Supreme Court of Canada
Congrégation des Frères de l’Instruction Chrétienne v. Commissaires d’écoles (Grand’pré), [1977] 1 S.C.R. 429
Date: 1975-10-07
La Congrégation des Frères de l’Instruction Chrétienne, district Saint-Francois-Xavier, La Pointe-du-Lac Appellant;
and
The School Commissioners for the Municipality of Grand’pré Respondents.
1975: May 28; 1975: October 7.
Present: Ritchie, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC
Education law—Agreement not authorized by the Lieutenant-Governor in Council—Powers of school commissioners—Education Act, R.S.Q. 1941, c. 59, ss. 236, 238, 242.
Lease—Tacit renewal—Civil Code, art. 1609.
The Congregation had received from the Fabrique of Louiseville a school which needed to be enlarged. In 1949 respondents, the Commissioners, obtained a government grant of $200,000, payable in ten annual instalments, to construct a new building at a cost of approximately $300,000. For a nominal consideration of $1, the Congregation transferred to the Commissioners the land on which this building was to be erected and undertook to pay $100,000 on the loan of $300,000 contracted to pay for the building. In fact, the Commissioners served as nominees for the Congregation, because they had given it an option to re-purchase for $1 which it could exercise once the loan was repaid.
A fire occurred on December 13, 1954, and since the Congregation did not wish to rebuild the old building and the provincial government would not agree to give a further grant unless the Congregation transferred its assets to the Commissioners, the parties signed two deeds on March 21, 1955. The first was a transfer by the Congregation to the Commissioners of immovables and movables used for education in consideration of payment by the Commissioners of the $200,000 remaining due on the loan. The second deed was an agreement for five years fixing the terms on which education would be provided by the Congregation.
Fifteen years later, on June 16, 1970, the Congregation asked that both deeds be declared void and the Congregation held to be the owner of all property covered by the first deed. The Court of Appeal reversed the judgment of the Superior Court which had held the deeds void. Hence the first appeal to this Court.
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The second appeal is against the decision of the Court of Appeal which affirmed the judgment of the Superior Court condemning appellant to pay the Commissioners $16,000, namely the rental for the residence provided to members of the Congregation for the four-year period from 1966 to 1970.
Held: The appeals should be dismissed.
As the Superintendent of Education did not approve the second deed, the parties signed an agreement on December 19, 1955, recognizing that it was cancelled and rescinded and specifying that the first deed remained in effect. This stipulation disposes of the contention that the invalidity of the second deed extended to the first.
Section 238 of the Education Act should not be read as meaning that school commissioners cannot enter into any agreement without authorization from the Lieutenant‑Governor in Council. Section 236 provided, inter alia, that it was the duty of the school boards to acquire immovable property, land and so on. The only restriction imposed concerned acquisitions or constructions necessitating a loan. In the case at bar, the loan was contracted in 1949 and the necessary authorizations obtained at that time. The first deed, which concerned a transfer of land, therefore came under the jurisdiction of the Commissioners, as stipulated in s. 236.
Moreover, the Congregation received from the Commissioners everything promised it in consideration for the property which it transferred. It was the government which, after learning of the scheme used in 1949, required in 1955 that ownership be transferred to the Commissioners. This cannot be said to constitute an abuse of authority or an injustice. What would be unjust would be the result sought by the Congregation, since it would become the owner of buildings paid for with public money intended for the Commissioners and would recover all the property transferred without giving up what it has itself received in return.
With respect to the second appeal, the contention that the Commissioners, in undertaking to provide accommodation for the members of the Congregation, undertook to provide it on a gratuitous basis, is not persuasive. As the Congregation paid an annual rental of $4,000 until 1966, there was tacit renewal simply by virtue of continued occupation during the subsequent four years.
Hébert v. Les Commissaires d’écoles de St-Félicien (1921), 31 Que. Q.B. 458, aff’d 62 S.C.R. 174, followed; l’Alliance des Professeurs catholiques de Montréal v. Labour Relations Board, [1953] 2 S.C.R. 140; J.E. Verreault & Fils Ltée v. Attorney General of the Pro-
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vince of Quebec, [1977] 1 S.C.R. 41; Olivier v. Village de Wottonville, [1943] S.C.R. 118, referred to.
