City of Toronto v. Prince, [1934] SCR 414

Supreme Court of Canada

City of Toronto v. Prince, [1934] S.C.R. 414

Date: 1934-02-06

The Corporation of the City of Toronto (Defendant) Appellant;

and

Elizabeth Lillian Prince and Whirlwind Carpet Cleaners, Ltd. (Plaintiffs) Respondents.

1933: November 27; 1934: February 6.

Present: Duff C.J. and Rinfret, Lamont, Smith and Hughes JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Municipal corporations—City by-law expropriating land for park purposes—Action against city for amount of compensation on an alleged agreement—Requirements to create binding contractual obligation on city—Necessity of further by-law—Municipal Act, R.S.O. 1927, c. 233, ss. 5, 9, 258 (1), 267 (1), 842, 851, 896 (45).

The appellant City, by its Council, passed a by-law, on November 2, 1931, enacting that certain described lands, which included land owned by P., respondent, of which the other respondent was tenant, “are hereby expropriated and taken for park purposes”. The city assessment commissioner wrote P. enclosing a copy of the by-law, and a correspondence ensued between the assessment commissioner and respondents’ solicitors as to compensation. The City Council, on December 14, 1931, passed a resolution adopting a report of the Board of Control recommending the adoption of a report submitted by the assessment commissioner as to agreement with P. as to compensation and possession and conveyance of the land; and this fact was communicated by the assessment commissioner to respondents’ solicitors. Early in 1932 the by-law of November 2, 1931, was repealed. Respondents sued the City for the amount of compensation as having been agreed upon and as owing by the City under a valid and binding contract.

Held: (1) Upon the actions of the City Council and the communications which took place, and even apart from the point of law next mentioned, the respondents had failed to prove that an agreement was concluded in fact.

(2) Assuming, contrary to this Court’s finding, that the Council acting on the City’s behalf did profess to assent to an agreement having the effect (alleged by respondents) that the City was to pay $25,000 as compensation for the expropriation of respondents’ part of the property described in said by-law, and that respondents were to execute and deliver a conveyance to the City together with vacant possession, a resolution of the Council, authorizing and embodying the terms of such an agreement, was not sufficient to bind the City in the circumstances; a by-law under the seal of the City was essential. Secs. 5, 9, 258 (1), 267 (1), 342 (1), (2), 351 (1), (2), 396 (45), of the Municipal Act, R.S.O. 1927, c. 233, particularly considered. Mackay v. City of Toronto, [1920] A.C. 208, at 210, 213, 214, cited.

The “expropriating by-law” of November 2, 1931, did not constitute in itself a sufficient compliance with the enactments of ss. 396 (45), 5, and 258 (1), so as to commit the City to take the property or to pay compensation. Reading s. 5 with s. 351, it sufficiently appears that, where the municipality is proceeding under its compulsory powers

[Page 415]

alone, the distinction between an “expropriating by-law” and a by-law which, in addition to being an “expropriating by-law,” authorizes entry upon the property or the making use of the property to be taken, is a practical distinction of great importance; where the initiating by‑law is an “expropriating by-law” simply (and, on its proper construction, the said by-law of November 2 was such), no act or proceeding on the part of the persons interested in the property can have the effect of binding the municipality to acquire the land (such a by-law has not the effect of a notice to treat under other systems of expropriation, e.g., under the provisions of the English Lands Clauses Consolidation Act, 1845); there must, in addition, be an “entry on” or use made of the property, as contemplated by s. 351, under the authority of by-law, or a further by-law adopting an award, or an agreement between the municipality and the parties interested settling the amount of compensation.

The “expropriating by-law” of November 2 did not operate to empower the Council to fasten upon the City an obligation to acquire the land, or to effect an acquisition thereof, by resolution alone, because (1) the magnitude of the compensation to be paid is so radical a matter and the settlement of it so important a step in the process of acquiring land under s. 396 (45) as to justify the conclusion that the authority to assent to such an agreement must proceed from a by-law enacted under that clause; to hold that a simple “expropriating by-law,” where there is no express or implied authority by by-law to settle the compensation, creates such authority by force of the statute, would postulate an intention out of harmony with that manifested by the enactments of s. 351; and (2) the power to settle compensation by agreement is one of those powers contemplated by s. 258 (1); the power to create a binding contractual obligation fixing the amount of compensation to be paid in circumstances such as in the present case, is clearly ejusdem generis with the power to acquire by purchase; a power which (ss. 396 (45), 5, 258 (1), of the Act; Mackay v. City of Toronto, supra) can only be executed by by-law.

