Québec Téléphone v. Bell Telephone Co. of Canada, [1972] SCR 182

Supreme Court of Canada

Québec Téléphone v. Bell Telephone Co. of Canada, [1972] S.C.R. 182

Date: 1971-04-05

Quebec Telephone Appellant;

and

The Bell Telephone Company of Canada Respondent;

and

The Attorney General of the Province of Quebec and the Attorney General of Canada Intervenants.

1971: February 1, 2, 3; 1971: April 5.

Present: Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall, Spence, Pigeon and Laskin JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC

Declinatory exception—Injunction—Jurisdiction—Public utilities—Contiguous provincial and interprovincial telephone systems—Inter-system long distance calls—New tariff announced by interprovincial system—Tariff approved by Canadian Transport Commission—Jurisdiction of Superior Court to grant injunction.

[Page 183]

The appellant operates a provincial telephone system and the respondent, an interprovincial one. The two systems are contiguous. To provide full long distance service, the two systems are interconnected. Six traffic agreements were made to define the conditions governing the interconnections and their use thereof. The appellant cancelled the four contracts which provided for automatic application of the respondent’s rates. Traffic interchange remained unaffected. In 1968, the Canadian Transport Commission, which has jurisdiction over the respondent’s rates, authorized the latter to put into force a new tariff involving substantial reductions for long distance calls. The appellant applied to the Superior Court for an injunction to prevent the respondent from putting that tariff into effect. The respondent filed a declinatory exception, challenging the jurisdiction of the Superior Court and praying that the petition for injunction be dismissed. The exception was dismissed by the trial judge, but his decision was reversed by a majority judgment in the Court of Appeal. That Court granted leave to appeal to this Court.

Held (Abbott, Martland, Judson and Ritchie JJ. dissenting): The appeal should be allowed.

Per Fauteux C.J. and Hall and Pigeon JJ.: The appellant’s contention was that the new tariff was not of itself nor by virtue of the Commission’s approval applicable to inter-system long distance calls and that the rates for those calls wholly remained as previously established until altered by agreement. That issue, which was in no way a challenge against the implementation of the respondent’s tariff over its system, is a subject-matter within the jurisdiction of the Superior Court. There was clearly a dispute between the parties as to the rate applicable. The Superior Courts have general jurisdiction over all matters except when by Statute this jurisdiction has been taken away. Section 53(9) of the Railway Act cannot be considered as depriving a Superior Court of the jurisdiction to hear a case in which the extent of the jurisdiction of the Commission or the effect of its decision is in question. On the contrary, such provisions have always been construed as preserving to the Superior Courts the jurisdiction to determine the scope of the authority of the board that made the decision, and this determination has always been made on the merits.

Per Fauteux C.J. and Hall, Spence and Laskin JJ.: The declinatory exception should be dismissed. There is an issue between the two companies as to

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the proper construction of the two outstanding contracts, and also as to the existence of a quasi-contractual obligation stemming from the negotiations between them following the cancellation of the four contracts. The Quebec Superior Court is, initially at least, a competent tribunal to pass on these issues.

Per Abbott, Martland, Judson and Ritchie JJ., dissenting: An injunction which would prevent, in respect of interurban calls between the two systems, the application of the rates determined by the Canadian Transport Commission would preclude the respondent from applying those rates on its own system. The rates to be charged in respect of calls carried by the respondent’s system must and can only be fixed by the Commission. Such an injunction would therefore be enjoining the performance of a legal duty, which is something for which an injunction order cannot be granted. In these proceedings the appellant asks the Superior Court to order respondent not to put into force a tariff of rates approved by the Commission for application on all of the respondent’s network. The Superior Court had no jurisdiction to grant an injunction in the terms asked for.

APPEAL from a judgment of the Court of Queen’s Bench, Appeal Side, province of Quebec[1], reversing a judgment of Martel J. which had dismissed a declinatory exception. Appeal allowed, Abbott, Martland, Judson and Ritchie JJ. dissenting.

Jules Deschênes, Q.C., for the appellant.

Ernest Saunders, Q.C., and Paul Hurtubise, for the respondent.

Gaston Pouliot, Q.C., for the Attorney General of Quebec.

Paul Ollivier, Q.C., for the Attorney General of Canada.

Fauteux C.J. and Hall J. concurred with the judgment delivered by

PIGEON J.—Appellant operates a telephone system located wholly within the Province of Quebec. Its operations are under the control of the Quebec Public Service Board.

