Seven Mile Dam Contractors v. The Queen in Right of British Columbia (1980), 116 DLR (3d) 398, 1980 CanLII 451 (BCCA)

A partnership ("P1") sold equipment to another partnership ("P2"). The two partners of P1 had partnership interests totalling 50% in P2. Before finding that BC social services tax was payable on only one-half of the total price paid by P2 for the equipment, Hutcheon J.A. relied on the finding in Boyd v. Attorney General of British Columbia (1917), 54 SCR 532, at 559-60 that the partners have an undivided interest in the specific assets of a partnership.

A partnership ("P1") sold equipment to another partnership ("P2"). The two partners of P1 had partnership interests totalling 50% in P2. Before finding that BC social services tax was payable on only one-half of the total price paid by P2 for the equipment, Hutcheon J.A. relied on the finding in Boyd v. Attorney General of British Columbia (1917), 54 SCR 532, at 559-60 that the partners have an undivided interest in the specific assets of a partnership.

A definition in the Interpretation Act (B.C.) of a person as including a partnership did not displace the general law of partnership that each partner has a property interest in the assets of the partnership.

On a sale of equipment by one partnership ("Seven Mile") to another ("Kootenay Power") in which the two partners of Seven Mile had a 40% and 10% partnership interest, tax was imposed under the Social Service Tax Act (B.C.) on the price of "property purchased" on the basis that only a 1/2 interest in the equipment had been transferred. Hutcheon J.A. adopted a statement in Lindley on the Law of Partnerships that the share of a partner "is regarded as a proportionate interest in the specific items of property which together constitute the partnership property."

Before going on to find that the definition in the Interpretation Act (BC) of a "person" as including partnership did not override the common law of partnerships that the partners of a partnership had an interest in the partnership property, Hutcheon J.A. stated (at p. 401) that "there is a rule of construction of statutes that new principles are not to be introduced into any branch of the law except by clear language."

In applying the "rule of construction of statutes that new principles are not to be introduced into any branch of the law except by clear language," Hutcheon J.A. found that a definition in the Interpretation Act (B.C.) of a person as including a partnership did not displace or abrogate the general law of partnerships.