Judgment of the Court of Appeal for Ontario, [1933] O.R., 442, reversed.

APPEAL by the defendant from the judgment of the Court of Appeal for Ontario[1] dismissing (by a majority) the defendant’s appeal from the judgment of Wright J.[2] holding that the plaintiffs were entitled to recover from the defendant the sum of $25,000, as being the amount agreed upon as compensation for land expropriated by the defendant. The plaintiff Mrs. Prince was owner, and the plaintiff Whirlwind Carpet Cleaners Ltd. was tenant, of the land in question. The material facts of the case are sufficiently stated in the judgment now reported, as are also the questions (indicated in the above headnote) arising for determination. The appeal was allowed, and the action dismissed, with costs throughout.

[Page 416]

C.M. Colquhoun K.C. and J.P. Kent for the appellant.

N. Sommerville K.C. and R. Bigelow for the respondents.

THE COURT: The primary facts in this appeal are not in dispute. On November 2nd, 1931, the appellant Corporation, by its Council, passed by-law No. 13405, entitled

A by-law to acquire certain lands for park purposes as an addition to Bickford Ravine.

On November 9th, the City Assessment Commissioner wrote to Mrs. Prince, enclosing a copy of the by-law, and informing her that the expropriated land included property owned by her, and asked her to advise him

the lowest amount you would be prepared to accept in full settlement for the conveyance to the City, free of all encumbrances, easements and other rights whatsoever of the property expropriated, as above described, vacant possession to be given to the City, free of any tenancies, upon the payment of the compensation.

A correspondence ensued which sufficiently appears from the discussion which follows.

On the 18th December, the Commissioner of Parks and the Assessment Commissioner were requested to appear before the Board of Control to explain why it was necessary to acquire additional lands for the improvement of Bickford Ravine Park property. At the first regular meeting of the City Council for the year 1932 the “expropriating by-law” was repealed. After this repeal the respondents brought this action and claimed that the passing of the by-law and the resolution of the City Council adopting a report of the Assessment Commissioner fixing the amount of the compensation to be paid, constituted a valid and binding contract between the appellant Corporation and the respondents. On the other hand, the Corporation contends that there was no binding agreement in fact, and could be none in point of law until the Corporation, by by-law, had expressed its willingness to take the property and pay the compensation agreed upon; conditions admittedly not fulfilled.

The trial judge gave judgment in favour of the respondents for $25,000[3], holding that an enforceable contract had been entered into. On appeal, this was affirmed by the Ontario Court of Appeal (Latchford C.J.A. and Magee J.A. dissenting)[4].

[Page 417]

The first question is the question whether, in point of fact, the parties entered into an agreement fixing the compensation. The respondents rely upon the resolution of the Council, already adverted to, as evidencing such an agreement. The resolution adopts the following report of the Board of Control and was passed 14th December, 1931:

The Board recommend the adoption of the appended report submitted by the Assessment Commissioner, re the above, viz:

Mrs. Elizabeth L. Prince is the owner of premises No. 779 Bloor Street West, the land having a frontage of 20 feet by a depth of 120 feet, upon which is erected two storey brick buildings. She also owns a parcel of land in rear of No. 781 Bloor Street West, having a frontage on Montrose Avenue of 50 feet by a depth of 20 feet, the property being occupied for business purposes by The Whirlwind Carpet Cleaners Limited. This property was expropriated as an addition to Bickford Ravine by By-law No. 13405, passed by Council on November 2nd last.

I have arranged with Mrs. Elizabeth L. Prince, subject to the approval of your Board and Council, through her solicitors, Norman Sommerville & Company, a settlement of the compensation and the amount agreed upon is $25,000 in full of all claims, which includes business disturbance and the moving of plant and equipment, the owner to be allowed occupation of the property until April 15th, 1932, upon which date the City is to receive vacant possession. I therefore recommend that the City Solicitor be instructed to pay to Mrs. Elizabeth L. Prince, or whomever he may find to be entitled to receive it, the sum of $25,000 upon the receipt of which the property in question, as above described, is to be conveyed to the City, free from all encumbrance, easements and other rights whatsoever, vacant possession to be given to the City, free of any tenancies, upon payment of the compensation.

The property in question is assessed for the sum of $5,400.

