City of Hull v. The King

DUFF J.-The appeal should be allowed, and the action Crryo dismissed. Section 392 (a), c. 88, 8 Edw. VII, is in point HuLL and is conclusive.

The legislature had no doubt good THE KING. reasons for this stringent enactment, which makes it very Idington J. difficult for the municipality to incur legal responsibility in respect of contracts for work and materials or for professional services. It is not for us to canvass the reasons for such an enactment nor to look for expedients for evading it.

ANGLIN J.-Seldom, if ever, has a public body presented in this court a defence so palpably devoid of merit as that put forward in this case. That the council of the defendant municipality solemnly undertook by resolution to pay its proportionate share of the cost of the work and services for which it now repudiates liability, that such work and services were duly rendered, and that the municipality has had the benefit of them there has been no attempt to deny. That the city council could now, if so minded, legitimately and properly provide an appropriation to cover the debt which it morally owes to the plaintiff and could thus enable a certificate to be given by the city treasurer that there are funds available appropriated for the particular object for which payment is sought, is not seriously controverted.

But the city council is not so minded. It sets up in answer to the plaintiff's demand the following special provision, added to its charter in 1908 (8 Edw. 7, c. 88) as s. 392a:

No resolution of the council authorizing the expenditure of moneys shall be adopted or have any effect until a certificate of the city treasurer is produced establishing that there are funds available and at the disposal of the city for the service and purpose for which such expenditure is proposed, in accordance with the provisions of this charter.

No contract or agreement whatever shall be binding on the city unless it has been approved by the council.

The city shall not be liable for the price or value of work done, materials supplied, goods or effects furnished of any kind whatever, nor for any fees for professional services, salary, wages or other remuneration, without the special authorization of the city council, nor unless in any case a certificate of the city treasurer is produced establishing that there are funds available appropriated for the particular object for which payment is sought; and no right of action shall exist against the city unless the foregoing formalities are strictly observed, notwithstanding that the city may have benefited by any such contract, agreement, work done, materials supplied, or other services rendered.

In making this statutory provision the legislature no doubt intended to provide a means which would enable the municipal council to resist claims arising out of illadvised and unauthorized undertakings entered upon by a. unwise officials. It had confidence that the privilege so conferred would not be taken advantage of for the repudiation of liabilities incurred by the authority of the council itself and to which the municipality had no moral defence.

That confidence was misplaced.

With deep regret that any Canadian municipal council should be found willing to take a position so humiliating,

I find myself constrained to uphold the defence put forward and to allow the city's appeal because effect must be given to the plain and explicit terms of the statute that, without the city treasurer's certificate

The contract now before us does not concern one of those unimportant matters of frequent occurrence, to which Viscount Haldane alludes in the Mackay Case (1), and in which " convenience almost amounting to necessity " has been held to dispense from compliance with formalities prescribed by statutory provisions not dissimilar in their purport and scope to Art. 392a of the appellant's charter.

The appeal must, therefore, be allowed and the action dismissed.

J. (dissenting).-En 1913, le Conseil Priv6 du

Canada a recommand6 la nomination d'une commission qui prdparerait des plans d'ensemble pour l'ouverture et l'embellissement de parcs et de boulevards dans les cit6s d'Ottawa et de Hull et il a sugg6r6 que le gouvernement f6d6ral payAt la moiti6 du cofit de ces plans et que l'autre moiti6 ffit pay6e par Ottawa et Hull proportionellement h leur population.

Cet ordre en conseil fut transmis aux autorit6s de Hull et le conseil de cette municipalit6, apris avoir d6lib6r6 deux fois sur cette proposition du gouvernement fid6ral, d~cida de l'approuver le 18 juimet 1913.

La proposition du gouvernement ayant 6t6 accept6e par les deux villes int6ressies, un contrat s'est alors implicitement form6 par lequel le gouvernement paierait la moiti6 Crry or du cofit des plans et l'autre moiti6 serait payee par les HuLL deux cit6s proportionnellement h leur population.

THE KINo.

Le 12 septembre 1913, la commission 6tait nommie par Brodeur J. ordre en conseil du gouvernement et le maire de Hull en 6tait nomm6 l'un des membres.

