Commercial Litigation and Dispute Resolution Blog

A recent decision of the Ontario Superior Court of Justice shows that the outcome of important questions of statutory or contractual interpretation can sometimes turn on the meaning of the smallest and most ordinary words. As the court noted in the opening words of its judgment in Young Men’s Christian Association of Greater Toronto v. Municipal Property Assessment Corporation, 2014 ONSC 3657: “This Application turns on the statutory interpretation of the word ‘of’”.

The issue before the court was whether the YMCA was entitled to an exemption from an assessment for municipal property tax for certain property that it leased and used to carry on its operations. Section 10 of an Act to Incorporate the Toronto Young Men’s Christian Association provides an exemption from property tax as follows:

The buildings, lands, equipment and undertaking of the said association so long as and to the extent to which they are occupied by, used and carried on for the purposes of the said association are declared to be exempted from taxation except for local improvements.

The municipal tax corporation argued that the YMCA’s properties are exempt only if the property is both occupied and legally owned” by the YMCA. The YMCA argued that section 10 provided an exemption for properties either owned or leased by the YMCA.

The court held that leases were “lands” because a lease is a property interest recognized by the law of real property; however, the court held that the leases were not “land of the YMCA” as required by the statute. The court reviewed dictionary definitions of the word “of” and found that the connective uses of the word included ideas of “belonging and possession”, often functioning as a substitute for the possessive “s” (“the woman’s car” being equivalent to “the car of the woman”, in the court’s view).

The court dismissed the YMCA’s application, finding that the phrase “land of the YMCA” means “YMCA’s land” or “land owned by the YMCA”, and accordingly the YMCA’s leases did not qualify for the statutory exemption.

The lesson to be taken from the YMCA case goes beyond the law of real property or tax assessment. The outcome of statutory interpretation or contractual interpretation (to which similar principles apply) can turn on the most humble words or punctuation in the English language. In Rogers Communications Inc. v. Bell Aliant Regional Communications LP, Telecom Decision CRTC 2006-45, rev’d, Telecom Decision CRTC 2007-75, the outcome of a significant decision famously hinged on the placement of a single comma. For those drafting contractual or statutory language, or those subsequently litigating their meaning, these cases serve as a reminder of the importance that can attach to even the smallest aspects of expression.