Saint-Laurent (City of) v. Quebec Hydro-Electric Commission, [1978] 2 SCR 529

Supreme Court of Canada

Saint-Laurent (City of) v. Quebec Hydro-Electric Commission, [1978] 2 S.C.R. 529

Date: 1978-02-07

City of Saint-Laurent Appellant;

and

Quebec Hydro-Electric Commission Respondent.

1977: November 3 and 4; 1978: February 7.

Present: Ritchie, Pigeon, Dickson, Beetz and Pratte JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Municipal law—Assessment—Taxation of machinery and accessories—Cities and Towns Act, R.S.Q. 1964, c. 193, s. 488.

Property—Electrical substations—Immovable by destination—Immovable by nature—Civil Code, arts. 375 and 376.

Respondent operates six electricity transforming sub-stations located on territory belonging to appellant. These stations are made up of “buildings” including constructions and workshops erected on the land, and of “machinery and accessories”. When appellant entered the value both of the buildings and of the machinery and accessories on its valuation roll for 1967 and 1969, respondent appealed to the Provincial Court, which refused to vary the decisions of the Board of Revision. The Court of Appeal of Quebec reversed these judgments on the ground that the machinery and accessories were not immovable by nature and therefore not taxable. Hence the appeal to this Court.

Held: The appeal should be dismissed.

Whether or not the machinery in question is taxable depends solely on whether it is immovable by nature or by destination. Appellant argues that this equipment is immovable by nature because: (1) it is an integral part of the “buildings” in which it is located, which would be incomplete without it; or (2) it is an integral and necessary part of respondent’s transmission and distribution system, which is itself immovable by nature.

With regard to the first argument, the Court can see no distinction between the nature of the equipment in the case at bar and the nature of the equipment that it held to be immovable by destination in Aluminium du Canada Ltée v. La Corporation municipale du village de Melocheville, [1973] S.C.R. 792.

[Page 530]

The second argument is also without foundation. A movable does not become immovable by nature simply because it is connected to a distribution system or necessary to its use. The movables that become immovable by nature because they are part of a distribution system are those which are really incorporated into that system. In the case at bar, the transforming stations constitute physical entities that are distinct from the transmission and distribution line, even though the latter could not operate without them. Respondent’s equipment is above all an accessory, and in a way the machinery, of the transmission station in which it is located. It is less integrated into the transmission system than into the transforming station in which it is located.

Aluminium du Canada Ltée v. La Corporation municipale du village de Melocheville, [1973] S.C.R. 792; Bell Telephone Company of Canada v. City of Saint-Laurent (1934), 57 Que. K.B. 11, reversed by [1936] A.C. 73, (1935), 60 Que. K.B. 101, applied; Montreal Light, Heat and Power Consolidated v. City of West-mount, [1926] S.C.R. 515; Lower St. Lawrence Power Co. v. L’Immeuble Landry Ltée, [1926] S.C.R. 655; Montreal Light, Heat and Power Consolidated v. City of Outremont, [1932] A.C. 423, (1932), 53 Que. K.B. 133; Cablevision (Montreal) Inc. v. Deputy Minister of Revenue of the Province of Quebec, [1978] 2 S.C.R. 64, discussed; Société nantaise d’éclairage v. Admin, de l’enregistrement, (Civ.) D.H. 1937.471; Société Geste-Villedieu v. Admin, de l’enregistrement, Civ. Feb. 24, 1936, D.H. 1936.195, referred to.

APPEAL from a decision of the Court of Appeal reversing two judgments of the Provincial Court. Appeal dismissed.

Irving Gaul and Louise Bélanger, for the appellant.

Gilles Legault and Gilles Marchand, for the respondent.

The judgment of the Court was delivered by

PRATTE J.—The appellant is appealing from two judgments delivered on July 26, 1974 by the Court of Appeal of the Province of Quebec, which allowing the appeals by respondent from judgments of the Provincial Court held that, in the absence of the resolution required by appellant’s charter in this regard, certain items of equipment belonging to respondent were not taxable property because they were not immovable by nature. The

[Page 531]

Court of Appeal consequently reduced by $1,897,-274 the value of respondent’s immovables entered on appellant’s valuation roll for 1967 and 1969.

