Canadian Pacific Ry. Co. v. Grand Trunk Ry. Co., (1914) 49 SCR 525

Supreme Court of Canada

Canadian Pacific Ry. Co. v. Grand Trunk Ry. Co., (1914) 49 S.C.R. 525

Date: 1914-03-23

The Canadian Pacific Railway Company Appellants.

and

The Grand Trunk Railway Company Respondents.

(Myrtle Bridge Case:)

1914: March 10, 23.

Present: Idington, Duff, Anglin and Brodeur JJ.

ON APPEAL FROM THE BOARD OF RAILWAY COMMISSIONERS FOR CANADA.

Railways — Crossing lines — Overhead bridges — Contract for maintenance—Future traffic.

A railway company wishing to cross the line of another contracted with the latter for four crossings, three by an overhead bridge and one by a subway under a bridge of the other company. The contract contained this provision: “The said several crossings * * shall all be maintained at the cost of the Ontario Company (junior road), and shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company (senior road).” The said bridges were to be constructed according to plans and specifications settled and approved by the chief engineer of the senior road, and if the junior failed to maintain them to the satisfaction of said chief engineer the senior could cause the necessary work to be done at the cost of the other company.

Held, that the obligation of the junior road was not merely to keep the crossings in good and sufficient repair in the condition they were in when the contract was made, but they could, at any time, be ordered by the Railway Board to make them fit for the heavier traffic caused by the increased business of the senior road.

CASE stated by the Board of Railway Commissioners for Canada for the opinion of the Supreme Court of Canada on the question of law raised by the parties.

The following is the case stated by the Board, omitting the portions not material on this appeal:—

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1. For the purpose of the construction of the Ontario and Quebec Railway Company’s line (now controlled by appellants), that company entered into an agreement with the Midland Railway Company (controlled by respondents) providing for four crossings of the line of that company, three of which, under the agreement, were to be effected by means of structures built over the line of the Midland, and one (the crossing now in question), by a structure carrying the Midland track over the line of the Ontario and Quebec Railway.

2. The following is a true copy of said agreement:—

“This deed made this twenty-first day of February, in the year of Our Lord, 1883.

“By and between:

“The Midland Railway of Canada, hereinafter called the Midland Company, of the first part, and

“The Ontario and Quebec Railway Company, hereinafter called the Ontario Company, of the second part.

“Whereas the Ontario Company propose with their line to cross the lines of the Midland Company at the points and in the manner following, that is to say:

* * * *

“The Whitby section by an undercrossing at or near Myrtle station.

* * * *

“And whereas the Ontario Company desire the Midland Company to assent to the said respective crossings, and the Midland Company is willing to do so, but only upon and subject to the terms and conditions hereinafter expressed, and the performance of which forms the consideration for the said consent.

“Therefore, this deed witnesseth that in this deed

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the words ‘The Ontario Company’ shall mean the party hereto of the first part, and the words ‘the Midland Company’ shall mean the party hereto of the second part.

“That in consideration of the premises and of the covenants and agreements hereinafter contained on the part of the Ontario Company to be by the Ontario Company observed, kept, and performed, they, the Midland Company, have and by these presents do grant unto the Ontario Company, their successors and assigns forever, the easements, rights, and privileges of crossing with their railway the lines of the Midland Company as follows, that is to say:—

“4. At Myrtle, on the Whitby and Port Perry section of the Midland ‘Company’s line, by an undercrossing.

* * * *

“With respect to the said undercrossing of the Midland Company’s Whitby (section or line, it is expressly covenanted and agreed that the Ontario Company shall prepare and submit to the chief engineer of the Midland Company the detailed plans and specifications for the work to be done.

“That these plans and the specifications for the work shall, before the work is commenced, be settled and approved by the said chief engineer of the Midland Company, and when approved by him shall be signed by him, and his signature shall be the only evidence receivable of his said approval.

“That the whole of the material used in the work of every kind, and the workmanship, shall be in accordance with the plans and specifications, so after the execution of these presents to be settled, agreed

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upon, and signed, and shall be done to the entire satisfaction of the said chief engineer of the Midland Company.

“That the said several crossings above mentioned shall all be maintained at the cost of the Ontario Company, and shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company; and against all damage because of the construction or non-maintenance of the said crossings, and each of them, the Ontario Company shall and will save the Midland Company harmless.