Des plans auraient 6t6 pr6par~s par la commission dans les annies suivantes et sur demande du maire des copies de ces plans auraient 6t6 remises h la cit6 de Hull en 1916. La cit6 de Hull refuse maintenant de payer sa proportion du cofit de ces plans en disant que la resolution qu'elle avait adopt6e 6tait ultra vires parce qu'elle n'avait pas eu au pr6alable un certificat de son tr6sorier 6tablissant qu'elle avait des fonds disponibles h cette fin. Elle invoque a ce sujet 1'article 392a de sa charte qui a 6t6 adopt6 en 1908 et qui se lit comme suit:- Nulle r6solution du conseil, autorisant la d6pense de quelques sommes d'argent, ne pourra 6tre adopt~e ou n'aura d'effet tant qu'un certificat du trisorier de la cit6 n'aura pas 6t0 produit, 6tablissant qu'il y a fonds disponibles et h la disposition de la cit6 pour le service et les fins pour lesquels cette d6pense est propos6e, conform6ment aux dispositions de la pr6sente charte.

Aucun contrat ni arrangement quelconque ne Hera la cit6 A moins qu'il n'ait t6 approuv6 par le conseil.

La cit& ne sera pas responsable du prix ou de la valeur des travaux faits, mat6riaux fournis, marchandises ou effets vendus de quelque sorte que ce soit, ni d'honoraires pour services professionnels, salaires, gages ou autre r6mundration, sans I'autorisation sp6ciale du conseil de la cite, ni, a moins, dans chaque cas, qu'un certificat du tr6sorier de la cit6 ne soit produit, 6tablissant qu'il y a des fonds disponibles et effectis aux fins sp6ciales pour lesquelles le paiement est demand6; et aucun droit d'action n'existera contre la cit6, A moins que les formalit6s ci-dessus n'aient 6t0 strictement observ6es, bien que la cit6 puisse avoir b6ndficid de tel contrat, arrangement, travaux faits, mat6riaux fournis et autres services rendus.

Cette disposition de la charte est extr~mement s~vbre et restreint consid6rablement les relations d'affaires que la cit6 est tenue d'avoir, et mime dans certains cas elle pourra nuire A son credit, mais il ne nous appartient pas d'en scruter les motifs et de connaitre les circonstances qui ont donn6 lieu A cette 16gislation. Elle n'est d'ailleurs que la reproduction presque textuelle des articles 336 et 337 de la charte de la cit6 de Montr6al. (62 Vic., c. 58).

Cette corporation, avec ses nombreux 6chevins et officiers, 6tait expos6e h encourir des dettes que le conseil municipal lui-mgme n'aurait pas sanctionnies; et alors le l6gislateur a cru devoir la prot6ger en d6cr6tant que le conseil municipal seul pourrait lier la corporation et que ar mime dans certains cas les r6solutions du Conseil seraient sans effet si le tr6sorier ne certifiait pas qu'il y avait des fonds disponibles.

J. Dans le cas actuel. nous avons une r6solution du conseil de Hull approuvant le contrat qui s'est fait entre le gouvernement f6d6ral et les cit6s d'Ottawa et de Hull par lequel des plans devaient 6tre pr6pars pour l'embellissement de ces deux municipalit6s.

Etait-il nicessaire que le conseil de Hull efit un certificat de son trisorier avant d'approuver ce contrat?

L'appelante pr6tend que oui et elle se base particulibrement sur le troisibme paragraphe de Particle 392 a. Je ne crois pas cette pr6tention bien fond6e. Cet article nous met on presence de trois cas distincts; 1. autorisation du conseil pour un paiement d'argent; 2. confection de contrats par la cit6; 3. travaux qui peuvent donner lieu A une r6clamation quantum meruit. II est g~n6ralement admis que le premier cas ne se pr6sente pas dans la cause actuelle.

Le conseil, par sa rdsolution du 18 juillet 1913, n'ordonnait pas le paiement d'aucune somme d'argent, et par cons6quent, le certificat du trisorier n'6tait pas n6cessaire.

Si on voulait 6tendre cette premibre partie de l'article A toutes les conventions ou A tous les r6glements qui pourraient occasionner une d6pense d'argent, on atteindrait un r6sultat bien 6trange.

Ainsi, par exemple, la cit6 est autoris6e, je crois, A acheter du pouvoir 6lectrique pour 6clairer ses rues et ses 6difices.

Il est important que ces contrats d'6clairage couvrent plusieurs ann6es. Comment pourrait-elle avoir un certificat de son trisorier pour toute le p6riode du contrat?

Ce serait impossible, vu que les revenus disponibles ne sont que pour les d~penses d'une ann6e.

Des contrats de la nature de celui qui nous occupe sont valides sur simple approbation du conseil municipal et il n'est pas necessaire qu'il y ait un certificat du tr6sorier.

