Applewood Dixie Ltd. v. Mississauga, [1970] SCR 691

Supreme Court of Canada

Applewood Dixie Ltd. v. Mississauga, [1970] S.C.R. 691

Date: 1970-03-19

Applewood Dixie Limited and Shipp Corporation Limited (Plaintiffs) Appellants;

and

The Town of Mississauga, formerly The Corporation of the Township of Toronto (Defendant) Respondent.

1970: February 4, 5; 1970: March 19.

Present: Martland, Judson, Hall, Spence and Pigeon JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Expropriation—Municipal by-law to expropriate certain lands for reservoir—Whether municipality which has established public utilities commission retains power to expropriate for purposes of public utility—The Municipal Act, R.S.O. 1960, c. 249—The Public Utilities Act, R.S.O. 1960, c. 335—The Ontario Water Resources Commission Act, R.S.O. 1960, c. 281.

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In 1963 the Township of Toronto (now the Town of Mississauga), which had established a public utilities commission, passed a by-law to expropriate certain lands belonging to the appellants for the purpose of a reservoir. The work was completed and the by-law stood unchallenged until October 19, 1966, when an action was started for a a declaration that the by-law was void. The action was dismissed at trial and an appeal from the trial judgment was dismissed by the Court of Appeal. An appeal was then brought to this Court.

The appellants argued that the exclusive power of expropriation rests with the public utilities commission or that if any power remained in the municipality, it had to be exercised in the name of the municipality by the commission and not by the township council. As a second ground of invalidity, it was argued that the township had neglected to obtain the approval of the Ontario Water Resources Commission and was in breach of The Ontario Water Resources Commission Act, R.S.O. 1960, c. 281, s. 30.

Held: The appeal should be dismissed.

As held by the trial judge, a municipality which has established a public utilities commission retains its power to expropriate lands for the purposes of the public utility. The transfer of power from council to commission, under s. 41 of The Public Utilities Act, R.S.O. 1960, c. 335, does not override the municipal power of expropriation under The Municipal Act, R.S.O. 1960, c. 249. The position of the public utilities commission is that of an agent of the municipality. Section 379(1), subs. 52, of The Municipal Act still stands unimpaired as a municipal purpose of the exercise of the municipal power of expropriation under s. 333(1).

The appellants’ second submission was also rejected. Subsection (2) of s. 30 of The Ontario Water Resources Commission Act carries its own penalties for failure to observe the provisions of subs. (1). The invalidity of the by-law passed by a municipal corporation for the purpose of expropriating land preliminary to construction is not one of these penalties.

City of Belleville v. Public Utilities Commission of the City of Belleville, [1943] O.R. 87; Young v. Town of Gravenhurst (1911), 24 O.L.R. 467; Collins v. Hydro-Electric Commission of Renfrew, [1948] O.R. 29, referred to.

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APPEAL from a judgment of the Court of Appeal for Ontario[1], dismissing an appeal from a judgment of Wells C.J.H.C. Appeal dismissed.

Malcolm Robb, Q.C., for the plaintiffs, appellants.

J.T. Weir, Q.C., and G.J. Smith, for the defendant, respondent.

The judgment of the Court was delivered by

JUDSON J.—The main issue in this appeal is whether a municipality which has established a public utilities commission retains its power to expropriate lands for the purposes of the public utility. At the trial of this action, Wells C.J.H.C, held that it did. The Court of Appeal¹, in dismissing the appeal from the judgment at trial, went further. Its judgment was that the municipality had the sole power of expropriation. My opinion is that the municipality does retain this power of expropriation and that it is unnecessary to decide whether it has the sole power.

The by-law in question in this action was passed by the Township of Toronto, which is now the Town of Mississauga, on December 9, 1963. It expropriated approximately 19 acres belonging to the appellants for the purpose of a ground storage reservoir and a pipeline for carrying the water from the reservoir to the water purification plant. This work was completed and the by-law stood unchallenged until October 19, 1966, when an action was started for a declaration that the by-law was void. The appellants in this Court are still arguing that the exclusive power of expropriation rests with the public utilities commission or that if any power remained in the municipality, it had to be exercised in the name of the municipality by the public utilities commission and not by the township council.