CERTIFIED a true copy of an extract of Report No. 29 of the Board of Control adopted in Council 14th day of December, 1931.

There are several points raised on behalf of the Corporation, in connection with this resolution, which must be examined. The duties of the Assessment Commissioner, on whose report the resolution proceeded, are set forth in a by-law relating to the officials of the Corporation, passed in 1904, of which the pertinent provisions are these:

31. In addition to all duties imposed upon the Assessment Commissioner under any Act or Statute, or under any By-law of the Corporation, the said Assessment Commissioner shall perform the following duties and be subject to the following regulations:—

1. To have charge of the renting and leasing of all properties belonging to the Corporation, except as otherwise provided (B.4597, sec. 2), and to carry on all necessary negotiations in connection therewith, and to advertise the said properties, with the approval of the Chairman of the Committee on Property; to advise on the rentals to be received, and, if a sale or purchase by the Corporation is proposed, to advise on the price to be received or paid, as the case may be, and make such recommendation in respect of the proposed transaction as he may deem advisable, and to advise as to the laying out and handling of the Corporation

[Page 418]

property to the best advantage; no final disposition of any property, except properties bought in by the Corporation at sales of lands for taxes, is to be made except upon the report of the Committee on Property, adopted by Board of Control and Council, in accordance with the by-laws of the Council;

It will be observed that the duties so described are in addition to duties imposed upon the Commissioner under any Act or statute or any by-law of the Corporation. The Commissioner, therefore, obviously had no authority to enter into an agreement on behalf of the Corporation determining the amount of compensation payable in respect of land expropriated under a municipal by-law. Nor had the Council any power to confer such authority upon him by resolution. Moreover, when the correspondence between the Commissioner and the solicitors for the respondent is examined, the material parts of which are set out in paragraphs 4, 5 and 6 of the statement of claim, it will be seen that the Commissioner is not professing on behalf of the Corporation to enter into an agreement with the respondents settling the compensation to be paid for the property in question or for the purchase of the property. On the one hand, the Commissioner is notified of the amount of the compensation that the respondents will accept and the terms under which the property and possession of it will be handed over to the City; and, on the other hand, the Commissioner advises the respondents that he will recommend the payment of the amount of compensation named by them, and the terms also upon which the payment is to be made and the property is to be taken over.

When the Commissioner, in his report, speaks of having arranged a settlement of the compensation, and says that the amount agreed upon is $25,000 in full of all claims, etc., it is not fair to read his report as a statement that he has entered into an agreement in the legal sense on behalf of the Corporation, even subject to the approval of the Council. The fairer construction is that, as the correspondence shews, the respondents have declared their willingness to accept the sum of $25,000, and that the Commissioner had informed them he would recommend to the proper authority the payment of that sum upon the terms set forth by him. (See per Parker J. in Pollard v. County Council of Middlesex[5]). Then, in fact, the respondents had not expressed

[Page 419]

their assent, or their willingness to agree, to the terms stated in the report. The respondents’ express proposal was that they should retain possession for three months after the payment of compensation. The proposal in the report is that the respondents shall retain possession until the 15th of April and that on the delivery up of vacant possession on that date, and the delivery of a conveyance, the compensation shall be paid.

It is impossible to regard the resolution as the acceptance of an offer to enter into an agreement made by the respondents to the Corporation settling the compensation; because, if the letter of the respondents can properly be construed as such an offer, the resolution is most assuredly not an acceptance of it. Nor can the resolution properly be regarded as a ratification of an agreement in the legal sense between the Assessment Commissioner, on behalf of the Corporation, and the respondents, for the settlement of compensation because: first, the correspondence shews that the Assessment Commissioner was not professing to enter into any such agreement, or into any agreement on behalf of the Corporation, which, moreover, would have been entirely outside his functions; and, on a fair reading, his report ought not to be construed as stating he had made such an agreement; and, in the second place, in point of fact, there had been no assent by the parties to common terms.

Then, the respondents rely upon the communication made by the Assessment Commissioner to them of the terms of this resolution. Now, the Assessment Commissioner had no general authority to make a communication to the respondents of either a binding acceptance by the Corporation of an offer made by the respondents, or of a binding offer on behalf of the Corporation to the respondents of a settlement of compensation upon the terms of the resolution. If the Assessment Commissioner’s letter was intended by him to operate in either of these characters, he was exceeding his duty. The letter cannot properly be treated as a communication made by the Corporation in either of these senses, nor was it a communication authorized by the Council. The resolution declares that the Board recommends the adoption of the appended report. The only recommendation made by the report is

[Page 420]

that the City Solicitor be instructed to pay to Mrs. Elizabeth L. Prince, or whomever he may find to be entitled to receive it, the sum of $25,000 upon the receipt of which the property in question, as above described, is to be conveyed to the City, free from all encumbrance, easements and other rights whatsoever, vacant possession to be given to the City, free of any tenancies, upon payment of the compensation.

