Canadian National Ry. Co. v. Bell Telephone Co. of Canada, [1939] SCR 308

Supreme Court of Canada

Canadian National Ry. Co. v. Bell Telephone Co. of Canada, [1939] S.C.R. 308

Date: 1939-05-12

Canadian National Railways Company Appellant;

and

The Bell Telephone Company of Canada and The Montreal Light, Heat and Power Consolidated Respondents.

1939: February. 2, 3; 1939: May 12.

Present: Duff C.J. and Rinfret, Crocket, Davis and Kerwin JJ.

ON APPEAL FROM THE BOARD OF RAILWAY COMMISSIONERS FOR CANADA

Railway—Board of Railway Commissioners—Works by railway company authorized by Board pursuant to special statute—Removal of plant and equipment belonging to utilities companies, necessitated by execution of these works—Allocation of costs of such removal by Board—Rule of practice by the Board in analogous cases—Rule applied by order of Board appealed from—Leave to appeal granted by Board—Questions of law—Jurisdiction of the Supreme Court of Canada—Section 52(3) of the Railway Act.

[Page 309]

Under the provisions of the Canadian National Montreal Terminals Act, 1929, the Governor in Council was authorized to “provide for the construction and completion by the Canadian National Railway Company * * * of terminal stations and offices” etc.; and, more particularly, of viaducts, elevated railways and grade separations between certain streets, mentioned in the Act, situated in the city of Montreal. By order of the 27th of June, 1929, the Governor General in Council provided for “certain terminal facilities, grade separation and other works” in the city of Montreal, as shown upon plans mentioned in the Order in Council; and for the execution of those works, orders of the Board of Railway Commissioners were required in respect of grade separation at street crossings. These orders were applied for by the appellant company and made. As the latter company proceeded with these works, the removal of plant and equipment of the respondents was found from time to time to be necessary; and orders to such effect were accordingly obtained from the Board, the question of the allocation of the costs involved in carrying out the orders being reserved for further consideration by the Board. By a subsequent order of the Board, now under appeal to this Court, it was directed that the appellant should “reimburse the respondents for their reasonable and necessary expenditure incurred and paid in the removal and replacement of their facilities” necessitated by reason of the construction of the works authorized by the several orders of the Board. Leave to appeal to this Court was given by the Board to the appellants in respect of certain questions (contained in full in the judgment now reported) which, in the opinion of the Board, “involve questions of law,” but the order did not state that these questions were “in the opinion of the Board * * * questions of law.”

Held, dismissing the appeal from the order of the Board of Railway Commissioners, that there is no rule or principle of law inconsistent with the findings and decisions of the Board to which the questions relate.

Held, also, that the questions submitted by the order of the Board were, ex facie, not questions of law.

On the assumption that the questions should be read in the following sense: Are the rulings of the Board to which the questions relate inconsistent with any rule of law by which the Board is bound as such?

According to the opinion of the majority of the Board, the works authorized by it, the execution of which necessitated the expenditures to be allocated, were incidental or subsidiary to the primary and controlling purpose of reconstituting the terminal facilities of the appellant; and accordingly, the majority of the Board held that, under a rule upon which the Board had habitually acted in the allocation of costs in analogous cases, such costs ought to be borne by the appellant company.

Held that the question whether the Board in a given case has properly appreciated its own rule of practice, or the consideration upon which that rule is based, cannot be a question of law within the meaning of section 52 (3) of the Railway Act, nor can the question, whether in a given case the Board has properly appreciated the facts for the purpose of applying the rule, be a question of law.

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APPEAL, by leave of the Board of Railway Commissioners, from an order made by the Board on May 19th, 1937, which directed the appellant to pay the respondents the expense incurred by them pursuant to orders of the Board in adjusting their telephone and electric light and power plant and equipment to certain works of grade separation carried out by the appellant under orders of the Board at the following street crossings in the city of Montreal: Mountain, Guy, St. Remi, Charlevoix and Hibernia. The appeal is on the following questions which in the opinion of the Board involved questions of law:

1. Whether the Board was right in holding that the effect of the Canadian National-Montreal Terminals Act, 1929, was to merge the whole question of grade separation in the general scheme for improvement and rearrangement of the railways’ terminal facilities in Montreal.