“That, if at any time the Ontario Company fail or neglect to maintain the said crossings respectively to the satisfaction of the chief engineer for the time being of the Midland Company, the said last-mentioned company may cause such repairs to be made, or said maintenance to be done, as by their said chief engineer may be deemed necessary, and the cost of so doing shall, on the account therefor, certified by the said chief engineer of the Midland Company, being presented, be paid in cash.”

4. The Canadian Pacific Railway Company, in operating a steam shovel used in making betterments in its line, damaged the bridge carrying the Midland line over its tracks (the crossing in question), and on February 6th, 1913, made application to the Board for its approval of temporary false work to support the bridge.

5. The Grand Trunk Railway Company (owning and operating the Midland Railway), then made application to the Board for an order directing the

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Canadian Pacific Railway Company, at its expense, to reconstruct, in accordance with stress sheet, dated 5 th March, 1913, and submitted therewith, and thereafter maintain in a good and proper condition of repair, the bridge in question (which provides the undercrossing referred to in the agreement), so that the same shall be safe for the passage thereover of the traffic on the Grand Trunk Railway. It is on this application that Order No. 19298 has been made by the Board.

6. Under the ordinary practice of the Board, the Canadian Pacific Railway, as the junior line, would have to provide a bridge sufficient for the present proper and reasonable requirements of the Grand Trunk, as ordered by the Board.

7. The crossing in question having, however, been constructed under the above agreement, and not under the Board’s order, the issue between the parties is determined by the agreement.

The question reserved at the request of the Canadian Pacific Railway Company for determination by the Supreme Court of Canada is:—

Whether or not, under the agreement, the obligations of the Canadian Pacific Railway Company are confined to maintaining the bridge as originally constructed, irrespective of the increased requirements of traffic carried on the Grand Trunk Railway.

8. Should the opinion of the said Court be that the liability of the Canadian Pacific Railway Company is so limited the Grand Trunk Railway Company will pay to the Canadian Pacific Railway Company the sum of Two Thousand Two Hundred and Fifty Dollars ($2,250), the additional cost of a bridge

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to carry the increased load, and one-eighth of the annual cost of up-keep.

* * * *

W. N. Tilley, for the appellants.

Lafluer K.C. and Chisholm K.C. for the respondents.

Idington J.—The dispute in question herein turns upon the construction of the following clause in the agreement between the respective predecessors in title of the parties hereto.

That the said several crossings above mentioned shall all be maintained at the cost of the Ontario Company, and shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company; and against all damage because of the construction or non-maintenance of the said crossings, and each of them, the Ontario Company shall and will save the Midland Company harmless.

It is the crossing that is to be maintained and evidently in perpetuity. To interpret the word “maintained” (a word of varying and doubtful import) as used here we must look at the scope and purpose of the whole agreement, and bear in mind the relation of the parties to each other, and why and how that came about. We must also bear in mind that the parties must have observed and known in 1883 (what every person having to do with railway building and maintenance then knew so well) that there was a continuous tendency to increase the load and consequent strain put upon such structures as this, and we must, therefore, assume that they anticipated the possibility of reconstruction to meet such emergency.

When we bear all these things in mind, I think we must conclude that the party covenanting became bound to provide against each and all such emergencies

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and undertook with the other to bear whatever expenses were necessary to maintain the crossing in such manner as to enable that other safely to pass over with such load as at the time and occasion of its doing so might reasonably be used in the course of its business.

I do not think that the reference made to the manner in which other crossings were to be then executed can determine anything relative to this, or that the manner in which this one was to be constructed or the method by which the temporary agreement for executing the work was specified, can have anything to do with the matter now arising.

The parties were very properly trying in an amicable manner to produce by such details being inserted in the agreement what would suit the then time and occasion and be satisfactory for use for a reasonable length of time at least.

The time seems to have come, after thirty years of development, that the structure is no longer adapted for the service now demanded.

Of course, we have nothing to do with the facts relative to the necessity. All that we have to do is to assume that such a necessity has arisen by reason of the increased requirements of respondent’s traffic, and determine whether or not the agreement is to be interpreted and construed as an undertaking against such possible necessity.

I think it is to be so interpreted and construed, and that the submission must be answered accordingly.

I do not see any provision made for the costs of this appeal. Of course, if there is none or understanding

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relative thereto, the usual rule of costs being borne by the unsuccessful party will have to prevail.

