Angrignon v. Bonnier

Per Cannon J.-The appellant, before and after his election as alderman, had a pecuniary interest in the property leased to the city, and consequently in a contract with the city, contrary to the charter. Per Duff CJ. and Rinfret, Crocket and Hughes JJ.-The language of the statute is not the language of lawyers; the phrase "interested in " has no technical signification; effect must be given to it according to the common usage of men.

Per Cannon J.-The nature and the extent of such "interest"

must be established by the facts in each case; and whenever an alderman finds himself in such a position that he must choose between the interest of the city in a contract and his own, he is instantly disqualified. Per Duff C.J. and Rinfret, Crocket and Hughes JJ.-In this case, there is " concert," within the meaning of the Lord Chancellor's judgment in Norton v. Taylor, [19061 A.C. 378, between the appellant, as alderman, and his daughter, as a contractor with the city, by which moneys paid by the city under the contract were to be, and in fact were, transferred to the alderman in payment of a debt owing to him by the contractor.

S.C.R.]

Bench, appeal side, province of Quebec, reversing the judgment of the trial judge, Surveyer J. and maintaining a petition for a writ of quo warranto issued against the appellant, asking for his disqualification as alderman of the city of Montreal.

The material facts of the case are fully stated in the head-note and in the judgments now reported.

C.J.-This appeal arises out of a proceeding alleging the disqualification of the appellant to hold the office of an alderman for the city of Montreal.

In the year 1931 the appellant held the office of alderman and was re-elected in April, 1932. Previous to his election he owned lots on Allard street and, in 1931, he built a three-storey house thereon. Some time in the early part of the year 1931 he suggested to the chief of police that this house would be suitable for a police substation. The chief of police caused the property to be examined. The appellant, who was then an alderman, accompanied the inspector who conducted the examination. The inspector reported that the creation of such a substation would provide increased protection.

The superintendent of police reported that the appellant had told him there was an understanding that the city would rent the property at $125 per month.

After inspector Kavanagh's visit to the property, the appellant again discussed the matter with the chief of police and was told by him that the place would be suitable for a substation. On the 21st of April, 1931, the chief of police recommended to the director of services of the city of Montreal the establishment of a substation there, citing in support of his recommendation the opinion of inspector Kavanagh and his approval of the proposal.

Later, the appellant saw Mr. Bray, the president of the executive committee of the city of Montreal, and provisionally arranged for a lease by the city at $125 per month.

On the 23rd of April the director of services wrote to the city's notary giving instructions to prepare a lease of the property, and, on the 27th of April, all arrangements B for the lease having been completed, the appellant transferred the property to his daughter Mrs. April for the sum of CJ. $9,500, payable in five years, nothing being paid on account. On the 27th of May, 1931, the executive committee submitted to the council a draft of a lease by Mrs. April to the city, and this report was adopted on motion by another alderman which was seconded by the appellant. On the 6th of June, 1931, the lease between the city and Mrs. April was signed; it was a lease for a term of ten years at a rental of $125 per month for the first five years, and $150 per month for the last five years. The city of Montreal paid the rent of $125 per month, by cheque to the order of Mrs. April; and all the cheques down to the 15th of April, 1932, when the present proceedings were instituted, were endorsed and delivered by Mrs. April to the appellant, with the exception of the cheque for December, 1931, which was used by the daughter for exceptional family expenses. All the cheques delivered to the appellant by Mrs. April were deposited in his banking account and credited on the purchase price of the property.

In July, 1931, the chief of police reported to the director of services that he had been induced by error to assent to the establishment of a substation and that no substation was required on Allard street, and that the lease ought to be cancelled. In October, 1931, the police inspector for the division where the property was situated reported that the property was not in a sanitary condition; that the heating system was insufficient; that the building was not finished; and that there was water at all times in the basement.

Nevertheless, the city took possession of the property in January, 1932. Rent has been paid by the city at the contract rate from the 1st of May, 1931; and on the 4th of April, 1932, the date of the appellant's reelection as alderman, the lease was a subsisting lease. The question for our determination is whether or not the appellant was disqualified, by force of paragraph (g) of section 25 of the charter of the city of Montreal, which enactment is in these terms:

B .

The precise question is whether, while holding the office of alderman, the appellant was " directly or indirectly interested " in the lease, to which, by its terms, his daughter and the city were the parties.