2. Whether there was evidence to justify the Board’s opinion and finding that the “protection, safety and convenience of the public” was not the paramount consideration for the works at the crossings in question, but that they were undertaken as part of a comprehensive scheme for the readjustment and improvement of the terminal facilities of the railway in the city of Montreal.

3. Whether there was evidence to justify the Board’s opinion and finding that the paramount purpose of the works at Guy, Mountain, St. Remi, Charlevoix and Hibernia street crossings was not the “protection, safety and convenience of the public” within the meaning of the rule as to the allocation of costs laid down in the case of Toronto v. Bell Telephone Company et al.[1], and other decisions of the Board.

I. C. Rand K.C. for appellant.

P. Beullac K.C. and N. A. Munnoch for the respondent The Bell Telephone Company of Canada.

H. Hansard for the respondent The Montreal Light, Heat & Power Consolidated.

The judgment of the Court was delivered by

The Chief Justice—This is an appeal by the Canadian National Railways Company by leave of the Board of Railway Commissioners from an order of the Board of

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the 19th of May, 1937, in respect of questions which the Board declares by its order, in the opinion of the Board, involve questions of law.

It is convenient, first of all, to state in a summary way the circumstances and the nature of the application upon which the order of the Board proceeded and the character of the questions raised by the controversy between the parties. By the Canadian National Montreal Terminals Act, 1929, the Governor in Council was authorized to

provide for the construction and completion by the Canadian National Railways Company (hereinafter called the Company) of terminal stations and offices, local stations, station grounds, yards, tracks, terminal facilities, power houses, pipes, wires and conduits for any purpose, bridges, viaducts, tunnels, subways, branch and connecting lines and tracks, buildings and structures of every description and for any purpose, and improvements, works, plants, apparatus and appliances for the movement, handling or convenient accommodation of every kind of traffic, also street and highway diversions and widenings, new streets and highways, subway and overhead streets, and also approaches, lanes, alleyways, and other means of passage, with the right to acquire or to take under the provisions of section nine of this Act or otherwise lands and interest in lands for all such purposes, all on the Island of Montreal in the Province of Quebec, or on the mainland adjacent thereto, as shown generally on the plan or plans thereof to be from time to time approved by the Governor in Council under the provisions of section seven of this Act; the whole being hereinafter referred to as “the said works,” and a short description whereof for the information of Parliament but not intended to be exhaustive, being set out in the schedule hereto.

Subsections (b), (d), (e) and (ƒ) of the schedule, with which the order of the Board is particularly concerned, are as follows:

(b) Viaduct and elevated railway between Inspector and Dalhousie Streets, and St. David’s Lane and Nazareth Street to near Wellington Street, and thence along Wellington Street to Point St. Charles Yard and Victoria Bridge, crossing over existing streets, and with connections to existing railway facilities and Harbour Commissioners’ trackage;

(d) Grade separation by means of elevated, or depressed, or underground tracks, or streets, as may be determined on the existing railway between Bonaventure and Turcot and connection to the viaduct referred to in paragraph (b);

(e) Grade separation by means of elevated, or depressed, or underground tracks, or streets, as may be determined between St. Henri and Point St. Charles;

(ƒ) Railway from Longue Pointe yard to the North west and thence Southwest to connect with the existing railway at and near Eastern Junction.

By section 3, the Company was authorized to issue securities in respect of the construction and completion of the works authorized on the guarantee of the Government of Canada to an amount not exceeding $50,000,000.

