Majestic Neckwear Ltd. v. City of Montreal, [1979] 1 SCR 823

Supreme Court of Canada

Majestic Neckwear Ltd. v. City of Montreal, [1979] 1 S.C.R. 823

Date: 1979-02-20

Majestic Neckwear Ltd. (Plaintiff) Appellant;

and

City of Montreal (Defendant) Respondent.

1978: May 16; 1979: February 20.

Present: Laskin C.J. and Martland, Ritchie, Spence, Pigeon, Dickson, Beetz, Estey and Pratte JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Administrative law—Public Service Board—Error of law—Superintending and reforming power of the Superior Court—Code of Civil Procedure, art. 33 (old art. 50).

Expropriation—Municipal purposes—Indemnity claimed by tenant—Charter of the City of Montreal, S.Q. 1899, c. 58, ss. 418, 428, 429 (enacted by S.Q. 1925, c. 92, ss. 37, 38)—Code of Civil Procedure (old), art. 1066a.

On March 1, 1960, the Public Service Board (the “Board”) denied appellant an indemnity for the loss of its rights as a tenant of immoveable property expropriated by the City of Montreal (the “City”). The demand for an indemnity was made under the provisions of the Charter of the City of Montreal governing expropriations, which were not at that time subject to the Code of Civil Procedure (art. 1066a, old Code). As, under s. 429 of the Charter in force at that time, the decisions of the Board were not subject to appeal, appellant instituted an action to set aside the decision of the Board for an error of law (art. 50, old C.C.P.). This action was met by an inscription in law alleging that the Board was not subject to the superintending and reforming power of the Superior Court. This inscription was dismissed by a judge of the Superior Court, who relied on two decisions: Royal Trust Co. v. City of Montreal (1918), 57 S.C.R. 352, and O. Martineau and Sons Ltd. v. City of Montreal, [1932] A.C. 113. On the merits, on the other hand, the Superior Court dismissed the action to set aside, on the ground that the error of law did not give rise to the remedy sought by appellant. The Court of Appeal affirmed this decision; hence the appeal to this Court.

Held: The appeal should be dismissed.

The situation here is essentially the same as in City of Montreal v. ILGWU Center, [1974] S.C.R. 59: appellant complains that the Board erroneously refused to fix an indemnity for the loss of its rights as a tenant.

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Nothing in the relevant legislation deprived the Superior Court of its general superintending and reforming power under art. 50 of the former C.C.P. (art. 33 of the present Code).

Nevertheless, the Board did not err in applying s. 418 of the Charter without making a distinction it does not contain. The homologation affecting the expropriated immoveable is prior to the lease, and appellant’s situation is no different although the expropriation was ordered for a purpose other than that specified in the homologation.

Royal Trust Co. v. City of Montreal (1918), 57 S.C.R. 352; O. Martineau and Sons Ltd. v. City of Montreal, [1932] A.C. 113; City of Montreal v. ILGWU Center, [1974] S.C.R. 59, followed; Ministre de la Voirie v. Melcar Inc., [1964] Que. Q.B. 191, distinguished.

APPEAL against a decision of the Court of Appeal, affirming a judgment of the Superior Court. Appeal dismissed.

Yoine Goldstein and Philip Meyerovitch, Q.C., for the appellant.

Jean Péloquin, Q.C., for the respondent.

The judgment of the Court was delivered by

PIGEON J.—This appeal was brought as of right against a decision of the Court of Appeal of Quebec, dated January 8, 1975, which affirmed the judgment of the Superior Court dated October 2, 1964 dismissing plaintiffs action to set aside a decision of the Public Service Board dated March 1, 1960, whereby plaintiff was denied any indemnity for the loss of its rights as a tenant of immoveable property expropriated by the City of Montreal for what was known as the “Dozois Plan”, a “plan for the elimination of slums and the construction of sanitary housing” specially authorized by acts of the Legislature.

The City acquired ownership of the immoveable in question by depositing a plan of expropriation in the Registry Office on May 16, 1957. Appellant was obliged to vacate the premises on August 31, 1957. Its demand for an indemnity was made under the provisions of the City Charter governing expropriations for municipal purposes. At the outset, it should be noted that, by virtue of a

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specific exception in art. 1066a of the Code of Civil Procedure then in force, such expropriations were not governed by the provisions of that Code. The main provisions in force at that time concerning compensation for tenants of immoveables expropriated by the City were in ss. 428 and 429 of the City’s former Charter (62 Vict. c. 58, as amended), enacted by ss. 37 and 38 of the statute of 1925, 15 Geo. V, c. 92. They read as follows:

428. No indemnity, damages or compensation shall be paid to tenants of any land or building, required in whole or in part for expropriation purposes, beyond an amount which shall not exceed the remainder of the current year’s rent and of one other year’s rent of the premises occupied by them; and then only in cases where the lease is for one or more years beyond the year current at the time of the adoption by the council of the resolution for such expropriation.