The resolution itself gives the City Solicitor authority to act upon it by doing certain specified acts; the payment of $25,000 to the respondents or “whomever he may find to be entitled to receive it”, upon the receipt of which the property is to be conveyed to the Corporation and possession delivered up on the 15th of April. It is plain the 15th of April is fixed as the date of taking possession and that upon the delivery of a conveyance by all the parties interested and of possession, the compensation is to be paid.

The resolution does not in terms authorize the City Solicitor to enter into an agreement with respondents nor does it in terms express an intention to enter into such an agreement. He is to pay the compensation to the persons who may be entitled to it. Contemporaneously with payment, the property is to be conveyed and delivered to the Corporation by, of course, those who are interested in it.

Then, if the resolution of the Council could be considered as authorizing the communication of an offer to settle the compensation, or to purchase the property on the terms stated, that offer was never communicated by the Corporation to the respondents.

The City Solicitor did not communicate the resolution to the respondents or any notice of an intention of the Corporation to enter into an agreement for acquiring the property or for the settlement of compensation. His letter of the 4th of January states explicitly that the matter is under consideration by the Board of Control and his letter of the 15th of January states that the Board of Control has made a recommendation to the Council. Both of these communications are incompatible with the notion that he is communicating an unconditional offer to acquire the property.

Moreover, if we could assume that the resolution authorized the communication to the respondents of an offer of an agreement to purchase or to settle the compensation,

[Page 421]

and if we could assume further that such communication had taken place, we should still be confronted with the letters of the respondents’ solicitors of the 31st of December and the 13th of January. In the first of these letters the respondents state that there was an agreement between the Assessment Commissioner and the respondent that the Corporation should pay $25,000; that this agreement was approved by the Board of Control and adopted by the Council on the 14th of December, 1931.

On this date the property had been expropriated, the price had been fixed, the contract had been confirmed by both parties and the sum of $25,000 is therefore due and owing to Elizabeth L. Prince and The Whirlwind Carpet Cleaners, Limited.

On behalf of both of these parties, for whom we act, we now request you to pay the sum of $25,000, according to the terms of the contract.

It is quite clear that the respondents did not treat the resolution as the offer of an agreement but as the confirmation of an agreement already assented to. The resolution, if communicated as an offer, was plainly not accepted. The respondents declare that they are entitled to be paid $25,000 under an agreement already completed and upon terms different from those contained in the resolution. In other words, if an offer had been communicated, it was met by a counter offer, which was never accepted by the Council.

The letter of the 13th of January is almost equally significant. Referring to an opinion of the City Solicitor reported in the newspapers that there was no binding agreement because there was no communication of the Corporation of an intention to purchase the lands, the letter says:

We again repeat our request that a cheque for the amount of the compensation be sent us forthwith.

Here again the respondents are not treating the resolution as an offer but take their stand on the position that they are entitled to something different from anything sanctioned by the resolution under an agreement already concluded. The letter of the City Solicitor of January 15, 1932, as we have mentioned above, apprises the respondents of the fact that “The Board of Control has made a recommendation to the Council” and that nothing further can be done “until the Council deals with such report”. In view of all the circumstances, the letter of the 18th of January, which is not a little ambiguous, cannot be treated

[Page 422]

as a valid acceptance of an offer still open. If there was communication of an offer in terms of the resolution, that, we repeat, had been met by a counter offer which had never been accepted, in other words, by a rejection, and the original offer was no longer open. It is, perhaps, worth noting that the letter of the 18th of January was only written after the respondents had been informed that the Council was reconsidering the matter.

In a letter of January 25th, 1932, the respondents’ solicitors still assert:

The City is now indebted to our clients in the sum of $25,000 for the property thus expropriated.

