall and Spence JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Taxation—Substantial reduction achieved on 1960 assessment appeal—Appeal for refund of taxes paid in 1960 on 1959 assessment on ground of gross or manifest error—The Assessment Act, R.S.O. 1960, c. 23, ss. 72 and 131.
The respondent company appealed its 1960 assessment, with the ultimate result that it achieved a very substantial reduction. It later took proceedings under s. 131(1)(f) of The Assessment Act, R.S.O. 1960, c. 23, for a refund of taxes paid in the year 1960 on the 1959 assessment on the ground that there had been a gross or manifest error. These refund proceedings went through the Court of Revision, County Court, the Municipal Board, and the Court of Appeal, and then came before this Court. The County Court judge allowed the appeal because of an over-assessment in 1959 and directed the refund to the respondent of that part of the 1960 taxes attributable to the over-assessment. The Municipal Board allowed the appeal and held that the over-assessment in question did not come within the terms of s. 131(1) (f) as being gross or manifest error. The Court of Appeal restored the judgment of the County Court judge.
Held (Judson J. dissenting): The appeal should be dismissed.
Per Martland, Ritchie, Hall and Spence JJ.: Sections 72 and 131 of The Assessment Act deal with entirely different things, the former section being concerned with an appeal from an assessment while the latter deals with an application for abatement or refund of taxes. Therefore, the efficacy of any attempt to bring into the interpretation of the words of s. 131(1) any meaning for words established in reference to their use in s. 72 was doubted.
[Page 442]
Section 131 is a remedial section which empowers a Court of Revision to do essential justice to a taxpayer who has been overcharged by reason of any “gross or manifest error”. In the present case, the overcharge, as judged by the result of the assessment appeal, was in the order of fifty per cent which, within the meaning of the section, was “gross”.
Per Judson J., dissenting: There is no connection between ss. 72 and 131 and they deal with different problems. Section 72 is the regular appeal procedure. Section 131 deals with the state of the roll and has nothing to do with the quantum of assessment validly made. When s. 131 is invoked the taxes are being levied on “the last revised assessment roll” of the previous year, (57(1) and 57(4)). At this stage, the assessor’s error in judgment, if any, of over-assessment cannot be attacked. The section is applicable to the correction of a mistake of fact in the making of the assessment or placing it on the roll.
APPEAL from a judgment of the Court of Appeal for Ontario[1], allowing an appeal from a decision of the Ontario Municipal Board. Appeal dismissed, Judson J. dissenting.
J.T. Weir, Q.C., and Merton Seymour, Q.C., for the appellant.
R.N. Robertson and S. Lederman, for the respondent.
The judgment of Martland, Ritchie, Hall and Spence JJ. was delivered by
SPENCE J.—This is an appeal from the judgment of the Court of Appeal for Ontario1 pronounced on June 10, 1968. By that judgment, the Court allowed an appeal from the decision of the Ontario Municipal Board made on April 10, 1967. The Ontario Municipal Board allowed an appeal from the judgment of Kinnear Co.Ct.J. pronounced on June 20, 1961, in which judgment Her Honour allowed the application of the respondent under the provisions of s. 131(1) of The Assessment Act, R.S.O. 1960, c. 23, for a refund of taxes paid by the applicant in the year 1960, upon an assessment made in the year 1959.
[Page 443]
The Town of Merritton, as it then was, now part of the Corporation of the City of St. Catharines, had assessed the Interlake Tissue Mills Co. Limited and other industries in the area in the same fashion from 1948 to 1960, had levied taxes upon such assessments and had collected the taxes. During that period, there had been no appeal against the assessment such as that to which I shall refer hereafter.
