Supreme Court of Canada
City of Windsor v. Turner, [1925] S.C.R. 413
Date: 1925-03-27
The City of Windsor and Another (Plaintiff) Appellant;
and
Catherine C. Turner and Others (Defendants) Respondents.
1925: March 5, 27.
Present: Anglin C.J.C. and Idington, Duff, Mignault, Newcombe and Rinfret JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ONTARIO.
Municipal corporation—Part of township annexed to city—School section—Moneys on hand at annexation—Public School Act [1920] c. 100, s. 27 (1).
Sec. 27 (1) of the Public School Act, 1920, provides that “where part of a township * * * is annexed to * * * an urban municipality such part shall for all school purposes be deemed to be part of the urban municipality.”
In Dec. 1921, the Ontario Ry. and Mun. Board made an order directing that a part of the township of Sandwich W., comprising the whole of school section No. 11, should be annexed to the city of Windsor. The order was to take effect on Jan. 1, 1922, but by arrangement the former trustees continued to manage the affairs of the school section until April 1. At the end of 1921 the school section had a balance on hand and received in March, 1922, $4,000 from the township council on account of taxes for 1921, and in February, 1922, $200 the statutory contribution to teachers’ salaries for 1921.
Held that as the school section became for all school purposes part of the urban municipality on January 1, 1922, and as the money in question was proceeds of or chargeable against the rates of 1921, the urban Board of Education was entitled to recover, the annexation operating to transfer the school to the city as a going concern.
APPEAL from a decision of the Appellate Division of the Supreme Court of Ontario reversing the judgment at the trial in favour of the appellant.
The material facts are stated in the above head-note. A portion of Sandwich West comprising school section No. 11 having been annexed to the city of Windsor from Jan. 1, 1922, the trial judge held that the surplus moneys on hand representing the collection of taxes for 1921 should be paid to the City Board of Education. His judgment was reversed by the Appellate Division which ordered that moneys paid or advanced by the township council should be returned and the balance distributed among the 1921 ratepayers. The city appeals from the latter judgment.
F.D. Davis K.C. for the appellant.
John Sale for the respondent.
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The judgment of the majority of the court (the Chief Justice and Duff, Mignault, Newcombe and Rinfret JJ.) was delivered by
NEWCOMBE J.—The municipal corporation of the city of Windsor brought this action by writ of summons issued out of the Supreme Court of Ontario against the defendant Catherine C. Turner, the secretary-treasurer of school section no. 11, which formerly belonged to the township of Sandwich West, to recover the sum of $5,535.28, alleged to be money of the school section in her hands to which the plaintiff was entitled. There were no pleadings, but a consent order was made by the local judge in chambers directing the joinder of parties and the trial of an issue. The Board of Education of the city of Windsor was added as a plaintiff, and Parker Dickinson and the treasurer of the township of Sandwich West were added as defendants, Dickinson as representing the ratepayers of the school section. By this order it was directed that
the question to be tried shall be which of the said parties is entitled to the said moneys in the hands of the defendant Turner, being taxes collected from the ratepayers of the said public school section no. 11 and in the hands of the defendant Turner as hereinbefore stated.
The issue as stated by the plaintiffs in pursuance of the order, and which was tried, is expressed as follows:
The plaintiffs affirm and the defendants deny that the plaintiffs are entitled to the sum of $5,535.28 in the hands of the defendant Catherine C. Turner at the date of the issue of the writ in this action being moneys in her hands for school purposes of section number 11, formerly in the township of Sandwich West but now within the city of Windsor.
School section no. 11, in the township of Sandwich West, was contiguous to the city of Windsor. The Ontario Railway and Municipal Board, under section 21 of the Consolidated Municipal Act, 1922, c. 72, by order of 29th December, 1921, directed that a parcel or tract of land in the township containing 48.9 acres more or less, and being composed of part of farm lot 68 in the 1st concession of the township, which was more particularly described in the order, should be annexed to and should thereafter form part of the municipality of the city of Windsor. The area so described and annexed comprises the whole of the school section which therefore, on and after 1st January, 1922, when by the order it was declared that the annexation should take effect, became subject to section 27, subsection
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1, of the Public School Act, 1920, c. 100, which provides that:
27. (1) Where part of a township becomes incorporated as or is annexed to and becomes part of an urban municipality such part shall for all school purposes be deemed to be part of the urban municipality, provided that when the part incorporated or annexed comprises or includes part only of a school section the municipalities interested, unless determined by agreement after the incorporation or annexation, shall each appoint an arbitrator who, with the judge of the county or district court, shall value and adjust in an equitable manner the rights and claims of all parties thereby affected, and shall determine by which municipality or part thereof the same shall be paid or settled.