I will state at once where, in my opinion, the municipality’s power to expropriate is to be found. I point to the following sections of The Municipal Act:

Section 5, which gives the power to expropriate in general terms;

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Part XV, ss. 332-337, particularly s. 333, subs. (1), which gives the power to expropriate land required for the purposes of the corporation;

Section 379(1), subs. 52, which gives the municipality power to pass by-laws

For authorizing the completion, improvement, alteration, enlargement or extension of any public utility undertaking, or any part or parts thereof, owned by the corporation and controlled and managed by the council or a public utility commission and for issuing debentures therefor.

(a) In this paragraph,

(i) “public utility undertaking” means a water works or water supply system, sewage works, electrical power or energy generating transmission or distribution system, street lighting system, natural or artificial gas works or supply system, and a transportation system, and includes any lands, buildings or equipment required for the administration or operation of any such system,

(ii) “public utility commission” means a commission or board having the control and management of a public utility undertaking.

* * *

(f) The powers conferred by this paragraph may be exercised in respect of the whole municipality or any defined area thereof, and a special rate for the completion, improvement, alteration, enlargement or extension of any public utility undertaking under this section may be imposed upon all the rateable property in the municipality or in any such defined area.

The plain words of this section give the municipality power to deal with a public utility undertaking, notwithstanding the fact that the undertaking is controlled and managed by a public utility commission. Power to pass by-laws authorizing “completion, improvement, alteration, enlargement or extension” includes power to pass expropriation by-laws pursuant to s. 333(1). The power given by s. 379(1), subs. (52), is specifically exercisable whether the public utility is controlled and managed by the council or by a public utility commission.

The appellants rely on The Public Utilities Act. Part I of this Act gives the municipality

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power to acquire, establish, maintain and operate waterworks and to expropriate whatever land may be deemed necessary for this purpose (s. 2). Section 3 makes applicable Parts XV and XVI of The Municipal Act. Part XV of The Municipal Act I have already mentioned. It deals with expropriation. Part XVI deals with arbitration. Section 38 of The Public Utilities Act authorizes the establishment of public utilities commissions. Section 41 of the same Act defines the powers of the commission in these terms:

41. (1) Subject to subsection 4, where a commission has been established under this Part and the members thereof have been elected or where the control and management of any other public utility works are entrusted to a commission established under this Part, all the powers, rights, authorities and privileges that are by this Act conferred on a corporation shall, while the by-laws for establishing the commission or entrusting it with the control and management remain in force, be exercised by the commission and not by the council of the corporation.

(2) The officers and employees of the corporation shall be continued until removed by the commission unless their engagement sooner terminates.

(3) Every officer, employee and servant of a commission shall hold office during the pleasure of the commission.

(4) Nothing in this section divests the council of its authority with reference to providing the money required for the works, and the treasurer of the municipality shall, upon the certificate of the commission, pay out any money so provided, and nothing in this Act divests the council of the rights and powers conferred upon it by The Local Improvement Act.

(5) Where the construction or control and management of a public utility works belonging to a municipal corporation is entrusted to a commission,

(a) no part of the works shall be undertaken in or extended into and no supply of the public utility shall be furnished to or in any other municipality by the commission without the consent of the council of the corporation to which the public utility works belong; and

(b) no extensions, additions, enlargements, improvements or alterations in, of or to the works shall be undertaken by the commission without the

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consent of the council of the corporation to which the public utility works belong, if the cost or any part of the cost is intended to be provided for out of moneys that under section 35 are required to be paid to the treasurer of the municipality.

My first comment is on subs. (5) of s. 41. It was added in 1949 following the decision in City of Belleville v. The Public Utilities Commission of the City of Belleville[2], where the commission had attempted to assert the power to extend the waterworks without consent of the council. As to the transfer of power from council to commission, both Wells C.J.H.C. and a unanimous Court of Appeal have held that it does not override the municipal power of expropriation under The Municipal Act.