In the year 1960, Interlake Tissue Mills Co. Limited, hereinafter referred to as “Interlake”, in view of the terms of amalgamation between Merritton and St. Catharines, appealed the assessment made in that year upon which the 1961 taxes would be based. On February 10, 1961, Interlake filed an application to the Court of Revision of the County of Lincoln for a refund of taxes paid in the year 1960 upon the basis that there had been “a gross or manifest error” within the meaning of The Assessment Act, R.S.O. 1960, c. 23, s. 131(1) (f). The Court of Revision considered the appeal as to the 1960 assessment and made certain small reductions in the assessment. Interlake further appealed this assessment to the County Court judge in accordance with the provisions of the statute. Her Honour Judge Kinnear, by her judgment delivered on May 23, 1961, very materially reduced the assessments holding that the assessor had proceeded on wrong principles and had failed to act in accordance with the provisions of s. 35 of The Assessment Act, subs. (1) of which simply provides “subject to this section, land shall be assessed at its actual value”.
Section 131(5) of The Assessment Act provides:
131. (5) The court of revision shall hear and dispose of every application not later than the 31st day of March in the year following the year in respect of which the application is made and the clerk shall thereupon cause notice of the decision in such application to be given by mail to the persons to whom notice of the hearing of such application was given and such notice shall state thereon that such decision may be appealed to the county judge within ten days of the mailing of such notice.
[Page 444]
Subsection (6) further provides:
(6) An appeal may be had to the county judge by the applicant or the municipality from the decision of the court of revision or where the court of revision has omitted, neglected or refused to hear or dispose of an application under this section, and such appeal shall be a hearing de novo.
The Court of Revision having failed to deal in any way with the application for refund of taxes, therefore Interlake proceeded before the County Court judge in accordance with the provisions of the aforesaid subs. (6).
The learned County Court judge in detailed and very carefully considered reasons delivered on June 20, 1961, allowed the application (it was described as allowing an appeal but since the application has never been considered it might be more proper to say allowed the application) for the refund of taxes and directed that they should be refunded in the same proportion as she had previously reduced the assessment for the year 1960. It was this judgment, which was reversed by the Ontario Municipal Board and was restored by the Court of Appeal, which is the subject of the appeal to this Court. Section 131(1)(f) of The Assessment Act provides:
131. (1) An application to the court of revision for the cancellation, reduction or refund of taxes levied in the year in respect of which the application is made may be made by any person,
* * *
(f) who is overcharged by reason of any gross or manifest error;
* * *
It has been the contention of Interlake throughout that that subsection applies exactly to its situation and that under the subsection it is entitled to an order for the refund of the taxes which were paid on the basis of the 1959 taxes to the extent that they have been found in error by the decision of the learned County Court judge in granting the assessment appeal to which I have referred. The assessor, however, has contended throughout and as appellant in this Court contends that s. 131(1) (f) does not refer to a
[Page 445]
situation such as this at all but refers only to what may be called a mechanical error in either the assessment roll or the tax bill.
The appellant submits that the taxpayer’s right to make objection to an assessment is by an appeal under the provisions of s. 72 of The Assessment Act and that if the taxpayer does not proceed in accordance with that section then the roll becomes finalized as the assessment roll of the municipality and there may be no further objection thereto. Counsel for the appellant stresses the necessity that a municipality must know that a roll is finalized in order to be able to know its revenue for a current year and, in the light of this information, fix its expenditures. Section 72 of The Assessment Act commences with the words:
Any person complaining of an error or omission in regard to himself, as having been wrongly inserted in or omitted from the roll or as having been undercharged or overcharged by the assessor in the roll
and seeks to bring into the consideration of an application under s. 131 the words “error”, “omission”, “undercharged”, “overcharged”, and “in the roll” and the decisions in reference to those words when used in the section as to assessment appeals. It appears to me that the fault in such submission is that it fails to take into account the fact that ss. 72 and 131 are dealing with entirely different things. Section 72 is concerned with an appeal from an assessment. An assessment is a valuation of certain property in the municipality. Section 131 deals with an application for abatement or refund of taxes. Taxes are demands for payment made by a municipality upon a ratepayer thereof. It is true that they are based upon an assessment but they are not an assessment; they are very different from an assessment. Therefore, I doubt the efficacy of any attempt to bring into the interpretation of the words of s. 131(1) of The Assessment Act any meaning for words established in reference to their use in s. 72, some 60 sections preceding the former in the statute.