The action was brought and the statement of claim delivered before the 15th of April, the date fixed by the resolution for payment. The claim of the respondents in the pleading is free from doubt. In par. 8 they aver that, on

the 31st day of December, 1931, the plaintiffs, through their solicitors, having executed and completed a deed of the said lands, and a release of all claims against the said Corporation, delivered the said deed and release to the Corporation of the City of Toronto, and did complete in all respects the said transaction and agreement and requested the payment of the said sum of $25,000 according to the terms of the said agreement.

This letter of the 31st of December, as already observed, in unambiguous terms makes a request for immediate payment, and declares that, under the contract between the parties, “the sum of $25,000 is * * * due and owing” to the respondents; and proceeds, “we now request you to pay the sum of $25,000, according to the terms of the contract.”

In par. 12 it is alleged that “an agreement was duly made for the payment of the sum of $25,000 as the purchase price for the said lands;” that the plaintiffs accepted and adopted the same and acted thereon and “that the said Corporation cannot now rescind or revoke the said contract.” In the same paragraph they allege that “compensation * * * was duly fixed, and that the same is now due and payable by the defendant to the plaintiffs.” The respondents, it will be noticed, do not by their pleadings advance a claim to payment on the ground that the appellant has repudiated an agreement to be performed by payment in April. They claim, consistently with the letters quoted, that, under the terms of an agreement between the Corporation and themselves, they had become entitled to

[Page 423]

the payment of compensation before the commencement of the action—as early as the 31st of December, 1931.

The respondents, we think, have failed to prove that an agreement was concluded in fact. This alone would suffice to dispose of the appeal; but we think it right to discuss the questions raised by the judgments in the Ontario courts.

The ground upon which the majority of the Court of Appeal affirmed the judgment of the trial judge was that the expropriating by-law

connotes an offer by the Corporation of Toronto to take the property at a price to be ascertained. Before that offer was withdrawn and while it was in full force it was accepted by the owner and by such acceptance there arose a completed contract valid in law; for on the part of Toronto it was supported by a by-law under the seal of the corporation. The contractual obligation arose on the acceptance of the offer.

In England, when the value of the land taken under compulsory powers has been fixed by an assessment tribunal in conformity with the requirements of the Lands Clauses Consolidation Act, 1845, or has been agreed upon, there is a final and completed contract and either party may maintain an action for specific performance of the contract. This right of action exists because, under the English statute, upon giving notice to treat, the rights of the parties are at once fixed. The notice gives the owner a right to insist upon the company taking that which it has given a notice of its intention to take. “Neither party can get rid of the obligation, the one to take, the other to give up.” (Kindersley, V.C., in Haynes v. Haynes[6]).

The relevant statutory provisions are in the Ontario Municipal Act (R.S.O. 1927, c. 233). Sections 5, 9, 258 (1), 267 (1), 342 (1) and (2), 351 (1) and (2) and 396 (45) are as follows:

5. Where power to acquire land is conferred upon a municipal corporation by this or any other Act, unless otherwise expressly provided, it shall include the power to acquire by purchase or otherwise and to enter on and expropriate.

9. The powers of a municipal corporation shall be exercised by its council.

258. (1) Except where otherwise provided, the jurisdiction of every council shall be confined to the municipality which it represents and its powers shall be exercised by by‑law.

267. (1) Every by-law shall be under the seal of the corporation, and shall be signed by the head of the council, or by the presiding officer at the meeting at which the by-law was passed, and by the clerk.

[Page 424]

342: (1) Where land is expropriated for the purposes of a corporation, or is injuriously affected by the exercise of any of the powers of a corporation under the authority of this Act or under the authority of any general or special Act, unless it is otherwise expressly provided by such general or special Act, the corporation shall make due compensation to the owner for the land expropriated and for any damage necessarily resulting from the expropriation of the land, or where land is injuriously affected by the exercise of such powers for the damages necessarily resulting therefrom, beyond any advantage which the owner may derive from any work, for the purposes of, or in connection with which the land is injuriously affected.

(2) The amount of the compensation, if not mutually agreed upon, shall be determined by arbitration.

351. (1) Where the arbitration is as to compensation, if the expropriating by-law did not authorize or profess to authorize any entry on or use to be made of the land before the award, except for the purpose of survey, or if the by-law gave or professed to give such authority, but the arbitrator by his award finds that it was not acted upon, the award shall not be binding on the corporation, unless it is adopted by by-law, within three months after the making of the award, or after the determination of any appeal therefrom, and if it is not so adopted, the expropriating by-law shall be deemed to be repealed, and the corporation shall pay the costs between solicitor and client of the reference and award, and shall also pay to the owner the damages, if any, sustained by him in consequence of the passing of the by-law, and such damages if not mutually agreed upon shall be determined by arbitration and if the by-law has been registered or a caution in respect of it has been filed the corporation shall forthwith cause a certificate signed by the mayor and clerk and sealed with the corporation’s seal, stating that the by-law stands repealed, to be registered in the proper registry office or the caution to be removed as the case may be.