The president or acting-president of the Quebec Public Service Commission may award the value of such repairs and improvements as may have been made by a tenant prior to the passing by the council of the resolution concerning the expropriation, provided that the same are not included in the valuation of the building.

No indemnity shall be allowed, in any event, to tenants whose leases shall have been made or who shall have taken possession of the premises subsequent to the resolution of the council for the said expropriation.

429. The president or acting-president of the Quebec Public Service Commission shall ascertain the compensation to be paid to the proprietor whose building or land is to be expropriated, and determine, if need be, the rights of the city mentioned in the foregoing articles for the acquisition of the whole or part of the said buildings.

There shall be no appeal from the decision of the president or acting-president of the Public Service Commission.

A subsequent statute (1949, 13 Geo. VI, c. 47, s. 13) transferred those powers to the Public Service Board. For reasons to be considered later, the Board held that appellant was not entitled to any indemnity. As under the aforementioned s. 429 the decision was not subject to appeal, appellant instituted on May 27, 1960 an action in the Superior Court against the City to set aside the decision of the Board for an error of law. This action was

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met by an inscription in law alleging that the Public Service Board was not a Court subject to the superintending and reforming power of the Superior Court, and that its decisions were final and not subject to appeal.

This inscription in law was dismissed by judgment of Victor Pager J. of the Superior Court, dated February 17, 1961. He held that the action was not ill-founded in law relying, first, on the decision of this Court in Royal Trust Co. v. City of Montreal[1]. He referred in particular to the following statement by Davies J., which as he noted was adopted by Lord Blanesburgh in O. Martineau and Sons, Ltd. v. City of Montreal[2]:

… The Statute makes the award of the commissioners, in such cases as the present, final and without appeal. In order to give ground for attacking it, either highly improper conduct on the commissioners’ part, or fraud, or the proceeding by the commissioners in making the award upon an improper principle, must be clearly shown.

This judgment was therefore based on two cases of great authority dealing specifically with expropriations governed by the Charter of the City of Montreal, and explicitly admitting of the remedy by action for an error of law (“an improper principle”). The trial judge did not say a word of those cases. To hold that there was no remedy available to the appellant, even for an error of law, he said:

[TRANSLATION] IN a very recent decision of the Court of Appeal, Le Ministre de la Voirie de la Province de Québec et al. v. McLean Inc. [sic] et al., reported in [1964] Que. Q.B. 191, Tremblay C.J.Q. held that it is not within the competence of the Superior Court to decide whether in law an indemnity ought to be allowed, as this question is exclusively a matter for the Board. The Chief Justice then went on to state that it is for the Board to decide all questions of law and of fact that must be dealt with in order to arrive at an indemnity.

ACTING within the limits of its jurisdiction, the Board held that plaintiff was not entitled to an indemnity. This decision cannot be amended or modified by this Court, even if there was an error of law, since the Board did not exceed its jurisdiction.

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This is a misinterpretation of the decision of the Court of Appeal in Ministre de la Voirie v. Melcar Inc.[3] The case involved an expropriation governed by the provisions of the Code of Civil Procedure. The Board had denied the expropriated party an indemnity for the servitude of non-access acquired by the Minister together with part of the land. Alleging that this denial was improper, the expropriated party objected to the petition for the homologation of the award submitted to the Superior Court in accordance with art. 1066j. The Superior Court allowed this objection arid ordered the Board to fix an indemnity for the expropriation of the servitude. The Court of Appeal reversed this decision and observed (at pp. 197-198):

[TRANSLATION] On the petition for homologation in accordance with art. 1066j, the Superior Court is not concerned with the merits of the decision of the Board. It must confine itself to ascertaining whether this is indeed an order of the Board, and whether this order is a valid one. If it is, it must homologate it, leaving to this Court any consideration of the merits of the order on an appeal brought in accordance with art. 1066k C.C.P. I adopt the following observations of Tellier J., of the Superior Court, in Ville de Jacques-Cartier v. Lamarre, [1952] C.S. 218:

When the right to expropriate exists or is not challenged, the Court must, on a motion to that end, refer the matter to the competent authority for the fixing of an indemnity if allowable, if due.