The order of annexation according to its recitals was made upon reading the petition of a majority in number of the ratepayers resident in the portion of the township sought to be annexed and the resolution of the council of the city in favour of the annexation. By the order it is provided that the assessment of the lands annexed shall, for a period of five years, remain the same as that for 1921, also that the net cost of a lot purchased by the township for the extension of Wyandotte street is to be taken into account in the adjustment of assets and liabilities, and moreover that the question of rearrangement of the amount payable by the township under the Consolidated Essex Borders Utilities Act is a matter to be settled upon the consideration and adjustment of the accounts between the township and the city. These are the only terms or conditions fixed by the order as to the adjustment of assets and liabilities, taxation, assessment, improvements, or otherwise. The treasurer of the township states that there was an informal arrangement between him and the city that the latter would refund the amount of the debentures for local improvements payable by the township during the ensuing seventeen years. There was no other adjustment of assets and liabilities under the provisions of s. 38 of the Municipal Act or otherwise. In a case of this kind, where the municipal records and accounts are or should be available, there should be no room for dispute about the facts, nor is there any reason why a case should be presented in the unsatisfactory and confusing manner in which unfortunately this controversy is submitted. It is possible, however, to reach a conclusion. It would appear that the affairs of the school section were in a prosperous condition; at the end of 1921 it had in hand a balance of $3,235.89; although
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the school section for all school purposes became part of the urban municipality on 1st January, 1922, its former trustees nevertheless continued to manage its affairs until 1st April following; there is a letter in evidence of 25th March, 1922, from the secretary-treasurer of the Board of Education of the city to the defendant Mrs. Turner, stating that it had been decided that the board would take over the school on 1st April, and that the trustees of the school section were to pay all expenses including salaries, up to that date; and so it happened that the secretary treasurer, the respondent Turner, in the interval received the revenues which were paid for the benefit of the school section. These comprised, according to the proof, $200 received on requisition from the township on 25th February, 1922; $4,000 received on requisition from the township on 11th March, 1922, and $10 received from the county for the use of a polling booth on 8th March, 1922, amounting in all, including the balance on hand at the end of 1921, to $7,445.89. As against this are set off the expenses of conducting the school from 1st January to 1st April, 1922, $1,910.61; leaving a balance in hand, which is the amount in controversy, of $5,535.28. The amount of $200 received from the township on 25th February is thought to be the contribution of the council of the township under s. 96 of the Public Schools Act, 1920, for teachers’ salary, and the $4,000, received on 11th March, is a payment or advance made by the township to the school section of or against taxes collected or to be collected for the year 1921 for the maintenance of the school. It is said that the taxes for any year were usually not collected until the beginning of the following year, and it would appear that counsel agreed, at least at an early stage of the trial, that the latter sum represented taxes for the year 1921; evidence was however subsequently given upon the subject which tends to establish the fact.
It is shewn that taxes were collected in 1922, and it would seem to be true that the moneys used by the trustees for the upkeep of the school in 1921 were the proceeds of the rates assessed in the preceding year, and that the rates assessed in 1921 would constitute the fund out of which the expenses of the school for 1922 should be paid. Mrs. Turner says in her evidence:
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Q. These sums of money that you had in hand, were they part of the moneys received from the township of Sandwich West, or the treasurer of Sandwich West during 1921?