(2) Subject to the provisions of subsection 3, where the expropriating by-law did not authorize or profess to authorize any entry on or use to be made of the land except for the purpose of survey, or if the by-law gave or professed to give such authority but it has not been acted on, the council may at any time before the making of the award, and whether or not arbitration proceedings have been begun, repeal the by-law, and if that is done the repealing by-law shall, if the expropriating by-law has been registered, be forthwith registered by the corporation in the proper registry office, or if the land is under The Land Titles Act and a caution has been filed, the corporation shall forthwith remove the caution and the costs and damages mentioned in subsection 1 shall be paid by the corporation as therein provided.

396. By-laws may be passed by the councils of all municipalities:

45. For acquiring land for and establishing and laying out public parks * * *

The precise question raised by the judgments in the court below on this phase of the case is this: Assuming, contrary to the conclusion at which we have clearly arrived, as already explained, that the Council acting on behalf of the appellants did profess to assent to an agreement having the effect alleged by the respondents, viz., that the

[Page 425]

appellant corporation was to pay $25,000 as compensation for the expropriation of the respondents’ part of the property described in the expropriation by-law, and that the parties interested were to execute and deliver a conveyance of that part to the appellant Corporation together with vacant possession: is a resolution of the Council, authorizing and embodying the terms of such an agreement, sufficient to bind the appellant Corporation in the circumstances, or is a by-law under the seal of the Corporation, essential?

In considering this question, it is necessary to scrutinize with some care the statutory provisions governing the appellant Corporation now reproduced textually. First of all, the Corporation is given the express power by s. 396 (45) for acquiring land “for * * * public parks”; and this power, specifically given, is to be exercised by by-law. The effect of the phrase “acquiring land” in s. 396 (45) is set forth in s. 5 in these words:

5. Where power to acquire land is conferred upon a municipal corporation by this or any other Act, unless otherwise expressly provided, it shall include the power to acquire by purchase or otherwise and to enter on and expropriate.

The words “by purchase or otherwise” would appear to be used in contradistinction to the phrase “enter on and expropriate,” and the words probably extend to every acquisition by voluntary transaction.

There is specific authority by statute vested in the Corporation, therefore, “for acquiring land for * * * public parks” (s. 396 (45)) and, in acting upon this specific authority, the Corporation is expressly empowered “to acquire by purchase or otherwise and to enter on and expropriate” (s. 5).

Then there is the important enactment of s. 258 (1):

Except where otherwise provided, the jurisdiction of every council shall be confined to the municipality which it represents and its powers shall be exercised by by-law.

Ex facie, these provisions of the Municipal Act seem to contemplate that when a municipal corporation, executing the authority given by s. 396 (45), acquires land for the purposes of a public park, whether “by purchase or otherwise,” that is to say, by voluntary transaction, or in pursuance of its right “to enter on and expropriate,” the corporation will proceed by by-law. Land may be acquired for such a purpose by voluntary transaction or the Corpora-

[Page 426]

tion may “enter on and expropriate.” In either case, it must, the statute seems to say, proceed by by-law, unless there is some provision to the contrary.

In the words of Lord Haldane, in delivering the judgment of the Judicial Committee in Mackay v. City of Toronto[7], the enactment of s. 258⁷ constitutes a “prohibition imposed by the Municipal Act” against “the exercise of its distinctive powers otherwise than by by-law under seal.” Indeed, Lord Haldane’s judgment (at pp. 210, 213 and 214) seems to be a sufficient basis for this proposition: that the execution of the specific authority created by s. 396 (45) can only be effectually accomplished by by-law.

By s. 10 of the Act the powers of a municipal corporation are to be exercised by the council. By s. 249, except where otherwise provided, the jurisdiction of every council is to be confined to the municipality which it represents, and its powers are to be exercised by by-law. By s. 258 [now s. 267] every by-law is to be under the seal of the corporation, and is to be signed by the head of the council, or by the presiding officer at the meeting at which the by-law is passed, and by the clerk.