I therefore conclude that the Superior Court should have homologated the award of the Board.

Do we in this appeal have greater powers than the Superior Court? May we examine the merits of the award of the Board? I do not think so. This Court has before it an appeal from an interlocutory judgment dismissing a petition for homologation. All that we can do is to render the judgment that the Superior Court should have rendered at this stage of the proceedings. It is only on an appeal brought in accordance with art. 1066k—such as in Auclair v. Le Procureur général de la Province de Québec, [1963] Que. Q.B. 897, that this Court may examine the merits of the award of the Board.

It will be seen that the only question in that case was as to the extent of the jurisdiction of the Superior Court on a petition for the homologation

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of a decision of the Board, which decision was however subject to appeal to the Court of Appeal after homologation. The Court of Appeal held that the Superior Court could only consider the procedural regularity of the award, and had to leave it to the Court of Appeal to decide on the merits, on an appeal brought under art. 1066k C.C.P. The decision of the Court of Appeal therefore did not mean that the Public Service Board was generally exempt from the superintending power of the Superior Court with respect to any errors of law it might make, it meant only that, by reason of the right of appeal, such superintending power could not be exercised by the Superior Court on a petition for homologation.

In affirming the judgment of the Superior Court on the merits of the present case, the Court of Appeal similarly failed to consider the judgment on the inscription in law, and the two leading cases on which it was based. Speaking for a unanimous Court, Crête J. said, after agreeing with the reasons of the trial judge:

[TRANSLATION] On the statement of the rule that an error of law does not constitute an excess of jurisdiction, and does not give rise to the kind of remedy which appellant sought to exercise in the case at bar, reference may be made to the following cases, inter alia:

SEGAL v. CITY OF MONTREAL, [1931] S.C.R. 460;

KOMO CONSTRUCTION INC. v. Q.L.R.B., [1968] S.C.R. 172;

QUEBEC LABOUR RELATIONS BOARD v. CANADIAN INGERSOLL-RAND CO. LTD., [1968] S.C.R. 695;

FRANÇOIS NOLIN LTÉE v. Q.L.R.B., [1968] S.C.R. 168.

These cases do not support the statement that an error of law does not give rise to the kind of remedy claimed here by appellant. The four cases cited dealt with applications for writs of prohibition under the old Code of Civil Procedure, not with an action to set aside an award. Because this writ could only be granted for want or excess of jurisdiction, it is obvious that the Court could only consider this one question, and could not rule on any error of law. Furthermore, in the last three cases there was in the relevant statute a privative

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clause, generally excluding any remedy; such is not the case here.

I should also mention that, in City of Montreal v. ILGWU Centre[4], this Court, on an action brought in the Superior Court, ordered the Public Service Board to award, on an expropriation under the Charter of the City of Montreal, a special indemnity for the loss of a tax exemption. The Board had given as the reason for its refusal that it lacked jurisdiction to award an indemnity for such loss. The expropriated party then brought an action in the Superior Court, praying the Court to declare that it was entitled either to the benefit of the exemption in respect of the property acquired to replace the property expropriated, or to an indemnity for the loss of the exemption. The Superior Court granted a declaration in accordance with the first conclusion, and its decision was affirmed by the Court of Appeal. In this Court the judgment was reversed and the alternative conclusion was allowed. In the instant case, the situation is essentially the same: appellant complains that the Board erroneously refused to fix an indemnity for the loss of its rights as a tenant. Nothing in the relevant legislation deprived the Superior Court of its general superintending and reforming power under art. 50 of the former Code of Civil Procedure (art. 33 of the present Code).

It is therefore necessary to examine the reason for the refusal of an indemnity. This was based on art. 418 of the former Charter of the City of Montreal, which was as follows:

418. The city shall not be liable for any indemnity or damages claimed with respect to any building constructed, or improvements, leases or contracts made by any person whatever, upon any land or property, after the confirmation of such plan or map, or of any modification thereof, or addition thereto.

The homologation relied on by the City was ordered by a judgment of the Superior Court dated July 30, 1954, which stated in conclusion:

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[TRANSLATION] DOTH DECLARE that the general plan of the City is modified as follows: by the establishment on the said plan for a period of five years of homologated lines for a parking area, indicating lots No. 593-A and No. 593, located at the southeast corner of Ontario and De Bullion Streets, the said lines being coloured in red and marked with the letters A, B, C and D on plan 0-16 St-Louis, dated February 23, 1954, Exhibit H-l.