Respondent operates six stations or substations located in the City of Saint-Laurent, in which electricity transmitted from the Bersimis and Manicouagan generating stations at a voltage of 300,000 volts is transformed in three successive stages into electricity at a voltage of 4,000 volts and relayed to circuits for distribution to consumers. These substations were described as follows by the late Gagnon J.A.:

[TRANSLATION] Each station includes a building that houses a control switchboard, which is more or less the brain of the installation and which controls its operation … The various items of equipment—transformers, circuit breakers, disconnectors, compressors and oil tanks—are placed outside on concrete bases, steel towers or other structures, pedestals or beds while the sets of batteries are in the building.

…

The explanations given show that all these items of equipment, each of which has its own function, form an integrated whole whose purpose is the transformation of electricity.

The power transformer … is the heart of a station. Its main function is to transform the energy it receives and produce electricity at a different voltage or current. This transformer is a very heavy piece of equipment which rests on a concrete base, but is not attached to it.

The purpose of the circuit breakers is to stop the flow of current in case of a defect in other equipment. They are supported by porcelain insulating columns and bolted to a steel framework or pedestal.

The current transformer measures the current and activates the circuit breaker. It is also bolted to a steel structure.

The primary function of a disconnector is to isolate an item of equipment requiring repair. It is powered by a motor placed at its base, and it too is bolted to a pedestal.

The voltage transformer allows voltage to be measured. It is bolted to a bed.

[Page 532]

The oil tanks are placed on a steel bed resembling a sled which is not attached to the ground, which makes it easier to move them. Finally, the sets of batteries, located in the basement of the building housing the control room, are bolted to steel supports that are bolted together.

As the trial judge pointed out, all these machines along with their accessories make up a transforming station. He also noted that these items of equipment may be moved from one station to another as required once the connections, and the bolts if necessary, have been removed. The evidence showed that they could be removed without being broken or destroyed and could be transported by either road or rail, depending on their weight and size. According to Giroux, equipment is moved from one station to another fairly frequently.

Each of these stations therefore comprises, in addition to certain property such as land, buildings, structures, towers and foundations (“buildings”) which are undoubtedly immovable by nature, equipment (“machinery”) used to transform electricity. In a document entitled [TRANSLATION] “ADMISSION AND STATEMENT” included in the record, the parties identified the property in each one of these two categories and agreed on the question at issue. This exhibit reads as follows:

[TRANSLATION] The parties, through their undersigned counsel, admit and state the following:

(1) The word “buildings” refers to constructions and workshops erected on the land, including buildings, structures, concrete bases, steel towers, conductors, conduits and fences;

The expression “machinery and accessories” refers to power transformers, circuit breakers, current transformers, voltage transformers, disconnectors, control switch‑boards, sets of batteries, compressors for circuit breakers and other accessories;

The value of Appellant’s property shown on respondent’s valuation roll for 1967, which is admitted and accepted by the parties subject to paragraph 4 below, may be broken down as follows:

[Page 533]

(This is followed by detailed figures for each station, which produce the following totals:

Land and buildings	Machinery and accessories	Total
$3,372,388	$1,897,274	$5,269,662)

(4) Having accepted the values mentioned in paragraph 3 above, the parties admit that the issue, as regards to the value of appellant’s property for the purpose of respondent’s valuation roll for 1967, resolves itself into determining whether the machinery and accessories located in appellant’s various stations and assessed in the column entitled “Machinery and accessories” on the rolls mentioned in paragraph 3 are:

immovable by nature, in which case they may be assessed by respondent and the total values appearing in column “B” of the said paragraph 3 should apply; or

immovable by destination, in which case, under s. 4 of 2-3 Eliz. II, c. 84, amending respondent’s charter, they are not immovable property that may be taxed by respondent in view of the absence of a Council resolution to this effect, and consequently, only the values appearing in column “A”, as mentioned in paragraph 3 above, should apply.

It should be noted that respondent not having assessed the control switchboards it is unnecessary to determine their nature.

Section 4 of 2-3 Eliz. II, c. 84, to which the parties refer in their “admission”, replaces for the City of Saint-Laurent s. 488 of the Cities and Towns Act by the following provision:

488. The taxable immoveables in the municipality shall comprise lands, constructions and work-shops erected thereon and all improvements made thereto. The actual value of the whole shall be entered in the valuation roll in the name of the owner of the ground. However the council is authorized, by resolution to order the taxation of machinery and accessories which are immoveable by destination or which would be so if they belonged to the owner of the ground. Their real value shall be entered on the valuation roll in the name of the owner of the ground, but, if the latter prove to the assessors that machinery or accessories have been installed by a tenant or other occupant, the value of such machinery and accessories shall be entered in the name of the tenant or

[Page 534]

occupant possessing them who, in this respect, shall be treated as an owner of taxable immoveables.