APPEALS from two decisions of the Court of Appeal of Quebec, the one reversing a judgment of the Superior Court, the other affirming a judgment of the same Court. Appeals dismissed with costs.
J. Vaillancourt, for the appellant.
Y. Godin and G. Lacoursière, for the respondents.
The judgment of the Court was delivered by
PIGEON J.—The Congrégation des Frères de l’Instruction Chrétienne, District St‑François‑Xavier, Pointe-du-Lac (the Congregation) is here appealing from two decisions of the Quebec Court of Appeal. The first reversed a judgment of the Superior Court which had declared void a deed of March 21, 1955, by which the Congregation transferred to the Louiseville School Commissioners (the Commissioners) all the immovables held by them, as well as all movables therein used for educational purposes. Respondents are the successors of the Commissioners as a result of a subsequent union of school commissions. The other decision affirmed a judgment of the Superior Court condemning the Congregation to pay the Commissioners the sum of $16,000 for rental of a residence, from 1966 to 1970.
An inspector’s report dated March 28, 1949 begins as follows:
[TRANSLATION] Louiseville County of Maskinongé École supérieure St‑Louis‑de‑Gonzague,—or—Collège des Frères de l’Instruction Chrétienne.
This institution was founded a little more than half a century ago by the Fabrique of the parish of St-Antoine de Rivière-du-Loup, now Louiseville.
In 1942 the Fabrique gave up all its rights and transferred the building and land to the Congregation of the Frères de l’Instruction Chrétienne. In that same year the school commission of the city of Louiseville signed an agreement with the Congregation, which required the latter to admit any boy from the city, from the fourth (4th) to the twelfth (12th) grade inclusive. The agreement was renewed in 1946, but due to a shortage of
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space the Congregation was not required to offer instruction past the tenth grade.
Following this report it was decided to construct a new building at a cost of about $300,000, and the Department of Education agreed to provide a grant of $200,000, payable in ten annual instalments of $20,000. However, such a grant could only be made to school commissioners, and in fact it was to the Commissioners that it was allocated. The latter accordingly acted as if they were building a school belonging to them. By a notarial deed dated May 30, 1949, and for a nominal consideration of $1, the Congregation transferred to the Commissioners the land on which the new building was to be erected, and, in a resolution forwarded to the Department, they stated this had been done. They also sent a copy of a notarial deed dated July 29, 1949, in which the Congregation, the party of the second part, assumed the following obligations to the Commissioners, the party of the first part:
[TRANSLATION] The party of the second part undertakes to pay the party of the first part, which accepts, the following amounts for construction of the aforesaid school, which shall belong to and remain the property of the party of the first part:
(a) a capital sum of $100,000, in five annual instalments of $20,000 each, from 1960 onwards, the whole in accordance with the deed of loan, and the schedule of repayment forming part of the said deed, which shall be executed between the party of the first part and the Caisse Populaire of Louiseville;
(b) accrued annual interest owing to the Caisse Populaire of Louiseville on the said loan of $300,000,…
The words I have underlined in this quotation will be noted. However, the actual agreement between the parties was that the Congregation would recover the land, with the building, as soon as the bonds issued to pay the cost of construction were repaid, the Commissioners having agreed in their first resolution to give the Congregation an option to re-purchase for $1. It is for this reason that in a notarial deed of July 28, 1949, the following clause is found:
[TRANSLATION] And when the bond issue of three hundred thousand dollars shall have been paid in full, the party of the first part undertakes to return to the
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Frères de l’Instruction Chrétienne the land on which the proposed school shall be built, and on which the party of the second part has an option to re-purchase.
On December 13, 1954 the old building was destroyed by fire. On February 12, 1955 the Congregation wrote the Commissioners a letter saying, inter alia:
[TRANSLATION] The heavy financial burdens imposed on us by the construction of our youth training houses prevent us from contemplating rebuilding at our own cost of the portion of our Louiseville College burned in the fire of December 13, 1954. We are therefore obliged to make the following proposals.
