An action a ratepayer of the City of Montreal to compel the members of the finance committee of the city council to reimburse the city for moneys which it was alleged they authorized to be illegally expended and asking for their disqualification under section 338 of the "City Charter" is not a proceeding in quo warranto under the provisions of articles et seg. of the of Civil Procedure.
By section 334 of the charter Edw. VII. the city council of Montreal must at the end of each year appropriate the revenues of the city for the services during the coming year, including a reserve of five per cent. of the total revenues, three per cent. of which to provide for unforeseen expenses. section of the charter, as amended by Edw. VII. the finance committee of the council must consider all recommendations involving the expenditure of money, unless an appropriation has been already voted for the purpose.
An item unforeseen expenditure caine before the council and was passed and sent to the finance committee, which directed the city treasurer to pay the amount, and it was paid accordingly. Held, the Chief Justice and Girouard J. contra, that the reserve the two per cent. for unforeseen expenses was not an appropriation of the amount so directed to be paid.
*PRESENT:-Sir Charles Fitzpatrick C.J. and Girouard, Idington, Duff Anglin JJ.
Bench, appeal side, reversing the judgment of the Superior Court, sitting in review, and restoring the judgment of Charbonneau J., at the trial in the Superior Court, District of Montreal, by which the petitioner's action was dismissed with costs.
The nature of the action and the questions at issue on this appeal are stated in the judgments now reported.
On the appeal coming on for hearing,
Atwater K.O. for the respondents moved to quash the appeal on the grounds that the Supreme Court of Canada had no jurisdiction to entertain appeals in cases, such as the present, where the proceedings taken were in the nature of quo warranto and involved merely the liability to a fine of $400, under the statute; that the case could not be ruled by the demand for the reimbursement of $3,800 to the city as the City of Montreal was not a party in the cause, and that there was misjoinder by the petitioner of separate causes of action in seeking this pecuniary condemnation. Lafleur K.C. for the appellant opposed the motion on the grounds that the proceeding taken was authorized by section 338 of the "City Charter"; that the amount now in controversy exceeded $2,000, and that, in any event, the Supreme Court of Canada had jurisdiction to review an improper exercise of jurisdiction by the Court of King's Bench if any such had taken place in that court by the decision complained of. Alternatively it was asked that the City of Montreal should be now added as a party to the cause on the present appeal.
reserved consideration of the question as to its jurisdiction and directed that, in the meantime, the hearing on the merits of the appeal should proceed.
Lafleur K.O. and C. Rodier were heard for the appellant.
Atwater K.C. and Ethier K.0. for the respondents. THE (dissenting) .- By the judgment of the Court of Review which, on this appeal, we are asked to restore, the seven defendants, that is to say, the entire finance committee of the Montreal City Council, are deprived of their offices, condemned jointly and severally to pay a sum of $3,809.40 and disqualified for re-election as aldermen for a period of two years from the date of that judgment, 17th April, 1909. (The statute says the disqualification is to run from the date of the occurrences complained of, i.e., May, 1908.) The judges of the three provincial courts, nine in number, all agree that, by the irregularities which have resulted in such serious consequences to them, the defendants derived neither benefit, profit nor advantage; that no corrupt, fraudulent or indirect motive can be attributed to them, nor is it alleged that any injustice has been caused or wrong done, nor that any result different from what has occurred would have followed a literal compliance with the statute, even if we adopt the construction put upon it by the appellant.
From this conclusion I understand that this court does not dissent. The majority here, however, are of opinion that the unanimous judgment of the provincial court of appeal must be reversed and the majority judgment of the Court of Review, which reversed the trial judge, must be restored. With great respect, however, it is impossible for me to concur.
It is important to extract from the record the substance of the charge made against the defendants and to set down with some minuteness, in the order of their occurrence, each step in the proceedings of the council and committee out of which this action arose. To do so may enable us more clearly to understand in what respect, if at all, the defendants have departed from the regulations made for their guidance in the City Charter, by-laws and rules of council, and to appreciate the legal consequences which result from the infringement of these regulations, if they have been infringed.