Duff J.—There were two observations in the able argument of Mr. Tilley which I fully accept: First, that in construing an agreement of this character one should be cautious in taking for granted that the circumstances immediately surrounding the transaction give the clue to all the considerations by which the contracting parties were actuated; and exceedingly cautious also in allowing such circumstances to suggest ambiguity in clauses not otherwise difficult to construe. Second, the agreement ought to be construed as a whole—in the sense that one ought not to assume that an apparently leading provision is an overruling provision. The terms of the agreement are as follows:—

This deed made this twenty-first day of February, in the year of Our Lord, 1883.

By and between:

The Midland Railway of Canada, hereinafter called the Midland Company, of the first part, and

The Ontario and Quebec Railway Company, hereinafter called the Ontario Company, of the second part.

Whereas the Ontario Company propose with their line to cross the lines of the Midland company at the points and in the manner following, that is to say:

The Grand Junction section of the said Midland Company’s railway by an overhead bridge or crossing at or near Crookston.

The Nipissing section by an overhead bridge or crossing at or near Agincourt.

The Whitby section by an undercrossing at or near Myrtle station.

On the Midland section of the Midland Company’s lines near Bethany, by an overhead bridge or crossing.

And whereas the Ontario Company desire the Midland Company to assent to the said respective crossings, and the Midland Company is willing to do so, but only upon and subject to the following terms and conditions hereinafter expressed, and the performance of which forms the consideration for the said consent.

Therefore, this deed witnesseth that in this deed the words “The

[Page 583]

Ontario Company” shall mean the party hereto of the first part, and the words “The Midland Company” shall mean the party hereto of the second part.

That, in consideration of the premises and of the covenants and agreements hereinafter contained on the part of the Ontario Company to be by the Ontario Company observed, kept and performed, they, the Midland Company, have and by these presents do grant unto the Ontario Company, their successors and assigns forever, the easements, rights, and privileges of crossing with their railway the lines of the Midland Company as follows, that is to say: —

1. At or near Crookston on the Grand Junction section of the Midland Railway of Canada by a bridge or overhead crossing, and the space between the abutments in the clear shall be sixty feet measured on the line of the Ontario Company.

2. On the Nipissing section of the Midland Railway, at or near Agincourt, by a bridge or overhead crossing, and the space between the abutments in the clear shall be seventy feet measured on the line of the Ontario Company.

3. At or near Bethany, on the Midland section of the Midland Railway of Canada, by a bridge or overhead crossing, having the space between the abutments in the clear of thirty-seven feet, measured on the line of the Ontario Company.

4. At Myrtle, on the Whitby and Port Perry section of the Midland Company’s line, by an undercrossing.

That each of the said several overhead crossings shall be made by a good substantial bridge on the plan and such material and workmanship as the Midland Company’s chief engineer shall require and approve.

That each of the said bridges shall be well and substantially built, and shall have a space in each case in the clear for the purposes of the Midland Company as the Midland Company’s chief engineer shall require and approve.

That each of the said bridges shall be well and substantially built, and shall have a space in each case in the clear for the purposes of the Midland Company, of the number of feet above expressed, and in each case shall be erected, kept, and at all times hereafter maintained in a good and sufficient state of repair and at such a height above the Midland Company’s line of rails as shall secure at least seven feet clear above the highest of any freight cars now or hereafter passing over the Midland Company’s said lines, respectively, as provided in the statutes in that behalf, now in force, or which may hereafter be passed by competent authority in that behalf, and this shall be done at the cost and charges of the said the Ontario company.

That every means shall be used to protect the Midland Company’s line or premises from injury or damage from the said bridges, and from any car, engine or other machinery which may use or pass over the said bridges respectively.

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That the said bridges or overhead crossings respectively shall be so protected and so maintained at the costs and charges of the Ontario Company that nothing can or may fall through from any of them upon the line of the Midland Company over which they severally are erected; and that the Ontario Company, in all the above respects, will use and exercise due care and diligence.

With respect to the said undercrossing of the Midland Company’s Whitby section or line, it is expressly covenanted and agreed that the Ontario Company shall prepare and submit to the chief engineer of the Midland Company the detailed plans and specifications for the work to be done.

That these plans and the specifications for the work shall, before the work is commenced, be settled and approved by the said chief engineer of the Midland Company, and when approved by him shall be signed by him, and his signature shall be the only evidence receivable of his said approval.

That the whole of the material used in the work of every kind, and the workmanship, shall be in accordance with the plans and specifications so after the execution of these presents to be settled, agreed upon, and signed, and shall be done to the entire satisfaction of the said chief engineer of the Midland Company.

That, while the work is in progress, the instructions and directions of the said Midland Company’s said chief engineer shall be observed, and the work shall be so managed and carried on as not to interfere with or interrupt or endanger the traffic, trains, or property of the Midland Company in passing on their said line.