It is admitted that appellant’s Council did not pass a resolution ordering, for the years in question, “the taxation of machinery and accessories which are immovable by destination or which would be so if they belonged to the owner of the ground”. It follows, therefore, that the only kind of property that was taxable in the City of Saint-Laurent in those years was “lands, constructions and work-shops erected thereon and all improvements made thereto”.

This list of property taxable as of right—all property immovable by nature—must clearly be interpreted so as to exclude property immovable by destination, which is taxable only if a resolution to that effect has been passed by the City Council. There can be no question of considering machinery as an “improvement” in a plant unless it be incorporated therein so as to become an immovable by nature.

This is, indeed, how the problem was stated by the parties both before this Court and before the lower courts: whether or not the machinery in question is taxable depends solely on whether it is immovable by nature or by destination.

Appellant argues that respondent’s equipment is immovable by nature (i) because it is an integral part of the “buildings” in which it is located, and without which they would be incomplete; or (ii) because it is an integral and necessary part of respondent’s transmission and distribution system, which is itself immovable by nature.

Appellant’s first argument appears to me to be contrary to the decision of this Court in Aluminium du Canada Ltée v. La Corporation municipale du village de Melocheville[1], which concerned the nature of an installation for transforming electric power similar to that of appellant in the case at bar. The issue was whether the transformers

[Page 535]

and other accessory equipment installed in the transforming station operated by Aluminium du Canada Ltée for the purposes of its aluminum manufacturing plant were immovable by nature and consequently taxable property under the Municipal Code. This Court held that the transformer installation was immovable by destination and not by nature. Fauteux C.J., speaking for the Court, made the following comments, inter alia:

I would say, therefore, with all due respect for the contrary opinion, that these transformers fall rather into the category of things corporeal and moveable by nature which are destined to become and remain immoveable by destination, as soon and as long as the conditions specified for these purposes in the provisions of art. 379 C.C., complemented to some degree by those of art. 380 C.C., are met in respect of them.

I quote the comments of Mignault on the point (see Mignault, Droit civil canadien, vol. 2, p. 402):

[TRANSLATION] In other words, things brought in a building in order to make use of it do not contribute to its creation. We may say, civilly speaking, and because they adhere to the building, that they are deemed to be part thereof; but strictly speaking, from a purely realistic point of view, they are not an integral part of it. Thus a forge, though installed into the ground and sealed to a wall, is not really part of the building in which it is located. I would say the same is true of vats and boilers which are installed in a factory. They are not really part of the building, however strong be the fixtures holding them to the ground or walls; because even if they were removed the building in which they stand would nonetheless remain complete as a building.

In short, adopting the very apt and concise language of Mr. Justice Mayrand in the aforementioned case, I would say, mutatis mutandis, that the transformers in question, including the auxiliary transformers and oil circuit breakers, complement the industrial undertaking of appellant but not its buildings; they are not part of the structure of its buildings even though they are essential to their destination. (at pp. 795 and 796) (original underlined.)

In my view, it is clear from the reasons of Fauteux C.J. and from those of Brossard J.A., who delivered the judgment of the Court of Appeal, that the nature of the equipment that was held not to be immovable by nature in Melocheville cannot

[Page 536]

be distinguished from that of respondent’s equipment in the case at bar. In this regard it is significant that Brossard J.A., whose opinion in Melocheville was not accepted by this Court, stated in the case at bar that he felt bound by Melocheville:

[TRANSLATION] since the Supreme Court decided in that case that an installation that I would be tempted to describe as a monumental structure and arrangement of equipment similar to the equipment involved in the issue at bar cannot be considered immovable by nature, despite the fact that this installation is erected for an indefinite period of time.

On this first point, therefore, I share the opinion expressed by Gagnon J.A. to the effect:

[TRANSLATION] that the equipment installed by the Commission in its stations is not immovable by nature because, even though it is indispensable to the intended purpose of the buildings that form part of the station, and even though it completes the electricity transforming undertaking, it is not an integral part of the buildings, it does not complete them.

Appellant’s first submission therefore appears to me to be ill-founded.

Appellant also contends that respondent’s machinery partakes of the immovable nature of respondent’s electric power transmission and distribution system, because it is attached to this system, is an integral part thereof and is necessary to its operation.

In dealing with this second argument, it is first necessary to identify the property that has been acknowledged to be immovable by nature because it formed part of an electric power distribution system and to see why it was so treated.