[Page 312]

By order of the 27th of June, 1929, the Governor General in Council provided, under the authority of this statute (which I shall refer to as the Terminals Act) for “certain terminal facilities, grade separation and other works” as shown upon plans mentioned in the Order in Council; and for the execution of those works orders of the Board of Railway Commissioners were required in respect of grade separation at street crossings. These were applied for by the Company and made.

As the Company proceeded with these works, the removal of plant and equipment of the respondents was found from time to time to be necessary; and orders to such effect were accordingly obtained from the Board. In each case the order provided that the question of the allocation of the costs involved in carrying out the order should be reserved for further consideration by the Board.

By the order now under appeal, it was directed that the appellants should

reimburse the respondents for their reasonable and necessary expenditure incurred and paid in the removal and replacement of their facilities

necessitated by reason of the construction of the works authorized by the several orders of the Board.

The question for determination by the Board was, of course, whether the costs with which this order deals should be borne by the appellants or wholly or in part by the respondents. And the general principle by which the Board conceived itself to be governed in determining that question is lucidly stated by the learned Chief Commissioner in the following passages from his judgment:

The general principle upon which the Board has acted for many years may be briefly stated as follows: When an application is made for grade separation by a railway company, or by a municipality, either for the greater convenience or facility of the applicant in the movement of traffic or for the rearrangement of streets and which may ultimately result in affording greater protection and safety to the public who use the crossing, the Board deems that the matter of greater convenience or improved facility to the applicant constitutes the main purpose of the application, and that improved crossing protection is merely incidental to the main purpose. In such cases where the removal of the plant and equipment of utility companies is ordered, the cost of such removal is placed upon the applicant. Upon the other hand, where the paramount reason for grade separation appears to be the protection, safety, and convenience of the public in the use of the crossing, and where the removal of the plant and equipment of utility companies becomes necessary, the Board has decided in many cases that under such circumstances the cost of removal and erection of equipment should

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be borne by the utility companies. While it is true that utility companies neither create nor aggravate the danger at grade crossings, nor do they benefit from grade separation, the Board has always considered that where the project is in reality pro bono publico, utility companies should bear the expense of moving their plant and equipment for the free use of streets enjoyed by them.

* * *

In my opinion the first question to be decided in regard to these applications is whether the work performed by the railway was essentially designed for the protection and convenience of the public at the various grade crossings in the city of Montreal which were affected by the general scheme, or whether the whole work was not one designed for the readjustment and improvement of the terminal facilities of the railway company in the city of Montreal. If the work was designed essentially for the purpose of grade crossing protection, in my opinion, following the authorities upon the subject and the general practice in such matters of this Board, the applicants cannot reasonably claim to be reimbursed for the cost of removal of their plant and equipment from the streets affected. They should each be called upon to contribute the cost of such removal for the purpose of granting protection and safety to the public at grade crossings. But, on the other hand, if the paramount purpose of the scheme authorized by the Act above referred to was the readjustment and improvement of the terminal facilities of the railway company in Montreal, the protection at grade crossings being only incidental to the general purpose, then I consider that, under the authorities and the practice of this Board, the railway company should pay the cost of the removal of plant and equipment as a part of the cost of the work authorized by Parliament.

The conclusion is stated as follows:

My view of the situation in regard to the questions which arise in the present applications is that the protection, safety and convenience of the public was not the paramount consideration which caused these works to be undertaken, but that they were undertaken, as stated in the judgment of the Privy Council, as a part of a comprehensive scheme for the readjustment and improvement of the terminal facilities of the railway in the city of Montreal. Any protection of railway crossings which might ultimately result from the carrying out of the work was purely incidental to the general scheme. It may have been to some extent a contributing factor but it certainly was not the paramount consideration.

I think the whole terminal scheme should be considered as a single definite project for the betterment of the railway terminal facilities in Montreal. The estimates submitted covered the whole undertaking. The whole work was to be financed by the railway under the provisions of the Terminals Act, save in respect of contributions which might be made as provided in sections 7 and 8 of the Act.