In substance, the plaintiff alleges that in May and July, 1908, the defendants, as members of the finance committee of the Montreal City Council, authorized an expenditure of money exceeding the amount previously voted and legally placed at the disposal of that committee and in consequence incurred the pecuniary liability and are subject to the disqualifications enacted by section 338 of the municipal charter, which reads as follows:
The alleged illegal expenditure was made under the following circumstances:
On the 18th of May, 1908, a letter was submitted to the Montreal City Council from the "Comit6 Dupleix" of Paris, inviting the mayor to represent the city at certain fttes to be held in France to commemorate the tercentenary of the founding of Quebec by Champlain, and a resolution was forthwith adopted unanimously accepting the invitation and instructing the finance committee to place at the mayor's disposal the necessary funds to cover his travelling expenses.
On the 20th of May a formal acceptance of the invitation was sent to the secretary of the "Comit6 Dupleix." On the 26th, Mr. Pelletier, city comptroller and auditor, was requested'by the mayor to place $1,500 at his disposal for travelling expenses. On the 29th of May the comptroller put the mayor's letter before the finance committee and it was resolved to instruct the city treasurer to comply with the request and to advance the sum of $1,500.
On May 30th, the city treasurer certified the account as true and correct, recommended that it should be paid and the payment was subsequently approved of by the finance committee in the following terms:
On the same day the comptroller issued his warrant for the payment of this sum of $1,500.
This warrant is not in the record, but I gather from the evidence and the by-laws that the comptroller's warrant is the authority on which the city treasurer paid out the. money.
The latter can certify all accounts but he cannot pay them until they are approved of by the comptroller who must also countersign the treasurer's cheque.
When the mayor and his secretary subsequently returned from France, the accounts for the balance of their travelling expenses were fyled with the comptroller on July 16th.
On the 20th of July, the accounts were submitted to the finance committee and it was resolved
On the next day, July 21st, the accounts were certified by the treasurer and approved of by the four members of the finance committee subject, as in the first instance, to the certificate of the comptroller that there were sufficient available funds voted by council for the purpose and on the same day the comptroller issued his warrant and the treasurer's cheque followed, as in the case of the previous payment. There is some confusion as to the dates on which the comptroller signed the vouchers given by the treasurer and conditionally approved of by the finance committee; but it appears on the face of the documents that the authority to pay, which is the sole foundation of these proceedings, was in each instance given by the members of the finance committee on the same day that the comptroller's warrant issued and, assuming that there is no evidence as to which was done first, the maxim "omnia presumuntur rite acta" applies. There is no proof that I have been able to find that the defendants Robinson and Guay were present at either meeting of the finance coMmittee, but as this objection has not been taken here I am content to mention it; in my view of the case it is not material.
The question for consideration is: Did the members of the finance committee, in these circumstances, authorize an expenditure of money exceeding the amount legally placed at the disposal of the council or committee within the meaning of section 338 of the charter?
It appears on the face of the documents that the authority to pay was given by the finance committee when, the accounts having been referred to the city treasurer, that official approved of them and recommended their payment. In addition, that authority was clearly and expressly given subject to the certificate of the comptroller that there were sufficient available funds voted by council for the purpose. In other words, the accounts being audited, the expenditure was authorized on the condition that the certificate of the proper official was produced to establish that there were funds available and at the disposal of the city for the purpose.
In terms the authority to pay is given subject to the condition prescribed in section 336 of the City Charter which reads:
It was for the comptroller to say if there were funds available and at the disposal of the city out which the travelling expenses could be taken. If there were no such funds, the condition upon which the comptroller was authorized by the finance committee to issue his warrant failed; and if such funds were available how can it be said that the finance committee authorized an expenditure of money exceeding the amount legally placed at the disposal of the council?
It was suggested here, and to some extent the judgment of the Court of Review proceeds on that suggestion, that the defendants came within the disqualifying section when they acquiesced, as members of the city council, in the resolution passed on the 18th of May, 1908, requesting the finance committee to provide for the mayor's travelling expenses.
The argument, as I understand it, is that this resolution involving, as it did, an expenditure of a portion of the city's revenue should not have been adopted until it had been previously submitted to and sanctioned by the finance committee (rule of council 124 and section 42 of the charter) and the omission to comply with this condition precedent, although subsequently and before it became operative the resolution was submitted to and approved of by the finance committee, entailed the disqualification of the whole council under section 338. This resolution is an instruction to the finance committee to indicate the fund; but it is not an authority to the proper official to pay out of a fund not legally placed at the disposal of the council, which is the mischief prohibited by section 338. By the resolution the invitation is accepted and the finance committee is instructed to place at the disposal of the mayor an amount sufficient to cover his travelling expenses, the necessary implication being that those expenses are to be taken out of such funds as are legally available for the purpose. I am of opinion that the omission to comply with rule 124 at most makes the resolution inoperative until the certificate is produced (section 336).