It was argued by the respondent that the whole transaction was simulated, and that the daughter was, in respect of the ownership of the property, as well as in respect of the lease, a mere pr6te-nom for her father, the appellant. The trial judge, on this issue, found against the respondent, as well as four judges of the Court of King's Bench. These learned judges held that the sale to the daughter was a real sale and that the daughter was the real party to the lease to the city. Their view was that the activities of the appellant, in respect of which he received no remuneration, in superintending the building of the house, were naturally explained by the parental relationship; and that this relationship accounted, at least in large measure, for his efforts in procuring the letting of the property to the city.

We perceive no satisfactory ground for doubting that this is substantially in accord with the actual facts. On the other hand, this view, that these transactions were real transactions, establishing legal relations between the father and the daughter, and between the city and the daughter, necessarily involve the proposition that the ostensible obligation on the part of the daughter to pay the purchase money was a legal obligation which the daughter was expected to fulfil.

The majority of the judges in Quebec have fully accepted the contention that the house was built for the daughter, but that she was to pay the purchase price of it, the amount which corresponded at least approximately to the aggregate of the sums expended by the appellant; as well as additional sums expended by him, for example, in connection with heating arrangements.

But there seems to be no room for doubt, and, indeed, it is not disputed, that (since the daughter was without resources, and had no other means for providing for the payment of these obligations to her father) it was contemplated by all parties that the daughter would be enabled to discharge these obligations out of the moneys received by her as rents, and that the rents would be devoted to that purpose.

One of the sisters who was called by the respondent gives this evidence:

CJ. This testimony must not be given an extreme construction. It ought not to be read as establishing that there was an explicit contract between the father and daughter as to the application of the rents; and we are not disposed to hold that there was a legally enforceable duty resting upon the daughter to apply the rents in pursuance of the expectation and intention of the family who seem to have been fully conversant with the arrangements.

In this sense we think the finding of the trial judge, in which Mr. Justice Letourneau concurred, that the daughter was free to dispose of the rents, can be sustained.

Nevertheless, we do not think it can be seriously disputed that the appellant, his daughter, as well as the family generally, counted upon the disbursements made by the father in the construction of the building, that is to say, the amount of the purchase price, which constituted debt from the daughter to the father, being reimbursed and paid to the father by the application of the rents to that purpose. At the conclusion of the argument I was disposed to think that, since the facts in evidence did not point to a legally enforceable arrangement between the father and the daughter touching the application of the rents, the case was not within the statute. On further reflection, I have reached the conclusion that the existence of a common intention and expectation concerning the disposition of the rents, which was acted upon by the transfer of cheques for rent to the father by the daughter, as already explained, down to the commencement of the proceedings in quo warranto, shews that the father was " interested in the lease " within the purview of the statute.

. The appellant, when asked to explain why, after commencement of the proceedings, he had left the rent in the hands of Madame April, gives this answer:

Q. Voulez-vous dire pourquoi aprbs cela les cheques sont all6a au compte de votre fille?-R. Parce que mon gendre a perdu sa position et que ma fille 6tait malade, elle est gravement malade, elle est aux incurables, peut-6tre pour ne pas en sortir. Je voudrais bien qu'elle reviendrait, je prends tous les moyens. Je lui ai dit: " Prends tout ton argent et soigne-toi ". Son mari, il faut qu'il mange, il n's rien h faire. His answer by the appellant who insists, throughout his evidence, that the rents were the property of Madame April, rather implies that the retention of the rents by her in the special circumstances was a concession by him. Again, this passage in his evidence is not without significance:

R. C'6tait ma fille qui recevait cela pour moi, je les endossais apris ma fille.

Elle les endossait, ils 6taient faits A son nom, les chiques n'6taient pas faits A mon nom.

Q. Vous les endossiez et vous les d6posiez

, votre compte?-R. Apris qu'ils avaient 6t0 endoss6s par ma fille.

Q. Vous les d6posiez A votre compte?-R. Oui.

Q. Alors, la ville payait votre propri6t6?

(Me L. E. Beaulieu C.R., avocat de l'intim6, s'oppose & cette question comme ill6gale).

Q. C'est bien 1'argent de la ville qui allait dans votre compte en paiement de votre propri6t6?

(Me L. E. Beaulieu C.R., avocat de I'intim6, s'oppose h cette question comme illfgale).

Turning now to the effect of the statute. The courts have had to consider similar provisions on various occasions during the past century. I refer to some of the judgments which have been delivered in cases involving the construction of similar words, not as authorities governing us in the construction of the Quebec statute, but as indicating, as I think they do, the point of view from which the consideration of the enactment before us is to be approached. In Towsey v. White (1) Bayley J. said,

The great object of the Legislature was to prevent any bargaining between the trustees and the contractors, so as to give the former an interest adverse to their duty.