Our Congregation is prepared to transfer to the School Commission the real property, movables and immovables of the Pensionnat Saint-Louis-de-Gonzague, on condition that the School Commission assume our existing debts relating thereto, provide residential accommodation for one hundred and seventy-five boarders, and a residence for the Frères, by September 1956 at the latest, the whole fireproof, and that the financial and other obligations of forthcoming contracts be designed to further our educational endeavours.
The following notation is to be found in the Department of Education file on February 26, 1955:
[TRANSLATION] At a meeting with the Hon. Provincial Secretary, attended by Mr. Omer-Jules Desaulniers and Mr. Germain Caron, M.P. for Maskinongé, it was agreed that a further grant of $100,000 would be made to the School Commission of Louiseville, on condition that the Congregation transfer all its assets to the School Commission.
On March 21, 1955 the Congregation signed two notarial deeds with the Commissioners: the first, No. 4577, is a transfer by the Congregation of all its immovables at Louiseville, in addition to movables used for public education, such transfer being made in consideration of the payment by the Commissioners of the $200,000 remaining due on the bond issue of $300,000, and interest, with the following stipulation:
[TRANSLATION] IN CONSEQUENCE WHEREOF THE CONGREGATION and THE SCHOOL COMMISSION cancel and rescind for all legal purposes all prior agreements contrary thereto executed between them, and in particular a deed executed before Mr. J.H.M. Coutu, Notary, on July twenty-eight (28), one
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thousand nine hundred and forty-nine (1949), as No. 2839 of his minutes, and a further deed executed before the said Mr. J.H.M. Coutu, on July twenty-nine (29), one thousand nine hundred and forty-nine (1949), as No. 2841 of his minutes.
The second deed, No. 4578, is an agreement for five years fixing the terms on which education would henceforth be provided by the Congregation. Mention is made of the execution of the aforementioned deed of sale, and cancellation of all prior agreements.
The claims made in the action brought by the Congregation fifteen years later, on June 16, 1970, are that both deeds of March 21, 1955 be declared void and the Congregation held to be the owner of all the property covered by the first deed.
It is not necessary to examine the second deed at length. It was not approved by the Superintendent of Education and on December 19, 1955 the parties signed an agreement containing the following clause:
[TRANSLATION] 8.—That this agreement cancels and rescinds for all legal purposes all prior agreements and contracts contrary and pertaining thereto, executed between the same parties, and in particular, the agreement signed on March 21, 1955, before Mr. Jean-Paul Chevalier, N.P., as No. 4578 of his minutes, but excepting the deed of sale executed between the same parties on March 21, 1955.
In my opinion this stipulation, which is perfectly clear, disposes of the contention that the invalidity of the second deed extended to the first, which is the reason relied on by the trial judge in arriving at his conclusion, as follows:
[TRANSLATION] Section 238 of the Act read as follows:
With the authorization of the Lieutenant-Governor in Council, given upon the recommendation of the Superintendent, school boards may enter into agreements for school purposes with any person, institution, or corporation.
Looking at contracts P-1 and P-2, it can be seen that these two deeds are inter-related, and together make up the whole agreement concluded between the parties, which is the basis of this action; in other words, deed P-1 cannot be viewed as merely a contract for the sale of movables and immovables by plaintiff to the School
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Commission; the sale is one part of the agreement entered into by the parties in contract P-2; that agreement was for school purposes, and the evidence is that it was not authorized by the Lieutenant-Governor in Council.
It was correctly held by the Court of Appeal, relying on the decisions in Hébert v. Les Commissaires d’écoles de St-Félicien, that s. 238 should not be read as meaning that school commissioners cannot enter into any agreement without authorization from the Lieutenant‑Governor in Council. In that case Duff J. said (at p. 177):
I concur with the view of the Court of King’s Bench that the authority given by the third sub-section of art. 2723 R.S.Q. is not conditioned by art. 2724 in such fashion as to require the school authorities to obtain the sanction of the Lieutenant-Governor in Council before exercising it. Art. 2724 confers, in my opinion, supplementary powers.
In 1955, ss. 2723 and 2724 had become ss. 236 and 238 respectively of the Education Act. The interpretation given by the trial judge is thus in direct conflict with that given both by the Court of Appeal and by this Court in St-Félicien.