The position of the public utilities commission under this legislation has never been in doubt since Young v. Town of Gravenhurst[3]. It is an agent of the municipality. The principle is again stated in Collins v. The Hydro-Electric Commission of Renfrew[4] by Robertson C.J.O. in these terms:

In my opinion the appellant has misconceived the relation of the respondent to the municipal corporation. The respondent is a mere agent of the municipal corporation, exercising whatever powers it has for and on behalf of the municipality. I am aware that in some of the legislation passed in recent years the relationship has become somewhat confused, and it seems to have been considered that a hydro-electric commission established in a municipality had some independent status other than that of the agent and trustee of the municipality. In my opinion the true relationship is still the same as it was when Young v. Town of Gravenhurst (1911), 24 O.L.R. 467 was decided.

The conclusion of Wells C.J.H.C. on this point is stated in the following paragraph:

Whether the Public Utilities Commission of what is now the Town of Mississauga has the power of expropriation by virtue of Section 41(1) is a point on which I make no finding as I do not think it is necessary to my decision in this case, but I see

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nothing in all this to deprive the municipality of the powers vested in it by the Municipal Act. Section 41 of the Public Utilities Act only vests the powers given by that Statute and does not attempt to put any limitations on the powers of the municipality which it derives from other Statutes. It is quite clear, however, in my estimation, that the Public Utilities Corporation operates as an agent of the municipality.

I am in complete agreement with this proposition and it is sufficient to decide the main issue in this appeal. Section 379(1), subs. 52, of The Municipal Act still stands unimpaired as a municipal purpose for the exercise of the municipal power of expropriation under s. 333(1). Indeed, the last revision to this section was in Statutes of Ontario 1961-62, c. 86, s. 42(4), which dealt with the imposition of special rates that might be necessary as a result of the exercise of the powers under the section. This must involve a continuing recognition of the existence of the power.

A second ground of invalidity was argued, namely, that the township had neglected to obtain the approval of the Ontario Water Resources Commission and was in breach of The Ontario Water Resources Commission Act, R.S.O. 1960, c. 281, s. 30. The facts are that the municipality made application for the approval of this work to the Ontario Water Resources Commission through its consulting engineers on July 8, 1963, some months before the by-law in question was passed. The written approval of the Commission is dated in September 1964, after the passing of the by-law. The appellants produce no evidence that the work had been undertaken or proceeded with without the proposed works having been approved by the Commission. I would think that the written approval of the Commission of September 1964, together with the early application of the consulting engineers, is strong indication that the proposed works had the approval of the Commission.

Section 30, subss. (1) and (2) read:

30. (1) When any municipality or any person contemplates the establishment of any water works, or the extension of or any change in any existing

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water works, the plans, specifications and an engineer’s report of the water supply and the works to be undertaken, together with such other information as the Commission may require, shall be submitted to the Commission, and no such works shall be undertaken or proceeded with and no bylaw for raising money to finance such works shall be passed until the source of water supply and the proposed works have been approved by the Commission.

(2) Where any person undertakes or proceeds with the establishment of any water works, or the extension of or change in any existing water works, without having first obtained the approval of the Commission, the Commission may order the person to afford at his own expense such facilities as the Commission may deem necessary for the investigation of the works and the source of water supply and may direct such changes to be made in the source of water supply and in the works as the Commission may deem necessary, and any changes directed by the Commission to be made in the works shall be carried out by the person at his own expense.

There may be doubt whether this section has any application to the expropriating by-law itself. If it does and the approval of the commission is denied, then the municipality may be in difficulties with the ownership of land which it cannot use for the intended purpose. But again, I agree with the conclusion of Wells C.J.H.C. that subs. (2) of s. 30 carries its own penalties for failure to observe the provisions of subs. (1). The invalidity of the by-law passed by a municipal corporation for the purpose of expropriating land preliminary to construction is not one of these penalties.

I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitor for the plaintiffs, appellants: Malcolm Robb, Toronto.

Solicitors for the defendant, respondent: Arnup, Foulds, Weir, Boeckh, Morris & Robinson, Toronto.