C'est ce que le h6gislateur a voulu couvrir en disant dans la deuxibme partie de son article 392 (a) " aucun contrat ni arrangement quelconque ne liera la cite A moins qu'il n'ait 6t6 approuv6 par le conseil." Alors si le conseil l'approuve, la cit6 est libe. C'est ce qui s'est produit dans le cas actuel.

Par la troisibme partie de 1'article, le l6gislateur a voulu K

*eviter ces r6clamations nombreuses qui devaient se faire J. contre la corporation et qui donnaient lieu h l'action quantum meruit parce que la cit6 en avait profit6 et parce que certains 6chevins ou officiers z6l6s avaient fait faire certains travaux ou ordonn6 l'achat de certains mat6riaux. La lgislature a voulu mettre fin A ces abus. Voilh toute la port6e, suivant moi, de ce dernier paragraphe.

En tant que les contrats sont concern&s,

I'article n'enl~ve le droit d'action que dans le cas oh ils n'ont pas 6t approuvbs par le conseil.

Il n'y a pas de doute que par les dispositions de la charte la cit6 avait le droit de faire des plans non-seulement pour amiliorer son propre territoire mais aussi en dehors (arts. 92 et 144).

L'appelante pr6tend aussi qu'un riglement aurait 6tre adopt6 pour autoriser ce contrat. Je ne vois pas de grande diff6rence entre la r6solution qui a td adopt6e et la disposition qui se trouverait incorpor6e dans un r~glement.

La question est venue devant le conseil A deux reprises diff6rentes. Nous ne savons pas d'ailleurs si le conseil de vile a d6cr6t6 que deux ou trois lectures des riglements municipaux devaient 6tre faites avant leur passation ainsi qu'elle y 6tait autoris6e par 'article 4400 S.R.P.Q. (1908). I s'agirait tout au plus, si un riglement 6tait requis. d'une insuffisance de ddsignation qui ne saurait invalider dans l'esprit g6ndral de la loi la decision du conseil. (arts 4185 et 4186 S.R.P.Q.).

Pour toutes ces raisons, je considbre que l'appelante a 6t6 16galement condamnbe A payer la somme qui lui est r6clam6e.

L'appel doit Stre renvoyd avec d6pens.

J.-The facts of this case are not in dispute. On June 5, 1913, an order in council was adopted by the Dominion Government on a memorandum submitted by the Minister of Finance who stated that he had had under consideration the need for the adoption of a comprehensive scheme or plan looking to the future growth and development of the cities of Ottawa and Hull and their environs, particularly providing for the location, laying and orna- Crrr O mentation of parks and connecting boulevards, the location and architectural characteristics of public buildings and Ta adequate and convenient arrangements for traffic and J. transportation within the area in question. And the minister recommended that a commission be constituted, consisting of at least six members, including the mayors of Ottawa and Hull, charged with the duty of taking all necessary steps to draw and perfect such a plan for the purpose of the beautification and systematic development of the two cities, to carry out which plan the cities of Ottawa and Hull and the Ottawa Improvement Commission together with the transportation and traffic companies would be required to cooperate with a view to its gradual completion. It was added that it would seem equitable that the Government should pay half the cost of preparing such a plan and that the other half should be paid by the two cities jointly and ratably according to population.

The minister therefore recommended that the civic authorities of the respective cities be invited to express their views as to the proposals made, to say whether they were willing to bear half of the expense involved and to assent to the appointment of their respective mayors on such commission.

The minister sent a copy of this order in council to the mayor of Hull, requesting that the city council express its view as to the proposals made, and if the proposals met with its approval to say whether the city was willing to bear its proportion of the expense as suggested and to consent to the appointment of a representative of the city on the commission as proposed.

A special meeting of the city council of Hull took place on June 20, 1913, and the council adopted a resolution expressing its approval of the scheme and named a committee to meet with the members of the committee of the city council of Ottawa, the Ottawa Improvement Commission and the members of the Privy Council in order to discuss the proposals, this committee to report to the council. The committee met the bodies referred to and reported to the Hull council, and at a meeting of the latter on July 18, 1913, the following resolution was adopted:

A A copy of this resolution was sent to the Minister of Finance by the city clerk.

Thereupon another order in council was adopted on September 12, 1913, creating an honorary commission composed of the mayors of Ottawa and Hull and of four other members, to take all necessary steps to draw up and perfect the scheme or plan as proposed in the first order in council, the commission being authorized to employ clerical and other assistants, to engage city planners, landscape gardeners, architects, engineers and other experts, to summon before them witnesses and generally to take such steps as might be necessary to accomplish the objects of the commission.