[Page 446]
With respect, I adopt the description of s. 131 of The Assessment Act made by Schroeder J.A. in his reasons in the Court of Appeal:
That is a remedial section which empowers a court of revision to do essential justice to a taxpayer who has been overcharged by reason of any “gross or manifest error”, or who has suffered a loss
* * *
Re Blackburn and City of Ottawa[2] was concerned with the question of the right of appeal on an application under the then counterpart of s. 131. Middleton J.A. at p. 500 said, after having reviewed the history of the situation:
From this history of the legislation several things emerge. The right of appeal from an assessment and the right to apply to the Court of Revision for a remission of taxes are and always have been entirely separate and distinct things.
Kinnear Co.Ct.J., in an attempt to ascertain the proper meaning and true function of s. 131(1)(f) of The Assessment Act, carried out a rather searching and astute investigation of the history of the section. That section first appeared in the Statutes of Canada 1852-53, 16 Vict., c. 182, s. 29. The relevant words of that statute were:
by reason of any gross and manifest error in the Roll as finally passed by the Court, shall have been overcharged more than twenty-five per cent…
There was no change in the relevant wording until 1904 when, by 4 Edw. VII, c. 23, s. 112, now of course of the Province of Ontario, the words were revised by the deletion therefrom, firstly, of the words “as finally passed by the Court” and secondly, of the words “more than twenty-five per cent on the sum he ought to have been charged”. So that the relevant portion of the section then read:
by reason of any gross and manifest error in the roll, has been overcharged…
[Page 447]
Those words again remained unamended for eighteen years. In 1922, by 12-13 Geo. V, c. 78, s. 26, the important amendment was made whereby the word “and” was changed to the word “or” so that then the relevant portion of the section read:
by reason of any gross or manifest error in the roll has been overcharged…
Seven years later, in 1929, by 19 Geo. V, c. 63, s. 7, the word “assessment” was added so that the relevant portion of the section read:
who by reason of any gross or manifest error in the assessment roll has been overcharged…
The final amendment was made in the year 1944 by 8 Geo. VI, c. 7, s. 15, in which the words “in the assessment roll” were deleted so that thereafter and now the section reads:
who is overcharged by reason of any gross or manifest error.
I am of the opinion that this survey of the course of amendments through the years demonstrates clearly that the legislature has intended a remedy to the taxpayer and that the scope of that remedy has been steadily broadened through the years to that provided in the present section. Firstly, the word “gross” has been limited by the provision that the overcharge had to amount to twenty-five per cent, a plain indication that the word “gross” as used there had reference to the amount of the overcharge. Secondly, in 1922, the words “gross and manifest” were amended to read “gross or manifest”. The word “or” is simply a co-ordinate that creates an alternative while the word “and” on the other hand is a conjunction and would require that the error, in order to give the remedy, must be both gross and manifest. After the amendment, I therefore agree with the learned County Court judge when she said in her reasons:
Under the present wording of the section, however, the appellant does not need to show that the error is manifest in the assessment roll, the words now being simply
[Page 448]
“who is overcharged by reason of any gross or manifest error”
* * *
and
All the appellant is required to do therefore is to show that the error was “gross”…
It needs no authority to state that a statute should be interpreted giving the words their ordinary English meaning unless, from the context, some other meaning is required. The Shorter Oxford Dictionary gives several definitions of “gross” as an adjective and the first and, I think, the most frequently used is “thick, stout, massive, big”. The Legislature was of the opinion at first that the overcharge had to be “big” to the extent of twenty-five per cent. The Legislature then altered its view and by the elimination of the words describing the percentage expressed the view that an overcharge that was not as high as twenty-five per cent might nevertheless be “gross” and entitle the taxpayer to the remedy. In the present case, the overcharge, as judged by the result of the assessment appeal, was in the order of fifty per cent which, even under the section as it existed in the prior time, would certainly have been “gross”.