Finally this, in any event, would be an objection founded upon form or upon the omission of a formality which is provided for by section 308 of the charter. I am further of opinion that section 42 of the charter is not applicable in the circumstances because the reserve fund against which the expenditure for travelling expenses was chargeable was then appropriated and at the disposal of the council for these reasons. In the month of December, each year, the council is under obligation to appropriate ("mettre de cot6" is the French term) the sums at its disposal out of the revenues of the city and to provide, among other things, for a reserve of five per cent. (sec. 334, sub-sec. (d)).
The preparation of this annual estimate of expenditure is one of the functions of the finance committee and, when adopted by council, the estimate becomes the civic budget for the ensuing year. In the budget prepared by the finance committee for 1908 and adopted by council is included the reserve of five per cent. which was set aside to the extent of three per cent. to provide for unforeseen expenses, such as the cost of representations and delegations, not an unusual item in a civic budget, as may be seen upon reference to section 596 of the "Ontario Municipal Act."
Briefly in my view the revenues at the disposal of the council for 1908 were appropriated in December, 1907, by the joint action of the finance committee and of the council and the reserve fund was included in and formed part of the civic budget and was at the disposal of the council for the reception and entertainment of distinguished guests and for travelling expenses as fully and effectually as any other item in it. If in this I am not mistaken the council could by virtue of section 334(b) authorize the payment of the mayor's travelling expenses and charge them against that fund without further reference to the finance committee, except in so far as the rule of council 124 was applicable.
When the reserve fund was included in the annual estimate prepared by the finance committee, that fund was appropriated as fully and effectually in so far as the functions devolving upon the committee under section 42 are concerned as any other item of the civic budget and were it not for rule 124, I would say that' with respect to that fund the finance committee was functus, but assuming that they had a duty to perform they did perform it substantially, as I have already attempted to shew.
I come now to the consideration of section 338. repeat what I have already said; there is no suggestion of personal wrong-doing and there was no diversion of funds. No result followed the action of the council or of the finance committee, except that which was desired. All checks and safeguards provided by the charter for the protection of the civic exchequer were observed; there was unanimous action on the part of the council; the certificate of the comptroller that funds were available for the purpose and the sanction and approval of the finance committee were given. Everything that the statute required on the most strict construction was complied with, although conceivably in one aspect of the case, in some respects, out of the statutory order.
I quite agree that the object of the legislature was to check careless, unbusinesslike management of the public money; but
Encyclopuedia of Laws of England, vo. "Penalty," p. 30.
In terms section 338 imposes very severe penalties on any member of the council who authorizes an expenditure in excess of the appropriations. Should we hold that to authorize the expenditure of a sum of money out of a fund amply sufficient, certified by the proper official to be at the disposal of the council for a purpose authorized by the statute comes within the spirit and the letter of the prohibition contained in this enactment? Let me here again draw attention to the form in which the authority to pay was given by the finance committee:
If all the requisite formalities are complied with, even out of the regular order, before the money actually leaves the municipal exchequer, is the spirit of the Act violated?
I read this section, which certainly is not free from ambiguity, to mean that when the annual appropriations have been made and placed at the disposal of the council and of the different committees, no obligation is to be contracted which would involve the credit of the city for any sum in excess of such appropriation, the legislature having in section 334 provided that in making the annual appropriations the council shall maintain the equilibrium between the revenues and expenses so that future ratepayers should not be charged with present expenditures and to prevent that mischief the statute makes the members who authorize the excess of expenditure personally liable therefor. But if a fund is available for a specific purpose and that in an attempt to legitimately apply it to that purpose an informality in the procedure laid down by the rules of the council and by the statutes chiefly for the guidance of the officials occurs, can it be said that the severe penalties enacted by this section are incurred? I cannot believe that such consequences were ever contemplated where no bad faith, negligence, carelessness or indirect motive is imputed and where the object of the council was carried out. If for an error in procedure, personal liability and disqualification are to be incurred, no honest man of substance would venture to assume the enormous risk involved in taking a share in the administration of the municipal government of a large city like Montreal.