The nature of an electricity distribution system was considered in two decisions delivered by this Court on the same day in 1926: Montreal Light, Heat and Power Consolidated v. City of Westmount[2], and Lower St. Lawrence Power Co.

[Page 537]

v. L’Immeuble Landry Ltée[3].

One of the questions at issue in the Westmount case was as to whether a system of poles, wires and transformers installed in the streets of the City of Westmount and used to distribute electric power was taxable property under the Municipal Code, s. 510 of which (13 Geo. V c. 65) authorized the Council to “impose and levy, annually, on every immoveable in the municipality, a tax of not more than two per cent of the real value as shown on the valuation roll”. Applying the rules of the Civil Code as to the distinction of things, this Court decided that the poles, wires and transformers that made up the electric power distribution system belonging to the appellant company were immovable by nature. Speaking for the majority of the Court, Anglin C.J. said:

The sole question with regard to the statutory power to impose the taxes sued for—municipal and school alike—is whether the subjects of taxation in this instance are immovables within the meaning of that term as used in art. 5730 of the R.S.Q., 1909. That question formed the principal matter of discussion at bar; but, while not free from difficulty, it would seem to be concluded adversely to the appellant by the decision of this court in Bélair v. Ste. Rose, ([1922] 63 S.C.R. 526) as to the gas mains and electric poles and wires, which, for the reasons there stated, must be regarded as “buildings (bâtiments)” within the meaning of art. 376 C.C. and, therefore, “immovable by their nature.” In that case three things were distinctly held: (a) that the scope of the word “immovable” in art. 5730 (R.S.Q., 1909) is to be ascertained by reference to the provisions of the Civil Code, arts. 376 et seq: (b) that the word “buildings” (bâtiments) in art. 376 C.C. is used in the sense of “constructions”; (c) that it is immaterial to its taxability under art. 5730 that a construction is erected on land which does not belong to the person who owns the construction. There is no distinction in principle which would justify the taxation of the bridge in that case under art. 5730 as an immovable and warrant the exemption of the appellant’s gas mains, and electric poles and wires in the present case as movables. The materials of which the structures—bridge and distribution systems alike—were comprised were all movables before being placed in situ and made part of such structures. Once incorporated in the structures, however,

[Page 538]

the materials lost that character; and the structures themselves took on the character of immovables.

Nor does it appear to matter for the present purpose whether the immobilization of the pipes, poles and wires be attributed to their physical connection with the land in or upon which they are placed, or with the buildings from which they radiate as parts of a distribution system. In either view they are immovables actually (in the sense of physically) situated in the municipality and thus “come within the letter of the law” which confers the power to tax. Partington’s Case, (4 E. & I. App. 100). The immobilization of the transformers may not be so clear. But they are usually attached to the company’s poles and form an integral part of the system quite as much as the wires strung on the poles to carry the current.

While Anglin C.J. appears to have had some doubts as to the nature of the transformers, Lord Thankerton, in Bell Telephone Company of Canada v. Ville St-Laurent[4], explained the reason for their being immovable when he noted (at p. 82) that they “were firmly tied by wires and metal braces to the posts supporting the electric wires”. Also, the reasons of Anglin C.J. had been approved by the Privy Council in a previous decision (Montreal Light, Heat and Power Consolidated v. The City of Outremont[5], at p. 435).

In Landry, the distribution system which was said by Rinfret J.A., as he then was, speaking for the majority of the Court (at p. 666) to possess [TRANSLATION] “all the characteristics of something immovable by nature” was

[TRANSLATION] … composed of pillars or poles driven into the ground, linked by wires to which were attached the transformers, ties and other accessories located in the public streets, and which were merged to, form a single complete thing and a permanent structure that was an integral part of the land.

According to Rinfret J.A. (at p. 670), this system was [TRANSLATION] “a construction attached to the ground” and therefore [TRANSLATION] “an immovable in itself”:

[TRANSLATION] The system for distributing electric light in the village of Mont-Joli, which was sold by Landry to Rouleau Limitée, was therefore an immov-

[Page 539]

able at the time of that sale, and since it has always continued to adhere to the ground, it has remained an immovable until the present time. It did not cease to be an immovable because the poles, wires, transformers and attachments located on the streets of Mont-Joli have since been separated from the machines used to produce electricity … located … in and on the property of Rouleau Limitée and connected to the electric power generators belonging to appellant. From the point of view of the principles established above, this change could have no effect on the immovable nature of the system. According to the most widely held opinion, this system is an immovable in itself, as a construction adhering to the ground, and not only as forming an integral part of the electric generating plant.