Respondent operates a telephone system in several provinces, mainly in Ontario and Quebec.

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It is accordingly under the authority of the Canadian Transport Commission.

To provide full long distance service, the two systems are interconnected. Traffic agreements were made to define the conditions governing the interconnections and the use thereof. Each agreement applied to a specified part of appellant’s system and was duly approved by both regulatory authorities. The first four provided as follows with respect to tolls:

[TRANSLATION] The tolls for all calls carried under this agreement shall be in conformity with the rates and regulations which Bell shall from time to time, …

In the last two, dated June 2, 1966, the provision for tolls was as follows:

[TRANSLATION] The tolls for all calls carried under this agreement shall be in conformity with the rates and regulations which the companies shall from time to time adopt with the approval of their regulatory bodies, …

All the traffic agreements provided for the division between the two companies of the amounts collected on calls in proportion to the distance they are carried over each system between rate centres. In many cases provision was made for a supplement (“other line rate”) to be added to the regular long distance rate, for Quebec-Telephone’s exclusive benefit.

The traffic agreements were all subject to cancellation by sixty-day notice in writing. By letters dated December 18, 1967, appellant cancelled the four contracts which provided for automatic application of Bell Canada’s rates. Traffic interchange remained unaffected.

At the end of May 1968, Bell Canada made an application to the Canadian Transport Commission seeking authority to put into force a new tariff involving substantial reductions for long distance calls. This was granted. On July 2, 1968, a message was sent to Quebec‑Telephone including the following paragraph:

As has been made clear to Quebec-Telephone for a number of months, Bell Canada will institute the revised message toll rates on July 7, 1968. The existing “other line” schedule will continue to be applied.

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In the light of previous communications and of instructions issued to toll chief operators including those of Quebec-Telephone, the latter read this as meaning that Bell Canada intended to fully apply its new tariff to all calls billed by it even when carried partly over the other system, subject only to the addition of “other line” charges.

On July 4, 1968, Quebec-Telephone instituted proceedings in the Superior Court by way of petition for an injunction. This petition alleged in substance the facts above stated, set forth the contention that the tariff approved by the Canadian Transport Commission was applicable solely to long distance calls within the Bell Canada system but that the latter intended to apply it to calls carried over its system and asserted that this was in violation of the two subsisting agreements and also of the orders of the Public Service Board governing tolls for the use of its system in carrying long distance calls. In this respect, it seems convenient to quote the following paragraphs of the petition:

[TRANSLATION] 16. Further, respondent recently had a new rate schedule for long distance calls within its system approved by the Canadian Transport Commission, and published on May 27, 1968;

17. It now appears that respondent intends, by a veritable power play, to force this new rate schedule on petitioner from midnight of July 6-7, 1968;

* * *

20. This unilateral decision by respondent constitutes a direct violation of clause 6, quoted in paragraph 12 hereof, of the two contracts currently in force between the parties;

21. This unilateral decision by respondent is in direct conflict with the orders of the Quebec Public Service Board, which alone fix the rates governing the use of petitioner’s system for carrying long distance calls;

A restraining order was sought in the following terms:

[TRANSLATION] …to order the respondent to suspend, until a decision has been rendered on this petition, the proposed application at midnight of July 6-7, 1968, between petitioner’s system and that

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of respondent, of the rate schedule published by respondent on May 27, 1968, and applicable to long distance telephone calls;

The parties appeared before a judge the following day, July 5, 1968, a witness was heard and exhibits filed. An interim injunction was refused and the application for an interlocutory injunction was postponed to July 11. In the interval, Bell Canada filed a declinatory exception challenging the jurisdiction of the Superior Court and praying that the petition for injunction be dismissed. The declinatory exception was heard on the evidence previously given. It was dismissed by Martel J. but on appeal[2], this decision was reversed, Rivard J. dissenting. Leave to appeal to this Court was given by the Court of Appeal.