The words in section 338, read in conjunction with section 336, must mean that what is prohibited is the expenditure by the council or by the committee of any sum in excess of the amount at the disposal of the council or committee, not that if the money is legally available for a specific purpose and that some formality is required to apply it to that purpose the omission of the formality involves the penalty. The result of such a construction, as shewn by this case, would be to make the members of the council insurers not only of the honesty and efficiency but of the infallibility of the municipal officials.
Of the fourteen judges who have heard this case, nine say that the necessary formalities have been complied with and five that the proceedings were irregular; and, as a result, seven men, admitted to be of the most trustworthy, are disqualified for a period of two years and condemned to pay a large sum. Are these gentlemen presumed to be endowed with that grace of infallibility which evidently has been denied the courts of this country?
Applying that rule to the construction of the charter and in view of the admitted facts, I would dismiss this appeal with costs.
(dissident).-Lorsque cette cause a t pr~senthe devant nous, j'6tais sous lPimpression qu'il s'agissait d'un bref de quo warranto purement et simplement aux termes du code de proc6dure civile et que par cons6quent nous n'avions pas de juridiction, ni la cour d'appel non plus. Aprs avoir lu et relu Particle 338 de la charte de la cit6 de Montr6al Vict. ch. 58) je me suis convaincu qu'il s'agissait d'une action sp~ciale parfaitement ind6pendante du quo warran to, dans laquelle il y a appel non seulement h la cour d'appel, mais aussi a cette cour. Cet article se lit comme suit:
Le texte de cet article est bien diff6rent de ceux du code de proc6dure, articles 987 A 991.
Ces articles d6finissent se que c'est que le quo warranto. II a J pour but principal d'emp~cher Fusurpation ou la dtention ill6gale d'une charge, franchise on pr~rogative publique et larticle 990 ajoute que, si la requite est fond6e, le jugement ordonne que le d~fendeur soit d6poss6d6 et exclus de la charge et peut en outre le condamner h une amende n'exc6dant pas $400, payable L la couronne. Comme Pon voit, il n'est aucunement question dans cet article d'un jugement ordonnant an d6fendeur de rembourser des deniers ill~galement obtenus pendant l'exercice de sa charge; en fait d'argent, tout ce que le demandeur peut r6clamer, c'est la condamnation h lamende de quatre cents piastres. L'article 338 de la charte de Montreal, cit6 plus haut, est bien diff6rent.
II a pour objet principal la condamnation d'une d~pense ill6gale d'argent; et la d6qualification ou d6ch6ance de sidger on de se faire r661ire n'est que la cons6quence "par le fait m6me," dit Particle, de cette d~pense.
C'est ce que la cour d'appel a jug6 et je crois qu'elle avait raison. L'application pour casser Pappel faute de juridiction doit done 6tre renvoye avec d6pens.
Au mbrite, j'abonde dans le sens de 1honorable juge Archambault parlant pour toute la cour A lunanimit6.
Qu'il y ait eu quelque irr~gularit6 on informalit6 dans la proc6dure suivie par le conseil de ville, cela est 6vident; mais ces d~fauts sont tol& r6s par la charte, A moins d'injustice rbelle ou de nullit6 expresse (art. 308).
est lFinjustice ici? II est impossible de la trouver. Les 6chevins soit du conseil de ville ou du comit6 des finances ont agi avec la meilleure foi du monde.
Cegi n'est pas contest6; il n'y a pas eu de d6tournement de fonds on d'excs d'appropriation.
Toute Perreur consiste en ce qu'ils ont agi non pas dans Pordre indiqu6 par la charte mais a F'inverse commengant an lieu de finir par le conseil de ville. Tons les corps dirigeants ayant droit d'6tre consultds, de se prononcer et de d&cider ont approuv6 la d6pense en question. Le montant payable avait 6t pr6alablement vot6 et 6tait 16galement mis h la disposition du conseil et de la commission des finances, vu que la charte pr~voit qu'une pareille d6pense doit 6tre prise h m~me le fonds de r6serve qui avait 6t6 vot6 an mois de d6cembre pr6c6dent; 3 Edw.