A. There was a balance of three thousand and some odd left over after running the school at the end of 1921.
Q. As shown by that statement?
A. Yes.
Q. From the moneys received in 1921?
A. Yes.
There is a requisition in the evidence dated 17th October, 1921, directed to the clerk of the township by the trustees of the school section, by which the trustees ask for a grant of $4,000 from the township for 1922, and stating that the treasurer is authorized to pay the money to the secretary of the Board of Trustees. It was in pursuance of this requisition that the $4,000 was paid on 11th March, 1922, and at the foot of the statement evidencing this payment, which is one of the plaintiffs’ exhibits in the case, there is a note to the effect that at a regular meeting of the trustees held on 17th October, 1921, the trustees signed a letter asking for this grant for 1922. I think it is not an unjust inference that the money was paid by the township authorities for the school purposes of the trustees of the school section out of the proceeds of the rates of 1921, and that the intention of the trustees in making the requisition was to provide in ordinary course, at the beginning of 1922, for the charges which would come in course of payment during that year out of the appropriations provided for and raised in pursuance of the outstanding annual levy. This view is also in accordance with the finding of the learned judge at the trial because, although his findings are not very explicit, he states that if the moneys in court were paid back to them (meaning the ratepayers who contributed the school taxes for 1921), they would virtually escape taxation for school purposes for 1921. The learned judges of the Court of Appeal were of a different opinion and they decided that the sum of $4,200 should be repaid to the treasurer of the township, and that the balance should be distributed among the ratepayers of the school section which had been annexed; but, with great respect, I do not think that this view of the case can be maintained. The money in dispute was provided for and exigible for school purposes during 1921, while the section belonged to the township, and, in view of the annexation, the right to the money cannot I think
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be affected by the fact that it was actually paid later than it should have been. Even if the law granted the delay for payment which took place, there can I think be no doubt that the levy and the taxes paid were for 1921. The township clerk gives the following evidence:
Mr. Sale: What time of the year do you collect your taxes?
Answer: In the fall of the year, never finish up until springtime.
His Lordship: That is the way all municipalities do, isn’t it?
Mr. Sale: They do not usually send them over until the next year.
His Lordship: I do not know how it is down here, but they all extend the time for payment up till about the first of May.
Mr. Sale: You collected at the end of the year?
Answer: The roll is out at the end of the year.
His Lordship: But the actual collection is not made.
Answer: Is not made until spring. They have to finish up before the first of May as a rule.
His Lordship: The roll is made out in December, but collections are not generally completed until—
Witness: April or May. Sometimes the first of May.
His Lordship: Until some time afterwards, anyway.
Mr. Sale: The first of March I think it calls for.
His Lordship: The levy is the levy for 1921?
Answer: Yes, my lord.
Question: You made the levy for that year?
Answer: 1921, yes, my lord.
Question: As a matter of curiosity, do you finance your township so that you levy enough at the end of that year to pay everything in the next year, or do you borrow against the levy?
Answer: The levy is made like 1921. The requisition—
Question: Never mind the school; do you have your money in advance, or do you borrow against the levy and pay the bank back?
Answer: We borrow when we have not got any money.
Question: Do you expect to have enough on hand at the first of the year to finance the year?
Answer: To finance the year.
Question: So the tax levied in 1921 is really for the estimated expenditure of 1922?
Answer: 1921.
Question: The same year?
Answer: The same year.
Question: But you are levying at the end of the year. Where do you get the money in the meantime?
Answer: Borrow it.
Question: You borrow against the levy?
Answer: Against the levy unless the township instructs money ahead.
And in another place the same witness affirms that
the school taxes which were paid to Mrs. Turner were school taxes that had been levied for the year 1921.
Nowhere does it appear that the township borrowed the money, or any part of it, to make up the $4,200, and, if it did, there should have been no difficulty to prove the fact;
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moreover, if the money were borrowed, the only consequence would be that there would be an outstanding liability of the township to the amount of the borrowed money to be provided for. If the management of the school had been taken over when the district was annexed, and if the money in question had at that time been in the hands of the authorities of the school section to which it was appropriated, and for which it was levied, it would naturally pass upon the annexation to the Board of Education of the city, which became the trustee or administrator of the affairs of the school, and the destination of the money would not, I should think, be affected by the fact that the money was actually paid somewhat later; neither would it be material that the trustees of the rural school district actually carried on the school and paid its liabilities, out of moneys appropriated for the purpose, for several months after it was annexed to the city. I think that in the absence of any competent adjustment affecting the assets and liabilities the urban Board of Education becomes entitled by the declaration of s. 27 of the Public Schools Act, that the district annexed
shall for all school purposes be deemed to be part of the urban municipality;
this means that the school is taken over as a going concern. The taxes which were the source of the payments in question were devoted by the law to the maintenance of the school, and they ought not to be diverted from this purpose merely because of a change in the administrative authority.