It is said in Bell Canada’s factum that “the jurisdiction to order respondent not to put into force rates approved by the Commission is a jurisdiction exclusive to the Commission”. The fallacy in this statement is the implication that the object of Quebec-Telephone’s proceedings is to prohibit Bell Canada from putting into force rates approved by the Commission in respect of calls to which those rates are applicable by virtue of the Commission’s approval. In other words, the contention is that Quebec-Telephone seeks to prevent Bell Canada from complying with its legal duty of acting upon a tariff approved by the Commission. But that is precisely what Quebec-Telephone is not asking. When the prayer of the petition is read with the allegations thereof, especially those above quoted, it is clear that Quebec-Telephone’s contention is that the tariff approved by the Commission is, of itself, applicable only to long distance calls within Bell Canada’s system (“appels interurbains intérieurs à son réseau”). The complaint is that Bell Canada intends to apply this tariff to long distance calls to which it does not apply as approved, namely to calls carried partly over Quebec-Telephone system (“entre le réseau de la requérante et celui de l’intimée”).

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Therefore, the issue before the Superior Court was in no way a challenge against the implementation of Bell Canada’s tariff over its system. Quebec-Telephone’s contention was and remains that the new tariff was not of itself nor by virtue of the Commission’s approval applicable to inter-system long distance calls and that the rates for those calls wholly remained as previously established until altered by agreement, not only the “existing ‘other line’ schedule”. On the declinatory exception, of course, the question is not whether Quebec‑Telephone’s contention is well founded but whether the subject-matter is within the jurisdiction of the Superior Court.

In the Court of Appeal, the essential part of the reasons given by Hyde J. for holding that the Superior Court is without jurisdiction was as follows:

Apart from their mutual concern for the interests of the public there was nothing to require the parties to continue interconnecting service to the areas covered by the four cancelled contracts (R-5 to R-8). Bell-Canada could not be required by anybody other than the Federal Board to provide such service at rates other than those approved by it which means the new tariff approved for midnight of July 7-8, 1968.

As far as the service to the territories covered by the two contracts remaining in force (R‑10 and R-13) is concerned clause 6, quoted above, in each provides that the tariff for calls thereunder shall “conforme aux taux et règlements que les compagnies adopteront de temps à autre avec l’approbation des organismes les régissant”. The Federal Board has approved the new Bell-Canada rates and no other body has the right to interfere.

I agree with the statement in Appellant’s factum (p.8) that by the proceedings initiated by Respondent (Quebec-Telephone) the latter is endeavouring “de façon indirecte, de soumettre à la Cour Supérieure la question des taux. Or, le problème des taux ne peut se régler que par une entente mutuelle ou par le recours à la Commission Canadienne des Transports”.

It will be noted that the reason given to exclude the jurisdiction of the Superior Court is, in short, that the Canadian Transport Commission has exclusive jurisdiction over rates for calls

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carried partly on the Bell Canada system and partly on an interconnected system. This is a proposition that counsel for Bell Canada did not support at the hearing in this Court. On the contrary, it was conceded that the Quebec Public Service Board has exclusive jurisdiction over rates for the use of the Quebec-Telephone system including long distance calls. The submission of counsel was that in the case of different rates established or approved by the two authorities, the charge should be arrived at by applying each rate in proportion to the distance each call is carried over each system. Counsel for Quebec-Telephone, while agreeing with the proposition respecting the jurisdiction of the Quebec Board, submitted at the hearing that the practical consequence was to be determined in accordance with the principles established by this Court in The Montreal Street Ry. v. The City of Montreal[3]. This decision under the Railway Act was affirmed in the Privy Council[4], where it was said (at p. 346):

One of the arguments urged on behalf of the appellants was this: The through traffic must, it is said, be controlled by some legislative body. It cannot be controlled by the provincial Legislature because that Legislature has no jurisdiction over a federal line, therefore it must be controlled by the Legislature of Canada. The answer to that contention is this, that so far as the “through” traffic is carried on over the federal line, it can be controlled by the Parliament of Canada. And that so far as it is carried over a non-federal provincial line it can be controlled by the provincial Legislature, and the two companies who own these lines can thus be respectively compelled by these two Legislatures to enter into such agreement with each other as will secure that this “through” traffic shall be properly conducted: and further that it cannot be assumed that either body will decline to co-operate with the other in a reasonable way to effect an object so much in the interest of both the Dominion and the province as the regulation of “through” traffic.

This principle was reaffirmed by this Court in B.C. Electric Ry. v. Canadian National Ry.[5] in which Smith J. said (at p. 170):

The mere fact that the Central Park line makes physical connection with two lines of railway under

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Dominion jurisdiction would not seem to be of itself sufficient to bring the Central Park line, or the portion of it connecting the two federal lines, within Dominion jurisdiction.