As this Court held in L’Alliance des Professeurs catholiques de Montréal v. Labour Relations Board, and as we have observed on a number of occasions, quite recently in J.E. Verreault & Fils Ltée v. Attorney General of the Province of Quebec, the maxim expressio unius est exclusio alterius is far from being an invariable rule. In the context of the Education Act, it is especially apparent that the maxim does not apply to s. 238. All that provision means is that commissioners or trustees may make agreements with the authorization of the Lieutenant‑Governor in Council given on the recommendation of the Superintendent; it does not say that without such authorization they may not do so. The intent of this rule cannot be to limit all the contractual powers conferred by other provisions, as this would mean that every hiring of a teacher or employee, and all purchasing, would
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require such authorization, which would be clearly absurd.
Accordingly Tremblay C.J.Q., delivering the unanimous opinion of the Court of Appeal in the case at bar, properly held that consideration should be given not to s. 238, but to s. 236 the relevant provisions of which read as follows in 1955:
236. It shall be the duty of the school boards in each municipality:
…
2. To acquire and hold for the corporation all movable or immoveable property, moneys or income, and to apply the same for the purposes for which they are intended;
3. To select and acquire the land necessary for school sites; to build, repair, and keep in order all school-houses and their dependencies; to purchase or repair school furniture; to lease temporarily or accept the gratuitous use of houses or other buildings, fulfilling the conditions required by the regulations of the committees, for the purpose of keeping school therein;
…
But if it necessitates a loan, no acquisition, construction or repair, mentioned in paragraph 2 or 3 of this section, may be carried out, unless the school corporation previously complies with the formalities of the law with respect to loans, and has negotiated a loan which it was authorized to make for such purposes.
I have stressed the word “previously” as counsel for the Congregation made much of the fact that this word was added by a statute of March 19, 1921 (1921 (Que.) c. 47, s. 11), that is after the decision of the Court of Appeal in St-Félicien, dated February 26, 1921, in which Allard J. had said (at p. 470):
[TRANSLATION] …Thus, if appellants borrow to meet the purchase price they must proceed under s. 2728, and must obtain an authorization of the Lieutenant-Governor in Council, and if they levy the taxes referred to in the said resolution, they will have to do so under s. 2747, and will not be required to obtain an authorization of the Lieutenant‑Governor, and there is nothing to prevent such taxation or loan being undertaken after the passing of the said resolution, if the terms of payment give them sufficient time to do so.
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In my view the argument is in error for several reasons. First, it must be observed that in the case at bar the loan of $300,000 was duly authorized by the Quebec Municipal Commission, the Minister of Municipal Affairs and the Provincial Secretary, on the recommendation of the Superintendent of Education, the last of these authorizations being given on December 14, 1949. The whole matter was carried out in accordance with s. 242 of the Education Act then in effect, the first paragraph of which then read as follows:
242. Any school corporation may also, with the authorization of the Provincial Secretary and the Minister of Municipal Affairs, Trade and Commerce and the recommendation of the Superintendent, borrow moneys and, for such purpose, issue bonds or debentures, but only in virtue and under the authority of a resolution indicating:
1. The objects for which the loan is to be contracted;
2. The total amount of the issue;
3. The term of the loan;
4. The maximum rate of interest that may be paid;
5. All other details relating to the issue and to the loan.
It will be noted that this section does not contain the word “previously”. This means that there is no basis for not applying the reasoning adopted in St-Félicien, since what is at issue here is not the validity of the loan, but the validity of the 1955 deed. I do not see how the Congregation can maintain that the Commissioners did not comply with the last paragraph of s. 236. In fact, they had obtained all the necessary authorizations before the end of 1949. They had therefore complied with all the provisions of the Act respecting loans well before the 1955 deed was executed. Further, the loan was repaid in full long before the proceedings were instituted.