The mayor of Hull acted on this commission which prepared an elaborate report, translated and printed in French and in English, with plans, etc., Hull duly receiving copies thereof. The city of Hull asked permission to use the plans and plates for the advertisement of the city, and this permission was granted and presumably the plans were used by it.

The total cost amounted to $75,809.08, of which the Government assumed one half, and the other half, to wit $37,904.54, was payable by Ottawa and Hull jointly and ratably according to their population, Ottawa's share was $31,344.22 and Hull's $6,560.32.

The accounts were duly sent to both cities in August, 1918. Ottawa has paid its full share. Hull, in reply to numerous requests, put off payment on one pretext or another, until at last this action was taken by the Government to compel payment. It is admitted by the appellant that if there be any legal liability on its part to pay the respondent anything, the amount payable by it is $6,560.32, with interest from the 20th August, 1918.

The plea of the city of Hull is a purely technical one. It does not pretend that the expenditure was not incurred in conformity with the orders in council and the approval it had expressed, but in order to escape payment, it invokes certain provisions of its charter, and the failure by it to take the measures prescribed before a financial liability can OF be incurred by the city.

I cannot help regretting that the city of Hull has seen fit THE to raise this technical objection in order to resist payment Mignault J. of its share of the expenditure incurred. Its excuse is that it did not take the steps required by its charter in order to assume this obligation. It could easily have taken these steps, and could do so now, and its neglect in that regard is deliberate.

The city of Ottawa has paid its full share, nearly five times greater than that of Hull, of the expenditure which both Ottawa and Hull authorized by their city councils, thdis establishing a painful contrast between the conduct of the two cities. This, however, does not dispose of the difficulty, nor would it justify the court in disregarding the provisions of the charter of the appellant corporation which the plea invokes, if these provisions are an answer to the action of the respondent.

It therefore remains to be seen whether, in view of the statutory provisions invoked by the city of Hull, the action of the Government can be maintained.

The city of Hull was incorporated under a statute of the province of Quebec, 56 Victoria, ch. 52, to which many amendments have since been made. By 8 Edward VII, ch. 88 (1908), section 392a, which read as follows, was added to the charter:

392a. No resolution of the council authorizing the expenditure of any moneys shall be adopted, or have any effect until a certificate of the city treasurer is produced, establishing that there are funds available and at the disposal of the city for the service and purposes for which such expenditure is proposed, in accordance with the provisions of this charter. No contract or agreement whatever shall be binding upon the city, unless it has been approved by the council.

The city shall not be liable for the price or value of work done, materials supplied, goods or effects furnished of any kind whatever, nor for any fees for professional services, salary, wages or other remuneration, without the special authorization of the city council, nor unless, in every case, a certificate of the city treasurer is produced establishing that there are funds available appropriated for the particular object for which payment is sought; and no right of action shall exist against the city, unless the foregoing formalities are strictly observed, notwithstanding that the city may have benefited by any such contract, agreement, work done, materials supplied or other services rendered.

Here the approval of the city council was given by the resolutions adopted on June 20 and July 18, 1913. What 67559-31 was wanting was a certificate of the city treasurer establishing that there were funds available and at the disposal of the city for the service and purposes for which Kia. the expenditure was proposed. That the appellant could J. have observed this formality is beside the question, for if the omission of the certificate that funds were available for the expenditure contemplated is a fatal omission, if in the words of section 392a there is no escape from the conclusion that the respondent's action cannot be maintained.

After the most anxious consideration, I cannot place any meaning on section 392a other than that it is an absolute bar to any claim to hold the appellant liable for the expenditure incurred under the orders in council. . In my opinion, with deference, the debt claimed by the respondent cannot be treated, as the learned trial judge somewhat suggested, as a "judicial obligation" within the meaning of section 393 of the appellant's charter, which authorizes the city council in cases of urgent necessity, either for the purpose of meeting a " judicial obligation" or for other unforeseen or uncontrollable causes, to procure the necessary funds to meet obligations of that character by such means as it may deem advisable. There can be no "judicial obligation" without a judgment enforcing a liability, and there can be no judgment against the city in a case where the statute states that no right of action shall exist.

It may be added that the appellant corporation has a very wide power to provide by by-law for municipal services of all kinds which entail the expenditure of public moneys (sect. 92 of the charter), and an appropriation of the amounts necessary for these purposes is made yearly in the month of February (sect. 390).