That the said several crossings above mentioned shall all be maintained at the cost of the Ontario Company, and shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company, and against all damage because of the construction or non-maintenance of the said crossings, and each of them, the Ontario Company shall and will save the Midland Company harmless.

That, if at any time the Ontario Company fail or neglect to maintain the said crossings respectively to the satisfaction of the chief engineer for the time being of the Midland Company, the said last-mentioned company may cause such repairs to be made, or said maintenance to be done, as by their said chief engineer may be deemed necessary, and the cost of so doing shall, on the account therefor, certified by the said chief engineer of the Midland Company, being presented, be paid in cash.

That in doing the work of building such crossings, respectively, no impediment or interruption to the traffic of the Midland Company shall take place, and the whole of said work shall be done under the orders, and subject to the orders and control of the chief engineer of the said Midland Company.

Each of the said parties hereto covenants with the other to observe, abide by, and perform the above agreement in all respects according to the spirit, true intent, and meaning thereof.

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In Witness Whereof the said parties hereto have to these presents set their corporate seal on the clay and year first above written.

Signed, sealed and delivered in the presence of

For the Midland. Railway of Canada,

(Sgd.) Geo. A. Cox, President. [L.S.]

H. W. Nanton, Secretary-Treasurer.

For the Ontario and Quebec Railway Company,

(Sgd.) Edward B. Osler, President. [L.S.]

The principal point made by Mr. Tilley in support of the appeal is that, (as the undercrossing at Myrtle was to be constructed conformably to plans and specifications “settled and approved” by the chief engineer of the Midland Company, and “to his entire satisfaction,”) the whole duty of the Ontario Company was to maintain the undercrossing and keep it in sufficient repair and in a “good and safe state,” as it was when it was passed on by that officer. That, no doubt, is a possible construction. But it is not by any means the only construction. The specific provisions with respect to the Myrtle crossing may without difficulty be read as establishing simply a condition precedent to the right of the Ontario company to cross the line of the Midland Company at that place and not as limiting, in relation to that crossing, “the subject-matter of the general provision of the contract requiring the Ontario Company to maintain all the crossings “in a good and safe state so as in no way to endanger the property of the Midland Company.” I think the latter is the preferable view, because, observing strictly the, cautions above indicated, (as I think they ought to be observed in construing this agreement,) both parties must be presumed to have acted in view of the probability, as the learned Chief Commissioner remarks, of the load being increased from time to time; and it is manifestly improbable that the

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Ontario Company could have intended that the chief engineer of the Midland Company should be under a duty to his principals requiring him to insist that the initial design and construction of the undercrossing should be sufficient to provide for any increase of load that might take place in the future; and such, obviously, would be the effect of the construction the appellants as successors to the Ontario Company now contend for. I think the more satisfactory reading of the provision last referred to is to construe the words

shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company

as stipulating for maintenance according to a varying standard sufficient to permit the safe passage of traffic as the conditions of traffic over the Midland Company’s line might from time to time require. I concur in the view of the majority of the Board of Railway Commissioners as expressed in the judgment of the learned Chief Commissioner.

Anglin J.—In my opinion the scope and character of the obligation of maintenance assumed by the appellants under the agreement of the 21st February, 1883, in respect of the crossing at Myrtle, as well as the other crossings with which that instrument deals, is to be found in the provision that

said several crossings above mentioned shall all be maintained at the cost of the Ontario Company, and shall each always be maintained in a good and safe state, and so as in no way to endanger the property, fixed or movable, of the Midland Company.

This clause entailed in respect of the other crossings, where the right-of-way of the Ontario and Quebec Railway Company is carried over the Midland Railway, the duty of maintaining bridges adequate to bear

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any increased weight of the rolling stock which the Ontario and Quebec Railway Company or its lessees might see fit to use in the future; it entailed a corresponding obligation to provide and maintain a bridge at Myrtle sufficient to carry in safety such rolling stock as the Grand Trunk Railway Co. might, in meeting the requirements of future traffic, find it economically necessary or advantageous to employ on its railway. Apart from agreement there can be little doubt that the Grand Trunk Railway Co., as senior road, could have obtained an order imposing this obligation on the Ontario and Quebec Railway Company when it sought the right of crossing. It is most improbable that it was the intention of the parties by their agreement to deprive the Grand Trunk Railway Company of any benefit which it might derive from its seniority. There is nothing to indicate an intention to abandon any such advantage. Read in the light of the circumstances under which it was entered into, I think the agreement makes sufficiently clear the obligation to which the Board of Railway Commissioners have held the appellants to be subject.