I find it unnecessary to consider whether on the evidence what Bell Canada intended to do, and in fact did, was to apply completely the new rate, plus the “other line” charge, to all calls carried partly over Quebec-Telephone lines or only in proportion to the distance. In any case, there was clearly a dispute between the parties as to the rate applicable, Quebec-Telephone contending that the rate previously established remained in force completely for all calls carried over its system, and it was not contended in this Court that the whole matter of the rates for interconnecting calls was within the jurisdiction of the Canadian Transport Commission and determined by the tariff approved by it for Bell Canada.

In the Court of Appeal, Casey J. said:

It may be that the parties have matters to discuss and that these matters or at least some of them may be within the competence of the civil courts. But the putting into effect by Appellants, and Respondent is asking for nothing more, of the tariff approved by the Federal Board is not one of them.

In agreement with Mr. Justice Hyde, I would maintain this appeal.

Neither in Quebec nor in the rest of Canada is there, as there is, in modern French law, a fundamental division of competence between civil and administrative jurisdictions. The principle is that the Superior courts have general jurisdiction over all matters except when by statute this jurisdiction has been taken away. As was said in Valin v. Langlois[6]: “They are the Queen’s Courts, bound to take cognizance of and execute all laws, whether enacted by the Dominion Parliament or the local Legislatures, …”. Consequently, the Superior courts have superintending and reforming power over federal boards and agencies. (Three Rivers Boatman Ltd. v. Conseil Canadien des Relations Ouvrières[7]).

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In support of the contention that the Superior Court did not have jurisdiction in the present case, counsel for Bell Canada relied on sub. 9 of s. 53 of the Railway Act which is as follows:

53. (9) Save as provided in this section,

(a) every decision or order of the Commission is final, and

(b) no order, decision or proceeding of the Commission shall be questioned or reviewed, restrained or removed by prohibition, injunction, certiorari, or any other process or proceeding in any court.

On this point it should be noted first that the validity of the order approving Bell Canada’s new tariff for long distance calls is not put in question by Quebec-Telephone’s proceedings. What is in question is the proper rate applicable to long distance calls carried in part over the Bell Canada system and in part over the Quebec-Telephone system. That system is admittedly not subject to the rate-making authority of the Canadian Transport Commission. The allegations of the petition show that Quebec-Telephone relies on two agreements still in force between the two companies and on tariffs approved by the Quebec Public Service Board that has rate-making authority over Quebec-Telephone. As previously pointed out, the decision of the Canadian Transport Commission is not questioned. What is asked is that Bell Canada be prevented from giving it an effect it does not have in law.

In the second place, it must be noted that a provision quite similar to the one just quoted is found in the law governing the Canada Labour Relations Board and in practically every similar statute, federal or provincial. In no case has such a provision been considered as depriving a Superior court of the jurisdiction to hear a case in which the extent of the jurisdiction of a board or the effect of its decisions was in question. On the contrary, such provisions have always been construed as preserving to the Superior courts the jurisdiction to determine the scope of the authority of the board that made the decision, and

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this determination has always been made on the merits. To construe such provisions as affecting jurisdiction would have extremely serious consequences because it would compromise the rule that an injunction or other prohibitory order issued by a superior court must always be obeyed. If statutory restrictions of this kind against such orders were held to limit the jurisdiction, it would mean that an order could be disobeyed with impunity if issued in violation of a statutory prohibition, because there can be no doubt that what is done without jurisdiction is a nullity.

On a declinatory exception, the Court does not have to consider whether the plaintiff is entitled to the remedy he claims; and the fact that he may not be entitled to the whole of it or to a part only is entirely irrelevant. A Superior court is not without jurisdiction because a claim is ill-founded in law. On a declinatory exception, the question is the same as on the merits of a writ of prohibition with respect to an inferior court: jurisdiction in the strict sense. It is well established by the decision of this Court in Segal v. City of Montreal[8], that:

The only matter open for consideration in such a case is whether or not the tribunal sought to be prohibited had the right to enter on the enquiry; and not at all, assuming such right, whether its conclusion was or was not correct.

In my view, the question whether a petition for injunction is a proper way to seek from the Superior court a decision on a question such as arises in this case does not have to be considered because this cannot affect the jurisdiction. If the Superior Court is competent to hear the case, it may have to dismiss the application for injunction if it is not judged well‑founded or not held to be the proper remedy under the circumstances, but those are not decisions to be reached on a declinatory exception where the only issue is jurisdiction. Article 163 of the Code of Civil Procedure reads:

163. A defendant, summoned before a court other than that before which the suit should have been

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instituted, may ask that the suit be referred to the competent court within the legislative authority of the province, or that the suit be dismissed if there is no such court.