In Nutton v. Wilson (2) Lindley L.J. said,

To interpret words of this kind, which have no very definite meaning, and which perhaps were purposely employed for that very reason, we must look at the object to be attained. The object obviously was to (1) (1826) 5 B. & C. 125 at

(2) (1889) 22 Q.B.D. at 744, 748. In Norton v. Taylor (1), Lord Loreburn, L.C., construing a statute of New South Wales, by which any person holding civic office was penalized, where he " becomes directly or indirectly

* *

* knowingly engaged or interested in any contract * with or on behalf of the council," said,

We think the indicia adverted to in this passage, and in the observations of Lindley L.J., afford the most satisfactory tests in the circumstances of this case. The language of the statute is not the language of lawyers. The phrase " interested in " has no technical signification; effect must be given to it according to the common usage of men. Sufficient has been said to support the conclusion that here we have " concert," within the meaning of the Lord Chancellor's judgment, between an alderman and a contractor with the municipality, by which moneys paid by the city under the contract were to be, and in fact were, transferred to the alderman in payment of a debt owing to him by the contractor. No doubt, as has already been said, the appellant, throughout, had his daughter's welfare at heart. In negotiating the lease, we may assume that he was actuated by his concern in seeing her comfortably provided for; but it is impossible to escape the conclusion that he had in view the employment of the moneys paid by the city to reimburse his expenditures in constructing and equipping the building. Nor is there any doubt that in all this his daughter's view and intentions, in this respect, coincided with his own.

The appellant was, we repeat, by "concert"

between himself and the lessee "interested in the lease" in the pertinent sense.

The appeal will be dismissed. But, since the respondent can only succeed upon a construction of the statute not advanced by him at any stage, we think he should be subjected to the terms that there shall be no costs of this appeal or of the proceedings in the courts of Quebec. J.-La Cour du Banc du Roi de la province de Qu6bec a accord6 permission sp~ciale de nous soumettre son jugement du 28 octobre 1933 renversant, avec le dissentiment de l'honorable juge-en-chef Tellier et de 1'honorable juge L6tourneau, le jugement de la Cour Sup6rieure (Surveyer, J.) et d6clarant l'appelant d~poss6d6 et exclu de son si~ge comme 6chevin. L'article 25, par. (g), de la charte de Montreal se lit comme suit:

Comme le dit le jugement permettant 1'appel, cet article ne fait que confirmer un principe de droit public 616mentaire, h savoir que personne occupant une position de confiance, comme celle d'6chevin, ne doit continuer dans l'exercise de ses fonctians si son int6rit particulier vient en conflit avec son devoir officiel.

Pour risoudre la question posde, il est bon de faire l'historique de cette disposition de la charte de la cit6 de Montrial.

En 1890, dans la cause de Stephens v. Hurteau (1), il a 6t6 jug6 qu'un 6chevin qui s'engage h fournir des matiriaux requis par un entrepreneur pour l'ex6cution d'un contrat avec la cit6 de Montreal a un intirit dans tel contrat qui tombe sous la prohibition du statut 37 Vict. (Q.) c. 51, s. 22, et le rend incapable d'occuper son siege comme 6chevin. A la page 157, le juge-en-chef Johnson nous dit: tage from such contract or agreement, shall immediately become disqualified and cease to hold his office.

Azca Then came the Act of 1889 (52 Via. c. 79), a consolidation of the Act constituting the charter of the city-which never repealed the Act of 1874; but on the contrary enacted by its 284th section, that only Acts inconsistent with the Act of 1889 were repealed; and even in that case the Cannon J. repeal was not to affect anything done under the Acts repealed. Well, this Act of 1889, by its 25th section, reproduced the provisions of see. 22 of the Act of 1874, as far as disqualification resulting from directly or indirectly becoming a party to, or security for, any contract or agreement with the city; but when it came to disqualification as resulting from deriving any interest, profit or advantage from such contract or agreement, the later Act added the words, to the extent of $100.

Cette section 25, telle qu'interpr6tie dans cette cause de Stephens v. Hurteau (1), fut remplac~e par 55-56 V. c. 49, s. 26, par la suivante:

La charte fut revis6e et consolidde en 1899, par 62 Vict. c. 58. La clause 37 d6qualifie toute personne qui directly or indirectly becomes a party to or security for any contract or agreement with the city, for the performance of any work or duty or for goods to be supplied to it, or directly or indirectly has any interest in, or derives any profit or advantage from, such contract or agreement, or is a party to or directly or indirectly interested in any claim or in any suit or legal process or in any expropriation or other case in which the city, if condemned, will have to disburse any moneys, or is the attorney for the claimant or for the plaintiff in any such process, suit or case, or is a member of a firm acting as attorneys or one of the members whereof acts as attorney as aforesaid, etc.