The appeal should be dismissed with costs.

Brodeur J.—The right of one railway company to cross the track of another is as undoubted as its right to cross the land of the original owner. The senior road is then entitled as the original owner to proper compensation. In this case the right to cross was secured by the junior road undertaking to maintain the four crossings mentioned in the agreement,

in a good and safe state, and so as in no way to endanger the property, fixed or movable

of the senior road.

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No compensation in money or otherwise was stipulated.

All those four crossings were high level. In three cases subways were to be used by the senior road and in the other case the subway was to be used by the junior road. Four bridges then were to be constructed and maintained by the junior road.

The appellant, the Canadian Pacific Railway Co., is the successor in title of the junior road and the senior road is represented by the Grand Trunk Railway Co.

It is pretty clear by the provisions of the contract that the parties contemplated not only the then existing requirements of the traffic, but also the reasonable improvements consistent with the good administration of a railway.

Heavier engines and trains having required the laying of stronger bridges, the Canadian Pacific Railway Co. proceeded to build them at the three crossings where their track was passing above the Grand Trunk Railway Co. But haying refused to give a similar strength to the bridge that was utilized by the Grand Trunk Railway Co., the Canadian Pacific Railway Co. was ordered by the Railway Commission to do it.

The obligation of the junior road is to see that the crossings should always be kept in such a way that the property of the senior should never be endangered, and even in the case where the subways were utilized by the Grand Trunk Railway Co. the Canadian Pacific Railway Co. is bound to change its height if the alterations made in the size of the cars required it. The contracting parties had not in view then only the present, but also the future, and they thought that the provision of the contract was sufficiently

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clear to cover stronger bridges if the necessities of the traffic required it.

“Maintenance” would in the ordinary sense mean “keep in repair”; but it must vary according to the instrument in which it is found and the circumstances in which it has been used.

It was decided in the case of Sevenoaks, Maidstone and Tunbridge Railway Co. v. London, Chatham and Dover Railway Co.[1], that

under power to maintain a railway and works, reasonable improvements, consistent with the purpose oil the undertaking, are included.

Mr. Justice Killam in construing a contract between the Intercolonial Railway and the Grand Trunk Railway Co. said:—

It appears to me, therefore, that the term “maintenance” was not limited to keeping the railway and works in the condition in, which they were when the contract was made; and that there was no implied condition that the railway was then in a thorough working condition for the purpose of the future traffic; and it appears to me that the parties must also have contemplated that these changes would be constantly going on, and that they were going on at the very time the contract was made—as the evidence shewed to have been the fact, to the knowledge of a number of officials of the Intercolonial Railway. And it must also have been within the contemplation of the parties that the company should not wait until a portion of the line or some structure or appliance connected with it was wholly unfit for use before repairing, replacing or improving it. In a work of this kind it is necessary to anticipate and to prepare in advance, in order that it may be kept in a thorough efficient working condition. The cost of anything reasonably required for this purpose appears to me to be part of the cost of maintenance to which the Crown is bound to contribute.

Among the authorities cited in support of this opinion, Mr. Justice Killam cites the case of The Leek Improvement Commissioners v. Justices of the County

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of Stafford[2], in which Lord Esher said, at page 796:—

It might be that if owing to the increasing traffic it became necessary to use harder stone than had been used previously to repair such a road, so as to provide a better macadamized road to meet the requirements of the traffic, the highway authority in so doing would only be maintaining the road.

We have a very recent case decided by the Court of Appeal in England, on the 28th of January last, Attorney-General v. Sharpness New Docks and Gloucester and Birmingham Navigation Co.[3], bearing on the question at issue in this case. By an Act passed in 1791, a company was empowered and directed to make bridges to carry highways over a certain canal. The Act provided that all such bridges should from time to time be supported, maintained and kept in sufficient repair by the company. It was held.

that the company was under the obligation to repair the bridges according to the standard of the traffic requirements of the present day.

These authorities are conclusive and, in my opinion as to the provisions of the contract, the circumstance of the case, where a junior road obtains the use of a senior road without any compensation, the fact that a railway company has no right to cross the track of another so as to impair the exercise of its franchise shews that the Grand Trunk Railway Co. had the right to require that the bridges should be of such a character as to properly carry on its business.

The appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitor for the appellants: E. W. Beatty.

Solicitor for the respondents: W. H. Biggar.