It was stressed in argument that Bell Canada is obliged under penalty to abide by any tariff approved by the Canadian Transport Commission. It might be noted first that such is also the situation in the case of decisions by other boards and was never considered as preventing a superior court from issuing a prohibitory or restraining order. However, in this case, the Superior Court is not requested to interfere with the proper application of the new tariff but to prevent Bell Canada from giving it what is claimed to be an unwarranted application to intersystem calls not legally subject to its application.

The parties are in agreement that Bell Canada is subject only to the rate-making authority of the Canadian Transport Commission and Quebec-Telephone to the Quebec Public Service Board. There is a conflict as to the legal situation resulting from the existence of different tariffs for long distance calls having been approved by the two authorities. It is clear that the provincial board cannot claim jurisdiction over this question and Bell Canada does not contend that the Canadian Commission has such jurisdiction. How then can it be contended that the Superior Court of the Province does not have it? Counsel for Bell Canada suggests that Quebec-Telephone could submit the question to the Canadian Transport Commission but he has failed to give any reason why this should be the only avenue open, so that although admittedly not subject to that jurisdiction it would have no alternative but to submit thereto.

The Attorney-General for Canada and the Attorney-General for Quebec have intervened in this case but, in view of the positions taken at the hearing, it does not seem that any of the questions discussed in the interventions now require consideration.

I would allow the appeal, reverse the judgment of the Court of Appeal, and restore the judgment

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of the Superior Court with costs against the respondent in this Court and in the Court of Appeal. There should be no costs on the interventions.

Since writing the above I have had the advantage of reading the reasons of Laskin J. I wish to add that I agree with his observations.

Fauteux C.J. and Hall and Spence JJ. concurred with the judgment delivered by

LASKIN J.—I agree with Mr. Justice Pigeon that a dispute exists which is within the competence of the Quebec Superior Court and that, for the reasons he has given, this appeal should be allowed. The issue in the appeal, narrow to begin with because it arose out of a declinatory exception, was further circumscribed by the following avowals and acknowledgments which emerged during the hearing. First, it was asserted by all that there was no constitutional question facing the court. Second, Quebec-Telephone was subject to the compulsory direction of the Quebec Public Service Board which had no compulsory jurisdiction over Bell Canada. Third, Bell Canada was subject to the compulsory direction of the Canadian Transport Commission which had no compulsory jurisdiction over Quebec‑Telephone. Fourth, Quebec-Telephone in its claim for an injunction was not seeking to deny Bell Canada’s right (and, indeed, duty) to put its authorized rates into effect on the Bell Canada network or system. Fifth, Bell Canada did not claim any right to impose its rates on calls over the Quebec-Telephone system.

It must occasion surprise, in the light of these considerations, that the parties have litigated to this Court a dispute on the implementation of Bell Canada rates. The explanation is that the propositions numbered four and five above were stated in the context of the parties’ respective understandings of the thrust of the claim for injunction and of the declinatory exception taken against it. Back of these legal procedures was a history of contractual relationships between the two companies on intersystem long distance calls. Our immediate concern is with six contracts, four of which were cancelled by Quebec-Telephone (and, admittedly, properly cancelled) before the events

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that precipitated the request for an injunction. The competence of the two companies to contract with each other was not in issue, but implementation of their contracts required (and had) the approval of their respective regulatory agencies.

The central theoretical difficulty in this case lies in the different perspectives from which the two companies view this litigation. Quebec-Telephone looks upon it as founded in contract and quasi-contract, in respect of which the Quebec Superior Court is undoubtedly competent. Bell Canada regards it as an attempt to encroach upon the exclusive competence of a federal administrative agency, to which it is subject. But that competence relates to Bell Canada alone; it is res inter alios acta so far as Quebec-Telephone is concerned, save to the extent to which Quebec-Telephone has submitted to the federal agency’s jurisdiction as is envisaged by that agency’s governing statute. There has been no submission, however, in respect of the matter put in issue by the claim for an injunction.