In my opinion each of the applicants is entitled to be reimbursed for its reasonable and necessary expenditure incurred and paid in the removal and replacement of its facilities pursuant to the orders made from time to time by the Board. I think the applicants are also entitled to be paid interest upon the various amounts expended by them from the date of such payments until the date of repayment at the rate of 3½ per cent per annum.

[Page 314]

The appeal, as already observed, comes before us in virtue of an order of the Board giving to the appellants leave to appeal in respect of certain questions which, in the opinion of the Board, “involve questions of law.” Before coming to an examination of the questions, it is convenient to advert to certain legal considerations.

The jurisdiction of the Board of Transport Commissioners in respect of the works provided for by the Terminals Act was settled by a judgment of the Judicial Committee of the Privy Council affirming a judgment of this Court in Bell Telephone Co. v. Canadian National Railways[2]. In that judgment the contention was rejected that the sections of the Railway Act dealing with highway crossings were displaced by the Terminals Act. Lord Macmillan, delivering the judgment of the Judicial Committee, said (at p. 573):

The fact of the matter is that the purpose of the Terminals Act was to give Parliamentary sanction to the scheme as a whole and to provide means for raising the necessary capital * * * These essentials being secured by the Act, everything else is left to be worked out by the already existing machinery available for the purpose.

The Board of Railway Commissioners is a statutory court, but it succeeded to all the powers, authorities and duties of its predecessor, the Railway Committee of the Privy Council; and it is endowed with legislative powers (powers which in their nature are legislative) as well as large administrative powers.

It having been decided by the judgment mentioned (Bell Telephone Co. v. Canadian National Railways2) that the works provided for by the Terminals Act and the subsequent Order in Council are subject to the jurisdiction and authority of the Board of Railway Commissioners, and particularly to the powers of the Board under sections 39, 256, 257, and 259, it follows, and this is not at all disputed, that the Board had jurisdiction under the second subsection of section 39 to deal with the subject of the allocation of costs in question before it.

As Lord Macmillan observed in delivering the judgment of the Privy Council in Canadian Pacific Railway v. Toronto Transportation Commission[3], section 39 is

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obviously an administrative provision. The whole passage is important and should be quoted verbatim:

Section 39 does not indicate any criterion by which it may be determined whether a person is interested in or affected by an order of the Railway Board. It does not even prescribe that the interest must be beneficial or that the affection must not be injurious. The topic has in a number of cases in the Canadian Courts been much discussed but inevitably little elucidated. Where the matter is left so much at large, practical considerations of common sense must be applied, especially in dealing with what is obviously an administrative provision.

These observations are concerned with the effect of the first paragraph of section 39, but they are also applicable to the second paragraph. It is equally true that the last mentioned paragraph affords no criterion or rule or canon by which the Board is to be guided in allocating costs. Its jurisdiction is restricted in two respects: first, where it is otherwise expressly provided the Board is not competent to act; and, second, orders under this subsection can only be made

on a company, municipality or person interested in or affected by the order directing the works

(Toronto v. Toronto[4]; Canadian Pacific Railway v. Toronto Transportation Commission[5]).

Subject to this, the Board is invested by the statute with jurisdiction and charged with responsibility in respect of such orders. The law dictates neither the order to be made in a given case nor the considerations by which the Board is to be guided in arriving at the conclusion that an order, or what order, is necessary or proper in a given case. True, it is the duty of all public bodies and others invested with statutory powers to act reasonably in the execution of them, but the policy of the statue is that, subject to the appeal to the Governor in Council under section 52, in exercising an administrative discretion entrusted to it, the Board itself is to be the final arbiter as to the order to be made.

Turning now to the questions in respect of which leave to appeal was given. The order is that the Canadian National Railways are

granted leave to appeal to the Supreme Court of Canada * * * upon the following questions which, in the opinion of the Board, involve questions of law, viz.:

[Page 316]

1. Whether the Board was right in holding that the effect of the Canadian National Montreal Terminals Act, 1929, was to merge the whole question of grade separation in the general scheme for improvement and rearrangement of the railway’s terminal facilities in Montreal.