For these reasons, I adopt, with respect, the view of Schroeder J.A. as expressed in his reasons in the Court of Appeal for Ontario:
In our opinion the Board has placed altogether too narrow a construction on s. 131(1)(f) and we greatly prefer the reasoning of the learned County Court Judge with which we are in substantial agreement.
I am also in substantial agreement and I would dismiss the appeal with costs.
JUDSON J. (dissenting)—In these proceedings, the respondent Interlake Tissue Mills Co. Limited is claiming a refund of taxes paid in 1960 on its 1959 assessment. Its property was then in the Town of Merritton but is now included in the City of St. Catharines. Interlake did not appeal its 1959 assessment. The assessment roll was confirmed in due course and became the basis for the 1960 taxation.
[Page 449]
When Interlake received its 1960 assessment notice it did appeal, with the ultimate result that it achieved a very substantial reduction of approximately 50 per cent. It next took proceedings on February 10, 1961, under s. 131(1)(f) of The Assessment Act for a refund of taxes paid in the year 1960 on the 1959 assessment on the ground that there had been a gross or manifest error. Section 131(1) reads:
131. (1) An application to the court of revision for the cancellation, reduction or refund of taxes levied in the year in- respect of which the application is made may be made by any person,
(a) in respect of real property liable to taxation at the rate levied under subsection 2 of section 294 of The Municipal Act that has ceased to be real property that would be liable to be taxed at such rate; or
* * *
(c) in respect of real property that has become exempt from taxation during the year or during the preceding year after the return of the assessment roll; or
(d) in respect of a building that was razed by fire, demolition or otherwise during the year or during the preceding year after the return of the assessment roll; or
(e) who is unable to pay taxes because of sickness or extreme poverty; or
(f) who is overcharged by reason of any gross or manifest error; or
(g) liable for business tax who has not carried on business for the whole year, except where the business was intended to be or was capable of being carried on during a part of the year only, or was not carried on for a period of less than three months during the year by reason of repairs to or renovations of the premises in which the business was carried on.
These refund proceedings went through the Court of Revision, County Court, the Municipal Board, and the Court of Appeal, and are now before us. The County Court judge allowed the appeal because of an over-assessment in 1959 and directed the refund to Interlake of that part of the 1960 taxes attributable to the over-assessment. The Municipal Board allowed the appeal and held that the over-assessment in question here did not come within the terms of
[Page 450]
s. 131(1)(f) as being gross or manifest error. The Court of Appeal[3] restored the judgment of the County Court judge.
The appeal provisions in The Assessment Act against the assessment are clear and unambiguous. Within the time limits fixed by the Act, an appeal from an assessment may be taken to a Court of Revision, a County Court, the Ontario Municipal Board and, finally, to the Court of Appeal. Section 72(1) gives one of the grounds of appeal as “undercharged or overcharged.” This is the language used when the person assessed appeals. There is a similar appeal given to any person who thinks that someone else has been “assessed too low or too high.” There is no difference, in my opinion, between “undercharged or overcharged” and “assessed too low or too high.” The appeal under s. 72 is, therefore, in the widest terms. It deals with what I have just mentioned and error or omission. In my opinion, when this is the complaint, this procedure must be followed and when the roll is certified by the Court of Revision, it is for all purposes the last revised assessment roll of the municipality (s. 57(1)) subject to the preservation of the rights of appeal under the Act (s. 57(6)).
The taxpayer in this case failed to take advantage of these rights of appeal against the 1959 assessment. But, having secured a substantial reduction by way of appeal of the 1960 assessment, it then sought to take advantage of s. 131(1)(f) on the ground that it had been overcharged by reason of “gross or manifest error.”