* * *

* * * this corporation is not the creature of charter and as such endowed with capacity by the common law, but it is the pure creation of a statute. It may be that the effect of the Interpretation Act of Ontario (R.S. Ont., c. 1, s. 27), which gives to every corporation the power to contract, makes this power a general feature of its statutory equipment. But the section cannot affect the prohibition imposed by the Municipal Act of the exercise of its distinctive powers otherwise than by by-law under seal. Their Lordships do not desire to be understood as saying that the powers referred to in the context are to be taken as covering the whole field of the capacity of such a corporation to contract. It can hardly have been intended by the Legislature that, for example, notepaper cannot be bought for daily use except by a special by-law under seal; it may well be that the power to engage a servant is not a power ejusdem generis with the powers with which the Municipal Act is dealing when it imposes restrictions on their exercise.

* * *

The decision of the Supreme Court of Canada in Waterous Engine Works Co. v. Corporation of Palmerston[8] was cited at the bar, and their Lordships were invited to prefer the dissenting judgment of Gwynne J. to those of the other learned judges who took part in that decision. There a municipal corporation was given express power under the then Ontario Municipal Act to purchase fire apparatus. The Act provided that all the powers of the council should be exercised by by-law unless (which was not done by the Act) the exercise of a special power was otherwise expressly authorized or provided for. The defendant corporation contracted with the appellants for the purchase of a fire engine and 550 feet of hose. No by-law was passed sanctioning the purchase. It was held by a majority in the Supreme Court, consisting of Strong, Taschereau and Patterson JJ., that this contract was not enforceable in the absence

[Page 427]

of a by-law. As the power to purchase fire apparatus was one of the powers expressly conferred by the Act, this appears to have been right.

These pronouncements of the Judicial Committee would appear to make it unnecessary to consider the distinction dwelt upon in the judgment of the majority of the Court of Appeal between “legislative powers,” so-called, and “administrative powers.”

The view taken by the Court of Appeal appears to have been that the “expropriating by-law” of the 2nd November, 1931, constituted a sufficient compliance with the enactments of s. 396 (45), s. 5 and s. 258 (1). The by-law is in these words:

No. 13405. A BY-LAW

To acquire certain lands for park purposes as an addition to Bickford Ravine.

                                                                                  (Passed November 2nd, 1931).

WHEREAS by Report No. 14 of the Committee on Parks and Exhibition, adopted in Council October 5th, 1931, it was recommended that the lands hereinafter described be acquired for park purposes, as an addition to Bickford Ravine:—

Therefore the Council of the Corporation of the City of Toronto enacts as follows:—

                                                                                 I.

The lands described by Tracy D. LeMay, Esquire, City Surveyor, as follows, namely:—

All and singular that certain parcel or tract of land and premises situate, lying and being in the City of Toronto, in the County of York and Province of Ontario, being composed of the westerly forty feet (40’) of Lot No. 43, according to a plan filed in the Registry Office for the Registry Division of Toronto, as No. 1223

are hereby expropriated and taken for park purposes.

In the sections of the statute quoted above, a distinction is patently recognized between the procedure which is described by the verb “expropriate” and that which is described by the phrase “enter on.”

Reading s. 5 with s. 351, it sufficiently appears that, where the municipality is proceeding under its compulsory powers alone, the distinction between an “expropriating by-law” and a by-law which, in addition to being an “expropriating by-law,” authorizes entry upon the property or the making use of the property to be taken, is a practical distinction of great importance.

The “expropriating by-law,” no doubt, may be registered, and the registration of it may affect the powers of disposition possessed by those interested, in the sense that anybody purchasing must purchase subject to the muni-

[Page 428]

cipality’s right to acquire the property compulsorily, on the footing of paying compensation as of the date of the by-law, or, at least, as of the date of the registration. But an “expropriating by-law” in the sense in which the words are used in s. 351, does not, in itself, commit the municipality to take the property or to pay compensation for it. We assume that, in such a case, the parties interested may insist upon arbitration, but, unless, under the authority of by‑law, the Corporation has entered on or made use of the property in the sense of s. 351, then the “expropriating by-law” can be repealed at any time before the award is made (s. 351 (2)); and even when an award has been pronounced, the corporation is not bound to acquire the property, or to pay compensation on the footing of having acquired it, except by force of a by-law accepting and adopting the award. A by-law which, in the sense mentioned, is simply an “expropriating by-law” not only is not, in itself, an acquisition of the property; does not, in itself, authorize such an acquisition on the terms set forth in an award, in the absence of a fresh by‑law adopting such award. Such a by-law, therefore, has not the effect of a notice to treat under other systems of expropriation, under the provisions of the Lands Clauses Consolidation Act, for example; and one may incur some risk of misleading oneself, if one resort to supposed analogies in proceedings under other statutes, and in decisions in respect of such proceedings, for the purpose of ascertaining the rights of the parties, under the compulsory clauses of the Municipal Act.