2. Whether there was evidence to justify the Board’s opinion and finding that the “protection, safety and convenience of the public” was not the paramount consideration for the works at the crossings in question, but that they were undertaken as part of a comprehensive scheme for the readjustment and improvement of the terminal facilities of the railway in the city of Montreal.

3. Whether there was evidence to justify the Board’s opinion and finding that the paramount purpose of the works at Guy, Mountain, St. Remi, Charlevoix, and Hibernia Street crossings was not the “protection, safety and convenience of the public” within the meaning of the rule as to the allocation of costs laid down in the case of Toronto v. Bell Telephone Company et al.[6], and other decisions of the Board.

This order is made under the authority of section 52 (3) which is in these words:

3. An appeal shall also lie from the Board to such Court upon any question which in the opinion of the Board is a question of law, or a question of jurisdiction, or both, upon leave therefor having been first obtained from the Board * * * and after notice to the opposite party stating the grounds of appeal; and the granting of such leave shall be in the discretion of the Board.

It will be observed that the order does not state that the questions in respect of which leave to appeal is granted are questions of law in the opinion of the Board. The order declares that “they involve the questions of law.”

The phrase “question of law” which the Legislature has employed in this enactment is prima facie a technical phrase well understood by lawyers. So construed “question of law” would include (without attempting anything like an exhaustive definition which would be impossible) questions touching the scope, effect or application of a rule of law which the courts apply in determining the rights of parties; and by long usage, the term “question of law” has come to be applied to questions which, when arising at a trial by a judge and jury, would fall exclusively to the judge for determination; for example, questions touching the construction of documents and a great variety of others including questions whether, in respect of a particular issue of fact, there is any evidence upon which a jury could find the issue in favour of the party on whom rests the burden of proof. The determination of such a question seldom depends upon the application

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of any principle or rule of law, but upon the view of the judge as to the effect of the evidence adduced. Nevertheless, it falls within the category described by the phrase “question of law.” My own opinion is that, having regard to the provisions of section 44, the phrase “question of law” in section 52 does not embrace such questions: whether (that is to say) there is any evidence to support a given finding of fact. Section 44 is in these words:

In determining any question of fact, the Board shall not be concluded by the finding or judgment of any other court, in any suit, prosecution or proceeding involving the determination of such fact, but such finding or judgment shall, in proceedings before the Board, be prima facie evidence only.

2. The pendency of any suit, prosecution or proceeding, in any other court, involving questions of fact, shall not deprive the Board of jurisdiction to hear and determine the same questions of fact.

3. The finding or determination of the Board upon any question of fact within its jurisdiction shall be binding and conclusive.

The effect of this section is that where a question of fact is within the jurisdiction of the Board, then the determination of that question of fact by the Board is final and conclusive. I do not think it is consistent with this provision, according to its true intendment, that the determination, by the Board of an issue of fact within its jurisdiction should be susceptible of review on appeal to this Court, even by leave of the Board. The Board is not bound by the ordinary rules of evidence. In deciding upon questions of fact, it must inevitably draw upon its experience in respect of the matters in the vast number of cases which come before it as well as upon the experience of its technical advisers. Thus, the Board may be in a position in passing upon questions of fact in the course of dealing with, for example, an administrative matter, to act with a sure judgment on facts and circumstances which to a tribunal not possessing the Board’s equipment and advantages might yield only a vague or ambiguous impression.

The questions submitted by the order of the Board are, ex facie, not questions of law. The order stated that they involve questions of law but, as already observed, the questions of law are not defined. It may be, perhaps, admissible to read the questions in this sense: Are the rulings of the Board to which the questions relate inconsistent with any rule of law by which the Board is bound as such?