I do not understand Bell Canada to contend that the Canadian Transport Commission has exclusive jurisdiction to interpret and enforce contracts between Bell Canada and Quebec‑Telephone, albeit the approval of that board was given to Bell Canada to bind itself contractually to Quebec-Telephone. If, as in my opinion is the case here, there is an issue between the two companies as to the proper construction of the two outstanding contracts, and also as to the existence of a quasi-contractual obligation stemming from negotiations between them following the cancellation of four contracts, the Quebec Superior Court is, initially at least, a competent tribunal to pass on these issues. The result of the canvass may be that Quebec-Telephone’s claim has no merit. (Chief Justice Challies denied a request for an interim injunction and set a date for argument on an interlocutory injunction. However, the declinatory exception was made before that date arrived.) That, however, is not a conclusion which can be made at this stage of the litigation

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under a declinatory exception which rejects any jurisdiction in the Quebec Superior Court.

It is said that the prayer for an injunction manifests the purpose of Quebec-Telephone to prevent Bell Canada from putting its rates into effect on its system. If that were clearly so, it would of course be a complete answer to Quebec-Telephone’s claim. But it is not so; not clearly and, indeed, not at all. The bare request for an injunction cannot be divorced from the twenty-seven paragraphs of the claim that precede it and which bring the contractual relationships of the parties to the fore as basic to the injunction claim. Moreover, what Quebec-Telephone is seeking to enjoin is the implementation of Bell Canada’s rates “entre le réseau de la Requérante et celui de l’Intimée… aux appels téléphoniques interurbains”. This is not a claim to enjoin the implementation of Bell Canada’s rates “sur le réseau de l’Intimée”. If an injunction was granted in the terms sought, it would not be violated if Bell Canada made its rates effective over its system alone.

If it be said that the claim for an injunction is ambiguous, it is matched in any such aspect by the terms of the declinatory exception. There is first an assertion that Bell Canada is subject to the jurisdiction of the Canadian Transport Commission which has fixed the rates that Bell Canada may exact on local and interurban calls. Next comes an allegation that the claim for injunction amounts to a request that the Quebec Superior Court fix those rates. The declinatory exception ends by denying that the court has any such jurisdiction. No doubt, Bell Canada has chosen fighting ground, but it has not engaged Quebec-Telephone.

I am aware that other important public issues, beyond those expressly raised and argued, lurk beneath the surface of this litigation. But Quebec-Telephone has sought to avoid them in the allegations it has made; and Bell Canada cannot, of its own motion through a declinatory exception alone, raise them in a vacuum.

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I would dispose of the appeal as proposed by my brother Pigeon.

Martland, Judson and Ritchie JJ. concurred with the judgment delivered by

ABBOTT J. (dissenting)—Appellant is a telephone company with its head office in Rimouski and it operates a telephone system located chiefly in the eastern portion of the Province of Quebec, and wholly within that Province. Its rates are subject to the authority of the Quebec Public Service Board.

Respondent operates an interprovincial telephone system located chiefly in Ontario and Quebec. Its rates are subject to the approval of the Canadian Transport Commission, by reason of s. 380 et seq. of the Railway Act.

Long-distance telephone calls placed in the territory of either appellant or respondent, and directed to the territory of the other, must necessarily be carried over both telephone systems.

For a number of years prior to 1968, appellant and respondent were able to agree as to how rates should be apportioned for such calls. This agreement was evidenced by six different contracts, each of which concerned calls to and from a specified part of the appellant’s system. The contracts were not all identical in their terms.

Four of the said contracts contained identical clauses by which appellant agreed that the rates to be charged by appellant for all calls to which such contracts applied would be in conformity with the rates which respondent might from time to time be authorized to adopt. These four contracts were unilaterally cancelled by appellant, effective February 20-21, 1968.

However, the evidence shows that the parties continued to carry telephone calls between their respective territories, despite the fact that the contracts had been cancelled, and negotiations appear to have been carried on to see if some agreement could be reached regarding the calls previously covered by the four contracts.

As to the other two contracts, which remained in force, each contained a clause concerning rates in the following language:

[TRANSLATION] 6. The tolls for all calls carried under this agreement shall be in conformity with the rates

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and regulations which the companies shall from time time (sic) adopt with the approval of their regulatory bodies, and each company shall establish within its system the rate centres necessary for these purposes. No amount in excess of the said tolls shall be claimed by either company, except reasonable messenger costs when it is necessary to notify any person that he is wanted on the telephone.

In May 1968, respondent issued a new tariff for long-distance service between points in Ontario, Quebec, Newfoundland, Labrador and Northwest Territories, to become effective on July 7, 1968. This tariff had been duly approved by the Canadian Transport Commission and provided for rates lower than those previously in force.