Many cases, notably Town of MacLeod v. Campbell[4], Shannon Realties Ltd. v. Ville de St. Michel[5], and North West Lumber Co. Ltd. v. Municipal District of Lockerbie No. 580[6], lay down the firm principle that in the case of overvaluation by the assessor, appeal by the taxpayer must be made according to the procedure and subject to the limitations laid down in the gov-
[Page 451]
erning statute. In any given case, the procedure and limitations have always been almost identical to the requirements laid down by s. 72 of The Assessment Act. To allow in the case under appeal utilization of s. 131 of that Act in an appeal against a subjective error, would be to ignore what has been long accepted law.
Section 131 deals with specific situations such as property that has become exempt from taxation during the course of the year, buildings razed by fire and persons who are unable to pay taxes because of sickness or extreme poverty. It goes on to make specific provision for the person “who is overcharged by reason of any gross or manifest error.”
Section 131, having regard to its place in the scheme of the Act, does not apply to situations where the issue concerns details of the principle of valuation applied by the assessor, nor situations where the question is undervalue or overvalue. Rather, it applies to clerical errors, the transposition of figures, typographical errors and this type of mistake.
The “gross error” relied on by Interlake in the present circumstances is the reliance of the assessor upon a manual prepared for use in Lincoln County (which he used to assess all industrial properties) rather than upon a manual prepared and recommended by the Ontario Department of Municipal Affairs, incorporating as it does specific reference to the criteria set up by The Assessment Act, s. 35.
The essence of the complaint made by the taxpayer on the “refund appeal” is a complaint of having been “overcharged by the assessor” (the very words used in s. 72(1)). The property owner must make this complaint within the time prescribed for appeal to the Court of Revision, and further appeals, if advised, within the other time limits. The taxpayer is not given the privilege of ignoring the time prescribed for appeal to the Court of Revision and then coming back to that Court through s. 131.
If the reasoning of the Court of Appeal is correct, every taxpayer who can establish a substantial difference between his valuation and the valuation of the assessor, can ignore the ordinary procedure and stand by while the roll is
[Page 452]
certified by the Court of Revision, the tax levy made on the basis of that roll, and then, early in the next year, prior to February 28, bring forward his complaint.
Such a result is at variance with the whole scheme of the Act, which is that the municipality, at the beginning of the tax year, has a certified roll on which it can rely in making this levy. Section 131 does not duplicate, in whole or in part, the appeal provisions of s. 72. There is no connection between the two sections and they deal with different problems. The first is the regular appeal procedure (s. 72). The second (s. 131) deals with the state of the roll and has nothing to do with the quantum of assessment validly made. When s. 131 is invoked the taxes are being levied on “the last revised assessment roll” of the previous year, (57(1) and 57(4)). At this stage, the assessor’s error in judgment, if any, of over-assessment cannot be attacked. The section is applicable to the correction of a mistake of fact in the making of the assessment or placing it on the roll. This was the ratio of the Municipal Board. This ratio is also in accordance with the reasons of Riddell J.A. in Re Bayack[7], where the error complained of was a change in tenancy and religious affiliation between the making of the assessment and the final revision of the roll. We have not been referred to any case where the section has been applied on a complaint of over-assessment. I wish to adopt the reasons of the Board in the following paragraph:
There must of necessity be some finality and a time when it can be said that the assessed value of the property for that year has been determined except in those special and unique circumstances where there was a gross or manifest error of fact in the making of the assessment or placing same on the roll. This not only applies to when a person is requesting special relief from over-charging but also on an application by the municipality under s. 132(1) when any person is undercharged by reason of any gross or manifest error. It is the opinion of the
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Board that this special curative relief is for the purposes of correcting a mistake of fact and not when an error of judgment in making the assessment is involved.
I would allow the appeal with costs throughout, set aside the judgment of the Court of Appeal and restore the order of the Municipal Board.
Appeal dismissed with costs, Judson J. dissenting.
Solicitors for the appellant: Seymour, Lampard, Nicholls & Greenspan, St. Catharines.
Solicitors for the respondent: Fasken & Calvin, Toronto.