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Examining the questions from that aspect, it is necessary, in order to ascertain the effect of them to read them by the light of the reasons given by the learned Chief Commissioner with which Mr. Commissioner Stoneman agreed. Read by that light, it immediately becomes clear that they present phases of a single question: the question, namely, whether the principle explained by the Chief Commissioner, which the Board has, in analogous cases, applied in the allocation of costs, has been properly applied in this case.

As already pointed out, the basis of the conclusion at which the Board arrived was that the works authorized by the Board, the execution of which necessitated the expenditures to be allocated, were incidental or subsidiary to the primary and controlling purpose of reconstituting the terminal facilities of the appellants in Montreal for the purpose of modernizing and improving them. From this it followed, the Board held, that under the rule upon which the Board had habitually acted in the allocation of costs in analogous cases, such costs ought to be borne by the Railway Company.

It has already been observed that, while it is, no doubt, the duty of the Board of Railway Commissioners to act reasonably in discharging the responsibility involved in the exercise of its powers and not arbitrarily and capriciously, the Railway Act does not afford any rule or guide, nor does the law afford any rule or guide, by which the Board is or can be governed in determining what, in the circumstances of any particular case, is the reasonable order to make under subsection 2 of section 39 in respect of the allocation of costs. The Board itself has adopted a principle fully explained in the passages quoted from the judgment of the Chief Commissioner which it has followed in making orders as to costs where works ordered by the Board in connection with highway crossings have involved in their execution the removal of the plants of what are commonly known as public utility companies. It is entirely within the competence of the Board to lay down and follow such a rule of practice which, no doubt, it has found to be a just and reasonable rule. But such a rule of practice is not and cannot be a rule of law binding on the Board as such and precluding the Board from departing from it when experience shows that the rule

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fails to take into account some factor which has been overlooked, or has not hitherto emerged, or where special circumstances require such a departure. In truth, it is plain that the rule upon which the Board has proceeded is one which is incapable of precise definition; and the application of it necessarily, as the Board proceeds from case to case, may involve not only an appreciation of the facts but an appreciation of the considerations upon which the rule itself rests.

But the question whether the Board in a given case has properly appreciated its own rule of practice, or the considerations upon which that rule is based, cannot be a question of law within the meaning of section 52 (3); nor can the question whether in a given case the Board has properly appreciated the facts for the purpose of applying the rule be such a question. That is so because, to repeat what has already been said, there is no statutory rule and there is no rule of law that prescribes the considerations by which the Board is to be governed in exercising its administrative discretion under section 39(2). The consequences of the opposite view of the powers of this Court under section 52 may be illustrated by reference to subsection 6, which is in these words:

On the hearing of any appeal, the Court may draw all such inferences as are not inconsistent with the facts expressly found by the Board, and are necessary for determining the question of jurisdiction, or law, as the case may be, and shall certify its opinion to the Board, and the Board shall make an order in accordance with such opinion.

A negative answer to the questions before us would, apparently, in view of this enactment, have the practical effect of giving statutory force to the rule expounded by the Board in the case referred to in the third question. Obviously, the intention of Parliament was to charge the Board with responsibility in respect of this subject of allocation of costs, and there can be no ground for supposing that subsection 3 of section 52 was intended to make it possible to bring before this Court for determination as questions of law questions which, in pith and substance, are within the administrative discretion of the Board and in respect of which the Board, subject to the appeal to the Governor in Council, is charged by the Act with exclusive responsibility.

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The answer to these questions as a whole (read in the sense above explained) is, therefore, that there is no rule or principle of law inconsistent with the findings and decisions of the Board to which the questions relate.

It may not be improper to add this: There was in my opinion evidence before the Board upon which the findings of fact referred to in the questions could be based, although, as I have said, that is not, as I think, a matter which can be brought before this Court as a question of law under section 52 of the Railway Act.

The appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitor for the appellant: I. C. Rand.

Solicitors for the respondent The Bell Telephone Company of Canada: Beullac, Munnoch & Venue.

Solicitors for the respondent The Montreal Light, Heat & Power Consolidated: Brown, Montgomery & McMichael.