For these reasons I would allow the appeal and restore the judgment of the learned trial judge; the appellants are entitled to their costs of both appeals.
IDINGTON J.—The school section No. 11 of the township of Sandwich West, was, by an order of the Ontario Railway and Municipal Board, dated 29th December, 1921, annexed to the city of Windsor, one of the appellants herein, to become operative from and after the 31st December, 1921.
The respondent Catherine C. Turner was then the secretary-treasurer of the said school section, and so continued till the first of April, 1922, pending arrangements with the school board of the public schools of Windsor.
At the time of the said order she had on hand as such
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secretary-treasurer a balance of $3,235.89, and received on the 25th of February, 1922, on requisition to be paid in respect of taxes for the year 1921, $200 from the treasurer of the township of Sandwich West, and, again from the same source, on the 11th March, 1922, pursuant to a requisition made in October, 1921, $4,000.
The moneys are conclusively proven to have been paid in respect of taxes for the year 1921.
The respondent township some time after set up the contention that all these moneys belonged to the said respondent; by virtue of what pretension I am quite unable to understand.
Of course if the payments had been made in respect of taxes for 1922, an entirely different legal puzzle might have arisen.
The appellant city claims that they are school funds which belonged to said school section 11, so annexed to said city, and passed thereby, as the result of said order of annexation; which would seem to be a reasonable conclusion of law and was so held by the learned trial judge, who tried an issue directed by consent of counsel for the respective parties.
Thereupon an appeal was taken to the Appellate Division of the Supreme Court of Ontario. That court overruled the judgment of the learned trial judge, and directed the said moneys to be paid to the treasurer of the respondent township, to be distributed amongst the ratepayers of the defunct school section.
Why the said respondent township by its counsel failed to claim the school buildings and the furniture as well, I cannot see, for, on their pretension, it would have been just as reasonable.
It is alleged that this judgment of the appellate court below was the result of a mistaken statement by the counsel for said township that the moneys in question, at least as to $4,200, were out of taxes due and arising out of the assessment and levy thereof for the year 1922. Hence this appeal from said reversing judgment. And said counsel reiterated same before us notwithstanding the clear evidence of those knowing the facts being pointed out to him. He pretended to claim herein that Paré, the treasurer of said township, who had paid the $4,200 to the school treas-
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urer, was so ignorant that he could not understand what he was doing.
Yet he had called as witness for his clients at the trial, this same Mr. Paré and examined him in regard to the adjustment of several other matters which had arisen between appellant city and the township, but did not venture, in such examination to touch upon the vital question of whether it was for taxes arising out of 1921 assessment, as had been sworn to by several other witnesses previously called.
I cannot understand such a course of conduct on the part of counsel.
I, suspecting the possibility that there might have been debentures issued by the township for the school section, asked him if he knew whether there had been such or not, and he replied thereto that he did not know. If there had been I assume that the charge therefor would have been brought forward at the time of the other adjustments.
On the foregoing state of facts I am with great respect unable to agree with the judgment appealed from, and would allow this appeal with costs here and of the appeal below, to be paid by the said respondent township to the appellant, and the judgment of the learned trial judge should be restored.
I am surprised that counsel could not refer to any specific enactment dealing with such annexations, and the results arising therefrom, but the general purview of the legislation dealing with the consequences ensuing upon such like annexations certainly imply that the school house and all other assets of the rural school board pass in such a case to the city’s school board—subject, of course, to any liabilities of said rural school board, for example, debentures, if any, or salaries.
Appeal allowed with costs.
Solicitors for the appellants: Davis, Healey & Plant.
Solicitor for the respondent: John Sole.
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