Appellant did not participate in the proceedings before the Canadian Transport Commission which led to its approval of the new rates. It is common ground, however, that appellant was aware of the fact that respondent’s new tariff would go into force on the night of July 6-7, 1968.

By a petition for Injunction presented on July 5, 1968, appellant applied to the Superior Court of the District of Montreal for an injunction to prevent respondent from putting the new long‑distance tariff into force. The conclusions of that Petition read as follows:

[TRANSLATION] WHEREFORE, MAY IT PLEASE THIS HONOURABLE COURT

To grant the petition of the petitioner; By an immediate interim injunction, to order the respondent to suspend, until a decision has been rendered on this petition, the proposed application at midnight of July 6-7, 1968, between petitioner’s system and that of respondent, of the rate schedule published by respondent on May 27, 1968, and applicable to long distance telephone calls;

By an interlocutory injunction, to subsequently enjoin respondent to continue to suspend such application until a decision has been rendered on the petition for a permanent injunction, which will be served on respondent at the same time as the order for an interlocutory injunction;

To fix the amount of the security;

with costs against respondent.

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On July 5, 1968, appellant’s request for an immediate interim injunction was heard before Associate Chief Justice Challies of the Superior Court and an officer of the Appellant company testified and filed a number of exhibits. At the close of the hearing, Associate Chief Justice Challies refused to grant an interim injunction, and fixed the hearing on the Petition for Interlocutory Injunction for July 11, 1968.

On July 11, 1968, respondent presented to the Superior Court a Motion by way of Declinatory Exception contesting the jurisdiction of the Superior Court to hear and decide the Petition for Injunction.

The declinatory exception was dismissed by the Superior Court, but that judgment was reversed by a majority judgment of the Court of Appeal[9]. That Court granted leave to appeal to this Court.

The sole question in issue here and in the Courts below is whether the Superior Court had jurisdiction to grant an injunction in the terms asked for.

As I have said, any interurban call between the respondent’s system and that of the appellant would, of necessity, involve using the respective facilities of both companies. An injunction which would prevent, in respect of such calls, the application of the rates determined by the Canadian Transport Commission would preclude the respondent from applying those rates on its own system.

The rates to be charged in respect of calls carried by the respondent’s system must and can only be fixed by that Commission. Similarly, the rates to be charged in respect of calls carried by the appellant’s system must and can only be fixed by the Quebec Public Service Board. To enjoin the respondent from imposing, on its lines, the rates set by the Canadian Transport Commission, or to enjoin the appellant from imposing, on its lines, the rates set by the Quebec Public Service Board would be to enjoin the performance of a legal duty, which is something for which an injunction order cannot be granted. The purpose of an injunction is to prevent the performance of an illegal act.

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As indicated by Mr. Justice Casey in his reasons for judgment, there are no doubt matters which may be in dispute between these two public utility companies (whether arising out of a contract between them or otherwise) and which fall within the competence of the ordinary Courts having jurisdiction in civil matters. The rates to be charged by respondent over its own lines are not among such matters. Under the Railway Act, exclusive power to fix such rates is vested in the Canadian Transport Commission. That power is conferred to protect the public, and users of the telephone lines of respondent cannot legally be charged, nor are they obliged to pay any rate other than that fixed by the Commission.

Under s. 381(4) of the Railway Act, power is given to the Canadian Transport Commission to suspend or disallow the rates to be charged by respondent over its own lines. Appellant did not see fit to proceed under that section. Instead, in these proceedings, it asked the Superior Court to order respondent not to put into force a tariff of rates approved by the Canadian Transport Commission for application on all of the respondent’s network in Quebec and Ontario.

In my opinion, the Superior Court had no power to make such an order.

Since I am also in agreement with the reasons and conclusions of Casey and Hyde JJ. in the Court below, I would dismiss the appeal with costs.

Appeal allowed with costs, ABBOTT, MARTLAND, JUDSON, and RITCHIE JJ. dissenting.

Solicitors for the appellant: Deschênes, de Grandpré, Colas, Godin & Lapointe, Montreal.

Solicitors for the respondent: Robitaille & April, Montreal.

Solicitors for the Attorney General of Quebec: Pouliot, Dion & Guilbault, Montreal.

Solicitor for the Attorney General of Canada: D.S. Maxwell, Ottawa.