A few years later, in Outremont, the Privy Council applied the same rules and held that appellant company’s gas pipes were immovable by nature. Lord Tomlin said (at p. 436):

What then is an “immoveable” under the Civil Code? A gas main laid in the earth is an “immoveable” in the sense that it is physically a construction fixed in the earth, though the individual pipes of which it is made up were movable before they came to form part of the construction.

Of the four means specified in art. 375 of the Civil Code by reason of which property is to be treated as “immoveable,” three can certainly be excluded. The gas mains are not “immoveable by destination,” because the soil in which they are placed does not belong to the appellants. They are not “immoveable” by reason of the object to which they are attached. Into that category fall only things in themselves movable which are permanently attached to an immovable. The gas mains were never movables, though constructed out of things which were movables. It is not suggested that the gas mains are immovable by determination of law. There, therefore, remains only the category of immovables by their nature. These are in s. 376 defined in the words, “lands and buildings are immoveable by their nature.”

It is said that gas mains are not buildings (“bâtiments”) within the meaning of that term as used in art. 376, and an argument based upon art. 523 of the Code Napoléon, which makes “tuyaux” immovables, was addressed to their Lordships in support of that view. Their Lordships are of opinion that the term buildings (“bâtiments”) covers constructions such as these gas mains, and that these mains must be regarded as immovable by their nature in the territory in which they

[Page 540]

are physically situate, and are therefore taxable subjects in the City of Outremont.

This was followed by the decision of the Privy Council in Ville Si-Laurent, in which the issue was whether a telephone switchboard was immovable by nature because it formed part of a distribution system made up of poles and cables. The Court of Appeal of the Province of Quebec[6] had concluded that the switchboard was immovable by nature of the reasons succinctly expressed in the following two paragraphs of the judgment of the Court (at p. 13):

[TRANSLATION] Whereas in the case at bar the telephone switchboard mentioned above does not form part of the building in which it is located and it was not placed there to complete the building, but as part of the telephone system, which is immovable; whereas the said switchboard is necessary to the operation of the system since it is connected to the cables, which are buried in the ground and belong to the telephone company;

Whereas the said switchboard is an integral and essential part of defendant company’s system, without which it would consist only of useless poles and cables, and the said switchboard, the poles and cables are necessary and essential to the existence of the said system.

The judgment of the Court of Appeal was reversed by the Privy Council. Lord Thankerton summarized the question at issue as follows (at p. 79):

Apart from the actual physical connecting up of the cables and wires, which are led on to the premises, with the switchboard and its equipment, the latter are not in any way attached, but merely rest on the floor of the premises. On detachment of the physical connection with the cables and wires, the switchboard and its equipment are easily removable, without injury to the premises. As already stated, the appellant is only a tenant of the premises.

Accordingly, the respondent’s claim is rested solely on art. 376 of the Code, and on the view that the switch-board is an integral part of that which is admittedly immovable.

[Page 541]

After he had made reference to the above-mentioned passages from the judgment of the Court of Appeal, Lord Thankerton continued (at p. 80):

The basis of this conclusion is expressed in the leading opinion, which was delivered by Bernier J., who states that it must now be taken as settled that the whole system—telephonic, telegraphic or similar systems of power transmission—constitutes an immovable. The learned judge cites, as authority for that proposition, three decisions to which their Lordships will shortly refer.

It appears to their Lordships that the above proposition clearly involves, as distinct from consideration of the physical nature of the attachment and whether it amounts to incorporation in the soil, consideration of the purpose which the attachment serves. It is agreed, and indeed it is stated in the first paragraph above quoted, that the physical attachment of the switchboard to the premises is insufficient to make it immovable by nature.

In Lord Thankerton’s opinion the decision of the Court of Appeal resulted from a misinterpretation of the decision in Westmount, Landry and Outremont. Referring to the reasons given by Anglin C.J. in Westmount, Lord Thankerton said (at p. 82):

…He clearly predicates that the materials must be physically incorporated as part of the structure which is itself incorporated in the soil. He clearly held that the wires and transformers were physically incorporated with the poles. The poles were in fact embedded in the soil, but the learned Chief Justice was also ready to regard the whole physical system of pipes, poles and wires as one incorporated physical structure.