Cet article 37 de 62 Viet. c. 58, fut, h son tour, amend6 par 9 Ed. VII, c. 81, sec. 3, et remplac6 par 4 Geo. V, c. 73, sec. 4, modifi6 par 8 Geo. V, c. 84, s. 16, et abrog6 par 11 Geo. V, c. 112, s. 18 (1921).

Cette mime loi de 1921 (c6dule B, s. 10) art. 10, nous donna Particle 25 comme suit:

h. if, as an advocate, he conducts or if the firm to which he belongs, or any of its members, conducts any case against the city before a court of justice, or in connection with an expropriation;

(1) (1890) M.L.R. 6 S.C. 148.

S.C.R.]

v.o

C'est le texte qu'il s'agit d'interpriter.

Il serait assez difficile de donner une d6finition exacte et pr6cise de l'int6r~t en question.

Il est 6vident qu'il ne s'agit pas seulement de l'intirft requis pour avoir un droit d'action contre la cit6; car, dans ce cas, la deuxibme partie de la prohibition serait inutile. II s'agit d'4tablir par les faits de chaque cause la nature et l'6tendue de l'intir~t; et chaque fois qu'on arrive A la conclusion que l'6chevin se trouve A avoir A choisir entre l'int6r~t de la cit6 dans un contrat et le sien, il est inm6diatement d6qualifi6. Mme si, en fait, 1'acte de vente de la propri6t6 lou6e A la cit6 de Montreal consenti par l'appelant A sa fille est r6el et non simul6, cela aurait simplement pour effet d'61iminer la premibre prohibition du sous-paragraphe g, celle qui l'empiche d'6tre partie directement ou indirectement A un contrat avec la cit6.

Mais pourquoi avoir retard6 jusqu'au 24 avril 1931 pour passer l'acte authentique de cette vente que 'on veut faire remonter jusqu'A l'6t4 de 1930?

Le rapport favorable de Kavanagh est du 8 avril 1931.

Le rapport du directeur de police porte la date du 21 avril, celui du directeur des services fut sign6 le 23 avril demandant au notaire Beaudoin de pr6parer le bail.

D~s lors, l'affaire pouvait 6tre consid6r6e comme bacl6e par l'appelant; et il semble raisonnable de d6duire de ces circonstances la conclusion que ce n'est qu'alors, le 27 avril 1931, qu'il s'est cru suffisamment garanti pour pouvoir vendre par acte authentique A sa fille qui 6tait devenue, grace A ses d6marches comme 6chevin, capable de lui payer le prix de vente A mime les loyers qu'elle retirerait chaque mois pendant dix ans de la cit6 de Montr6al.

Je ne puis me convaincre que l'appelant, criancier hypothicaire pour la pleine valeur de cette propri6t6, n'6tait pas, dbs lors, au moins indirectement, int6ress6 a ce que la ville de Montrial paie A sa fille cent vingt-cinq dollars (8125) par mois pendant cinq ans, et cent cinquante dollars ($150) par mois pendant les cinq ann6es suivantes, si r6ellement sa fille, qui 6tait absolument sans moyens, devait lui rembourser le prix de cet immeuble. La charte de Montr6al est plus rigoureuse sous ce rapport que le code municipal ou la Loi des cits et villes. La 16gislature avait sans doute ses raisons pour mettre les 6chevins de Montreal h 1'abri de toute tentation. Mme s'il n'avait pas encore comme cr6ancier hypoth6caire un jus in re dans cet immeuble, il n'en aurait pas 6t6 moins intiress6, comme promettant vendeur, A obtenir, par ses d6marches, du chef Ca de police et des autres officiers les recommandations voulues pour l'tablissement d'un nouveau poste de police dans la maison de rapport en question. Je suis fortement d'avis qu'il ne peut y avoir de doute que, lorsqu'il s'est agi d'autoriser l'adoption du rapport de l'ex6cutif par le conseil de ville, le 27 mai 1931, 1'6chevin Angrignon a fait preuve d'une ignorance de la loi, ou d'une ind6licatesse peu ordinaire, en secondant audacieusement la motion de l'6chevin Biggar adoptant le rapport qui assurait la location de cette propridt6 par la cit6 pour dix ans h un prix qui, pour le moins, 6tait r6mun6rateur et lui fournissait un moyen presque certain de se faire payer les d6bours6s qu'il pr6tend avoir faits pour installer sa fille et que cette dernibre, d'aprbs l'acte de vente, devait lui rembourser-bien qu'elle ffit sans moyens de le faire autrement,-que par ce que cet immeuble pouvait rapporter.