It is clearly established that this judgment was registered in the Registry Office and affects the expropriated immoveable. Appellant’s lease is subsequent, since it is dated October 4, 1955, but it submits that the immoveable was not expropriated for a parking area, and that, pursuant to a resolution of the City Council dated June 25, 1958, a judgment of the Superior Court dated July 31, 1958 has erased the homologated lines established in 1954.

On all of that the award simply adopts the “arguments in law” set forth in the memorandum of argument by counsel for the City. The main part of those arguments is as follows:

The homologated lines have not been imposed to the tenant during his occupancy but, on the contrary, he has undertaken to occupy the premises that he rented in full cognizance, legally, of the homologated lines. And Article 1660 of the Civil Code clearly states that the exropriation puts an end to the lease without any recourse against the owner of the leased premises. How can the tenant have more rights against the City than he has against his landlord especially when the City has denounced to him the establishment of the homologated lines.

It is erroneous to say that Articles 410 to 420 (a) inclusive deal with provisions applicable only to streets, lanes, highways and public squares.

Article 413 of the Charter of the City of Montreal, as amended by 2-3 Elizabeth II, chap. 66, section 6, reads as follows:

413. The city since the 1st of May 1899 has the power to lay out, and indicate, upon plans, all the streets, highways, places, squares, parks, existing or projected and also lands or territories required for any municipal purposes whatsoever, and for which the city has the right of expropriation,… Said plans and their modifications or additions, once confirmed by the Superior Court, constitute and have always constituted, with the plans contemplated in articles 418a and

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419 of the charter, the general plan of the city of Montreal.

It is clear that by the reading of the Article 413, as amended, the City can homologate lines for any municipal purposes whatsoever and for which the City has the right of expropriation.

And Article 421, as amended by 14-15 George VI, chap. 72, section 7, states that “the City of Montreal may hereafter, … acquire by mutual agreement or by expropriation, any immoveable … which it may require for any municipal purposes whatsoever, including the establishment of parking grounds or public garages for the storage of motor vehicles, the elimination of slums, unsanitary houses or houses of inferior standard,…

It follows clearly that the City may homologate for parking ground purposes since it has the power to expropriate for parking ground purposes …

The Courts have always interpreted the annulment of homologated lines as an erasure of said lines without giving to such erasure any retroactive effect.

Said lines were, as a matter of fact, erased by Judgment of the Superior Court July 31, 1958. At said date July 31, 1958, Majestic Neckwear Ltd., was no longer a tenant. He had vacated the premises he occupied on August 31, 1957 while the lines were still in effect. As a matter of fact, as of the date of the taking possession of the property, to wit: May 16, 1957, by the fact of the expropriation, Majestic Neckwear was no longer a tenant and was advised accordingly by the City of Montreal in its notice of eviction.

To give a retroactive effect to the erasure of homologated lines and in order to gain damages for the tenant of premises affected by homologated lines at the signing of his lease, would defeat the purposes given by the Legislator to Article 417 of the Charter of the City of Montreal when it says that the City is not bound to carry out the works projected unless so decided by the Council; “nor the City hereafter be liable for any indemnity or damages whatever by reason merely of the confirmation of such plan, or any alteration or modification thereof, or addition thereto.” …

Even if the City expropriates for a municipal purpose different than the one first intended, there remains that it expropriates and the lines have served the purpose for which they had been established: denounce an expropriation. The purpose for which it expropriates is not the important thing.

Be it, as in the present case, for off-street parking or for the purpose of the Dozois Plan, once the building and land are expropriated, the tenant Majestic Neck-

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wear would still be affected by an expropriation which had been denounced by the City, by the establishment of lines the purpose of which was legal either way.

In my view the Board did not err in applying s. 418 of the Charter without making a distinction it does not contain. The only basis on which appellant claimed to be entitled to an indemnity despite the homologated lines established prior to its lease is that the expropriation was ordered for a purpose other than that specified in the resolution and the judgment of homologation. The wording of the City Charter does not appear to relate the effect of homologated lines to the specific purpose for which they were established, and this is not a case where the expropriation was made for resale to an individual, the expropriation was clearly made for a municipal purpose. I fail to see how appellant can contend that its situation is different because the expropriation was made for the purpose of building low-rental housing rather than for a parking area.

The appeal must therefore be dismissed; in the circumstances, however, I feel it should be dismissed without costs.

Appeal dismissed without costs.

Solicitors for the appellant: Meyerovitch & Goldstein, Montreal

Solicitors for the respondent: Péloquin, Badeaux, Allard & Lacroix, Montreal.