Lord Thankerton expressed agreement with the above quoted comments of Rinfret J.A., as he then was, in Landry, and referred to the remarks of Lord Tomlin in Outremont, before concluding as follows (at pp. 83 and 84):

In their Lordship’s opinion, the existence of a building which is immovable by its nature under art. 376 involves two things—namely, that you have a structure and that such structure is incorporated with, or adherent to, the soil. In the present case, the switchboard with its equipment, admittedly, is not itself incorporated with, or adherent to, the soil. Is it then part of a structure which is so incorporated or adherent? As shown by the cases cited, it must be physically incorporated as part of the structure. The question whether the structure of which it

[Page 542]

is claimed to be part, is commercially able to operate without its assistance is irrelevant, in the opinion of their Lordships, and, apart from that suggestion, it is clearly incorrect to say that the switchboard is physically incorporated in the structure composed of poles, wires and cables belonging to the appellant’s undertaking.

Finally, there is the recent decision of this Court in Cablevision (Montreal) Inc. v. Deputy Minister of Revenue of the Province of Quebec[7], where it was held that appellant company’s cable distribution network was immovable by nature. Speaking for the Court, my brother Beetz J. outlined the significance of the decisions to which I have just referred, and pointed out that a distinction must be made between the question as to whether a collection of movables forms a “building” within the meaning of art. 376 C.C. on the one hand, and whether movable property becomes immovable by nature because it forms part of a “building” on the other. In the first case, according to Beetz J., “the criterion for being immovable by nature is met when a structure that may be described as a building adheres to something that is immovable by nature, whether land or a building, and thereby acquires a fixed foundation”. In the second case the criterion for being immovable by nature is really, as Beetz J. observes on the basis of Melocheville, whether the property in question is incorporated into the building “to the point of becoming an integral part thereof and of losing its independent existence because the building would be incomplete without it” (at p. 76).

It may therefore be said to be now established that a system for distributing electricity composed essentially of poles driven into the ground, and of wires and transformers, both physically attached to the poles to the point of being incorporated therein, is an immovable by nature because it adheres to the ground, and is therefore a construction or “building” within the meaning of art. 376 C.C., and not because it is connected to an electric generating plant of which it would in some sense be an extension. This latter possibility was undoubtedly mentioned by Anglin C.J. in Westmount, by Rinfret J.A., as he then was, in Landry, and by Beetz J. in Cablevision, but it certainly was

[Page 543]

not the reason for holding that a system for distributing electricity or a cable distribution network was immovable by nature.

When the issue is as to whether movable property forms part of a building to the point of partaking of its immovable nature, the test is that of physical incorporation. A movable does not become immovable by nature simply because it is essential to the destination of the building in which it is installed (Melocheville). It follows that in the case of a distribution system, a movable does not become immovable by nature simply because it is connected to this system or is necessary to its use. In a decision of May 4, 1937[8] the Cour de cassation repeated its statement of the previous year[9], and said:

[TRANSLATION] If electrical systems do in fact constitute major assemblies, it does not necessarily follow from this fact alone that their various parts must be considered as immovable or that their components be disconnected because, from a legal point of view, some are movable and others immovable;

In short, movables that become immovable by nature because they are part of an electrical distribution system are only those which are really incorporated into that system; the rules respecting these movables becoming immovable by nature are not different from those that apply for determining “to what extent an object is part of a building” (Cablevision at p. 76) which is an ordinary building.

Turning now to the facts of the case at bar, respondent’s electric power transforming stations constitute physical entities that are distinct from the transmission and distribution line, even though, as has been said, the latter could not operate without them. Each of these stations is a distinct plant, a distinct “building”, which is immovable by nature because it adheres to the land on which it is built and not because it is connected to a transmission system, which is itself

[Page 544]

another distinct “building”, also an immovable by nature.

Respondent’s equipment is above all an accessory, and in a way the machinery, of the transmission station in which it is located. We have seen that this machinery was not sufficiently integrated into the constructions or “buildings” in which it was installed to form an integral part of them and thereby become immovable by nature. I do not see how the same equipment could be said to be immovable by nature because it forms part of the transmission system. In my view, the equipment is even less integrated into the transmission system than into the transforming station in which it is located. To use the words of Lord Thankerton in Ville St-Laurent (at p. 84), it is not “physically incorporated in the structure composed of poles, wires and cables belonging to the appellant’s undertaking”.

Moreover, as we have seen, the fact that this equipment is necessary to the useful operation of the transmission system is not a factor that should be taken into consideration in deciding whether it is immovable by nature.

The second argument advanced by appellant against the judgment of the Court of Appeal therefore appears to me to be without foundation.

In conclusion, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Chapados, Chevalier & Gaul, Montreal.

Solicitors for the respondent: Boulanger, Gadbois & Legault, Montreal.