Et, de fait, l'appelant a admis que chaque ch6que de $125, depuis juin 1931, sauf celui de d6cembre, est all6, jusqu'd avril 1932, date des proc6dures, avec l'endossement de sa fille, au cr6dit de 1'appelant a la banque, en d6duction du prix de la propri6t6 loude.

Comme je l'ai dit plus haut, la charte de la cit6 est plus s6vire aujourd'hui qu'elle ne l'6tait en 1890, lors de l'affaire de Stephens v. Hurteau (1).

Ce dernier a t6 ddqualifi6 parce qu'il aurait vendu du bois pour le pavage de la rue Craig A un entrepreneur de la cit6 de Montr6al, dont il 6tait ainsi devenu le cr6ancier.

La loi, A cette 6poque, prohibait tout intir~t, profit ou avantage de 1'6chevin dans un contrat. Plus tard, on a sp6cifi6 qu'il s'agissait d'un contrat " for the performance of any work or duty." Puis on a ajout6 "for goods to be supplied to the city." Et enfin, nous avons le texte actuel qui ne sp6cifie rien mais parle de n'importe quel contrat " quelque soit l'objet de ce contrat".

La disposition actuelle, en retranchant les mots " profit " et " avantage ", qui, jusqu'h un certain point, d6limitaient le sens du mot " int6rit ", me parait plus compr6hensive. Avoir un int6r~t dans une affaire n'est pas prendre l'intgrit de quelqu'un par simple bienveillance, sentiment qui fait que l'on desire et poursuit le bien de ANcoraos quelqu'un, que l'on prend part A ce qui lui arrive d'agr6able ou de ficheux-mais sans d6sir 6goiste d'un profit, d'un avantage personnel, sans consideration pour son bien propre Cannon J. et exclusif.

Pour moi, -1'appelant, dans cette affaire de bail A la cit6 de Montr6al, n'a pas agi par simple bienveillance pour sa fille, A laquelle il pouvait lgitimement s'int6resser; mais il s'6tait auparavant assur6 un droit 6ventuel A un b6n6fice personnel A mime les loyers provenant de la cit6-dont il avait jur6 de prot6ger les intirfts. De plus, il s'6tait r6serv4 par l'acte de vente une "hypothbque sur l'immeuble lou6 en outre du privilige de droit ". II avait donc, avant, lors et aprbs son 6lection comme 6chevin, un int6rit picuniaire dans la propri6t6 loude A la cit6-et, par cons6quent, dans un contrat avec la cit6; que cet int6r~t soit direct ou indirect, peu importe, dit la charte de Montr6al.

Cette disposition est de droit public et les autorit6s anglaises recueillies dans Biggar, Municipal Manual, 6dition de 1900, pp. 109 et 110, sont A consulter.

'

Dans Stephens v. Hurteau (1), le juge-en-chef Johnson r6fire (p. 163) A City of Toronto v. Bowes (2).

Je trouve dans le rapport de cette cause un citation tir6e de Governor and Company of York Building Society v. Mackenzie (3), qui pose, je crois, le principe qui trouve son expression dans larticle de la charte de Montr6al qui nous est soumis: The office imports a natural disability, which, ex vi termini, imports the highest quality of legal disability.

A law which flows from nature, and is founded on the reason and nature of the thing, is paramount to all positive law. This is not an arbitrary or local regulation; it is the constitution of nature itself, and is as old as the formation of society, and of course it must be universal. It proceeds from nature, and is silently received, recognized, and made effectual, whereever any well regulated system of civil jurisprudence is known.

The ground on which the disability or disqualification rests is no other than that principle which dictates that a person cannot be both judge and party.

"No man can serve two masters."

He that is entrusted with the interest of others cannot be allowed to make the business an object of interest to himself; because, from the frailty of human nature, one who has the power, will be too readily seized with the inclination, to use the opportunity for serving his own interest at the expense of those for whom he is entrusted. The danger of temptation, from the facility and advantages of doing wrong which a particular situation afford, does, out of the mere necessity of the case, create a disqualifi- (1) (1890)

M.L.R. 6 S.E. 148;

(2) (1854)

4 Grant's Ch. Rep. M.L.R. 5 S.E. 1.