Moreover, it should be borne in mind that the Congregation received from the Commissioners everything promised it in consideration for the property which it transferred. When the deed was signed, it owed some $200,000 which were still due on the cost of construction of the building put up in 1949 because it had contracted an obligation
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towards the contractor by signing the contract. Moreover, it had agreed to pay to the discharge of the Commissioners the $100,000 due over the $200,000 grant promised by the government. In addition, it knew that only a school commission could be entitled to such a grant. Fr. Armand Tassé, then the Provincial of the Congregation, stated in his testimony at the hearing:
[TRANSLATION] …we could not get the government grant because we were a religious community, and the School Commission agreed to act as our nominee…
The scheme having officially come to the attention of the government authorities in 1955, payment of the promised grant surely became uncertain. It was in this situation that the bargain was made on the terms dictated by the government. As mentioned, the latter agreed to pay the whole sum of $300,000, granting and additional $100,000; but in return, it required that full ownership be transferred to the Commissioners.
This cannot be said to constitute an abuse of authority or an injustice. The government quite properly wished to prevent a grant intended for a school commission being in fact used to pay the cost of constructing a building which the Congregation would own and the Commissioners would hold only as nominees of the Congregation. In the circumstances, there was no injustice in requiring that all the assets of the latter be transferred to the Commissioners since it kept over $100,000 in insurance money collected after the fire which destroyed the two old buildings given for nothing by the Fabrique in 1942 but not the building constructed in 1949.
What would be unjust would be the result sought by the Congregation. It would become the owner of buildings paid for with public money intended for the Commissioners. It would be recovering an area of land on which the latter has constructed large buildings worth more than a million dollars, after that land had been transferred to them by the Congregation in a deed signed by its authorized representatives. Moreover, the Congregation would thus recover all the property transferred by it, without giving up what it
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has itself received in return, namely the payment of its debt to the Commissioners. Even if an absolute nullity were involved, how could the Congregation be permitted to retain what it received under a bilateral contract without giving up what it received in return? Even those who are legally incapable of contracting are obliged in such circumstances to return any benefit obtained.
In his memorandum counsel for the Congregation referred to Olivier v. Village of Wottonville. This judgment was based on an Act which does not apply to school commissioners, and included a provision unlike anything presently before the Court. Moreover, the facts were different: what the Court held the contractor could not recover was the cost in excess of the authorized expenditure, whereas here all the expenditure was authorized.
In view of the foregoing, I refrain from considering whether what counsel for the Congregation called the “scheme” foisted on the public authorities in 1949 did not constitute a fraud, precluding the Congregation from pleading the nullity of the 1955 deed.
I must however say a few words concerning the second appeal. In 1963, when the Commissioners had built a residence for the members of the Congregation, the latter commenced paying a rental of $4,000 per annum, or $400 for each member housed, but it has refused to pay for four years, from 1966 to 1970. At the hearing, counsel raised two points against the judgment of the Superior Court, affirmed on appeal.
First, it was argued that in the agreement of December 19, 1955 the Commissioners had undertaken to provide accommodation for the members of the Congregation, which was said to mean to provide it on a gratuitous basis. This argument is untenable because the agreement in question was made for one year. It was of the nature of a contract for services. It was not binding on the parties indefinitely. Just as the remuneration paid to the members of the Congregation by the Commissioners was subsequently modified, the terms on which housing was provided for them were
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modified by mutual agreement after the construction of the residence.
The second argument is no more persuasive. It was contended that there was no proof of an agreement to pay rental for the years covered by the claim, only a resolution of the Commissioners setting the rental at $4,000. This is of no consequence: once it is admitted that in the preceding years a rental of $4,000 was agreed upon and in fact paid, it follows that in the subsequent years there was tacit renewal simply by virtue of continued occupation, in the absence of any other agreement (art. 1609 C.C.).
I think I should add that even if the Congregation had been successful on the first appeal, this would not have provided a ground of defence on the second, because the residence was built by the Commissioners. Assuming the Congregation were held to be owner of the land on which the building stands, this would not entitle it to repudiate the obligation to pay rental for occupation of the building during the years in question, under a duly executed or presumed lease.
On the whole, I conclude that the appeal should be dismissed with costs; such costs on the second appeal shall be limited to disbursements seeing that the two cases were heard concurrently.
Appeals dismissed with costs.
Solicitors for the appellant: Guy, Vaillancourt, Bertrand, Bourgeois & Laurent, Montreal.
Solicitors for the respondents: Godin, Lacoursière & Zonato, Trois-Rivières.
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