To such by-laws, paragraph 1 of section 392a does not apply, for its whole scope is to guard against resolutions (and not by-laws) authorizing the expenditure (and not merely the payment) of public moneys. Paragraph 2 of section 392a requires the approval of the city council before any contract or agreement whatever shall be binding on the city,

1W and should be read with paragraph 3. The latter para- Crr o graph, in the case of work done, materials supplied, goods or effects furnished of any kind whatever, or fees for professional services, salary, wages or other remuneration, requires two formalities before the city can be held liable, viz., the special authorization of the city council and the production of a certificate of the city treasurer that funds are available. The special authorization of the city council would generally form a contract between the city and the person or corporation performing the work or furnishing the goods or materials, but, notwithstanding what is stated in paragraph 2, and saving the case of by-laws under section 92, it would still be necessary to obtain the certificate of the city treasurer. I think, as I have said, that paragraph 2 must be read with paragraph 3, and not given such an effect as to render in most cases the latter paragraph meaningless.

The result is that the appeal must be allowed and the respondent's action dismissed.

Appeal allowed with costs.

MOTION to quash an appeal from the judgment of the Court of King's Bench, appeal side, province of Quebec, affirming the judgment of the Superior Court and dismissing the appellant's action.

The respondent moved to quash the appeal on the ground of acquiescence in the judgment appealed from by payment of the costs of the Court of King's Bench and the Superior Court.

concur in dismissing with costs the respondent's motion to quash on the ground that the payment of costs by the appellant under the circumstances was not such a voluntary act as would indicate an intention to acquiesce in the judgment and forego his right of appeal therefrom.

J.-The respondent moves to quash the appeal herein on the ground of acquiescence on the part of the appellant in the judgment appealed from.

The alleged acquiescence consists simply in the appellant having paid the costs, or asked the surety to pay the costs, awarded the respondent in the court below.

The payment was made in response to repeated threats that unless the costs were paid proceedings would be taken to enforce payment either from appellant or his surety. I am of the opinion that payment of costs under such circumstances is not an acquiescence in the judgment which would bar appellant's right to come here.

I think, therefore, the motion should be dismissed with costs.

J.-I can find no evidence of an intention on part of the appellant to forego his right of appeal or of facts which in point of law must be treated as abandonment of his right of appeal. My conclusion is that the payment j. was made under a threat of. execution.

Nevertheless, I should not wish to commit myself to the proposition that payment of a judgment in response to a demand of the judgment creditor without an express threat of execution, or initiation of execution proceedings, could, save in very exceptional circumstances, properly be treated as a voluntary payment.

J.-The fair conclusion from the material before us would appear to be that the appellant caused the costs, for which the respondent had judgment against him, to be paid under threat of execution.

That payment was not such a voluntary act on his part as would indicate an intention to acquiesce in the judgment and forego his right of appeal therefrom.

The respondent's motion to quash cannot succeed and should be dismissed with costs. . J.-The respondent moves to quash the appeal on the ground of acquiescence in the judgment appealed from by payment of .the costs of the Court of King's Bench and of the Superior Court on the dismissal of the appellant's action.

With the consent of the appellant, the costs were paid by The United States Fidelity & Guarantee Company, which had given security for these costs at the time of the appeal to the Court of King's Bench. It appears however by the correspondence between the attorneys of the two parties that these costs were paid after the respondent's attorneys had threatened to issue execution against the appellant if they were not paid. They wrote to the surety, to whom they had been referred by the attorney for the appellant, demanding payment and stating that if they did not receive a satisfactory answer before a stated date they would immediately have the appellant's property seized. It was under these circumstances that the payment of the costs was effected.

Although no reservation of the right of appeal was made, which of course would have been more prudent, my opinion is that this was not a voluntary payment from which acquiescence in the judgment can be inferred. I find a decision of la cour de cassation, of the 28th May, 1867 (Dalloz, wARR.

1867.1.215) very much in point. It was held that Aglin J le paiement des frais d'un arrit, apris signification de l'arrAt et de 1'ex6cutoire de d~pens, et sur une menace 6crite d'ex6cution forc6e, n'emporte pas acquiescence h cet arrt, et, ds lors, ne rend pas non recevable le pourvoi en cassation forme contre le mime arrit.

I would therefore dismiss the motion with costs. Motion dismissed with costs. Gregor Barclay for the motion.

C. M. Cotton contra.