Where the Corporation proceeds under its compulsory powers alone, and the initiating by-law is an “expropriating by-law” simply, no act or proceeding on the part of the persons interested in the property can have the effect of binding the corporation to acquire the land. There must, in addition, we repeat, be an “entry on” or use made of the property, as contemplated by s. 351, under the authority of by-law, or a further by-law adopting an award, or an agreement between the corporation and the parties interested settling the amount of the compensation.

Now, the by-law of November 2nd professes to “expropriate” simpliciter. “Take” adds nothing to “expropriate” in view of the definition of “expropriate” in s. 337 (a). We agree with the view expressed by Meredith,

[Page 429]

C.J.C.P., in Re City of Toronto and Grosvenor Street Presbyterian Church Trustees[9] to the effect that the intention to grant authority to “enter on” or “make use” of the land must be expressed or given by implication in a by-law. Here, such power is not given in express terms, and we see no sufficient reason for implying it. Indeed, it should be observed that the “expropriating by-law” professes to expropriate the whole of the westerly forty feet of a certain lot 43, while the land with which we are concerned, and which it is contended was taken by the by-law, is only part of the property described in it,—something between one quarter and one half of it. We cannot think that this by-law, in itself, authorizes—by implication—the officials of the corporation, without a further by-law, to commit the corporation to the taking of this fraction of the land, the whole of which, we must assume, was required for the purposes of the scheme, by entering upon or making use of it without having arranged or ascertained the terms upon which the residue of the land involved in the scheme could be acquired. In our opinion, the “expropriating by-law” had not the effect of authorizing the officials of the corporation to do any act or take any proceeding which would deprive the corporation of the benefit of the locus poenitentiae provided for by s. 351.

We turn now to the immediate question. An “expropriating by-law” having been passed, which in itself did not bind the Corporation to acquire the property, which could not be converted into a binding obligation to acquire it by any act or proceeding of the parties interested in it, and which, therefore, in itself, did not constitute an acquisition or authorize the officials of the Corporation to effect an acquisition: did that by-law operate to empower the Council, to fasten such an obligation upon the Corporation, and to effect such an acquisition, by resolution alone?

There are two grounds upon which this question must, we think, be answered in the negative. First, the amount of compensation to be paid is frequently the most important element entering into the considerations which influence the decision of public authorities in respect of the acquisition of lands for public purposes; and where there is a proposal to acquire land for a public park, or for the pur-

[Page 430]

poses of a public park, under s. 396 (45), the most weighty consideration would, probably, in most cases be this element of cost. The magnitude of the compensation to be paid seems to be so radical a matter, and the settlement of it, therefore, so important a step in the process of acquiring lands under s. 396 (45), as to justify, in our opinion, the conclusion that the authority to assent to such an agreement must proceed from a by-law enacted under that clause. To hold that a simple “expropriating by-law”, where there is no express or implied authority by by‑law to settle the compensation, creates such authority by force of the statute, would, we think, postulate an intention out of harmony with that manifested by the enacments of s. 351, which (in such circumstances) so carefully protects the interests of the ratepayers by making adoption by by-law a condition of the efficacy of an award of the arbitrators.

The second ground is that the power to settle compensation by agreement is one of those powers contemplated by s. 258 (1). It might with some force be argued that the transaction under consideration in this appeal was, in its true character, a purchase; that the acquisition was a voluntary acquisition; that the “expropriating by-law” was nothing more than a negotiating instrumentality of not much greater efficacy than the existence of the power itself to expropriate. But we do not proceed upon that ground. The power to create a binding contractual obligation fixing the amount of the compensation to be paid in circumstances such as those under review is, we think, clearly ejusdem generis with the power to acquire by purchase; a power which, as we have seen, can only be executed by by-law.

We think the appeal should be allowed, and the action dismissed with costs throughout.

Appeal allowed with costs.

Solicitor for the appellant: C.M. Colquhoun.

Solicitors for the respondents: Norman Sommerville & Company.