VII. ch. 62, art. 27; 7 Edw. VII. ch. 63, art. 12.
Et puis quant a la 16galit6. Comment peut-on soutenir en face de Particle 308 que les informalitds que Pon reproche aux 6chevins entrainent la nullit6 ? Aucun des articles cit6s, pas mime Particle 42 tel qu'amend6 par 3 Edw. VII. ch. 2, art. 6, ne dcr~te la nullit6 de la proc6dure qui y est indiqu6e.
L'article 308 se lit comme suit:
stre
II faut bien remarquer que notre mode de proc6der m~me devant les cours de justice n'est pas toujours prescrit h peine de nullit6; que cette nullit6, r~gle g6ndrale, n'existe pas a moins qu'elle ne soit prononc6e.
C.P.O. art. 175.
S'il faut en croire le jugement de la cour, les
6chevins se trouvent a garantir la 16galit6 des proc& dures du conseil et des commissions.
Ils sont, pour ainsi dire, les assureurs de linfaillibilit6 1gale du greffier de la cit6 et mime de ses avocats. Est-il possible d'imaginer que le 16gislateur ait song6 h crier une semblable position. Elle est non seulement peu enviable, mais elle est inmme intolerable et impossible. Aujourd'hui il s'agit de quatre ou cinq mille piastres, demain il s'agira peut-6tre d'un demi-million ou d'un million.
Comment supposer pour un instant que les 6chevins qui, rigle g6ndrale, ne sont pas mime des avocats vont mieux rdsoudre les difficultis 16gales que les juges? Nous en avons un exemple frappant dans cette cause. Neuf juges de Qubbec se sont prononcis et sept en faveur des 6chevins qui cependant perdent leur cause parce que devant cette cour ils ont une simple majorit6 contre eux, trois contre deux. II est 6vident qu'il sera bien difficile, sinon- impossible, de trouver des candidats d6sirables h la position d'6chevin de la ville de Montrial. La position sera pire qu'aujourd'hui, car elle devra tre compltement abandonne6 h des gens sans valeur ni responsabilit6, h des aventuriers et des brasseurs d'affaires.
Je n'ai pas 1'intention d'entrer dans les details assez nombreux de cette cause. Ceux qui d6sireraient les connaitre n'ont qu'd parcourir le jugement tr~s 61abor6 et lucide de M. le juge Archambault. les comprend tous. Je me contenterai de citer la conclusion A laquelle le savant juge est arriv6:
A La resolution n'a pas fixe le niontant de la d6pense; mais les membres de la commission des finances n'ont pas excd& le montant de la partie disponible du fonds r4serve affect6e A genre de d~pense.
En resum6, le conseil avait droit d'ordonner cette d6pense. f y avait des fonds disponibles pour la payer. Et la d6pense a paye A Girouard J. meme fonds.
La proc6dure ordinaire et plus reguliere n'a peut-cstre pas t suivie. Mais il n'en est r&sult6 aucune injustice, ni aucune atteinte A Fesprit la charte, qui veut que les fonds publics soient appliques aux fins pour lesquelles ils sont vers6s dans tresor municipal, et dans les limites 6tablies par le conseil lui-meme lorsqu'il autorise une d6pense. Je suis done d'avis de renvoyer l'appel avec d6pens. IDINGTON J.-The City Charter of Montreal by section 338 provided as follows:
Every member of the council who authorizes either verbally, writing, by his vote, or tacitly, any expenditure of money exceeding the amount previously voted and legally placed at the disposal of the council or any committee, shall held personally liable therefor, and shall thereby become disqualified as a member of the council, and shall also disqualified for re-election as alderman for a period two years thereafter.
This action is taken thereupon, as the conclusions of the statement of claim in the form of a petition shew, for the twofold purpose of having it declared that respondents being aldermen of the city have forfeited their seats and for two years the right to be elected as such, and to recover moneys they had unlawfully and in breach of the foregoing section 338 authorized to be paid.
The question raised at the threshold in respect of our jurisdiction to hear the appeal is unique in its character.
We have a matter in controversy between the parties as to an amount exceeding our jurisdictional limit of two thousand dollars.
Can any one join in the same action a claim for over two thousand dollars ($2,000) no matter how founded, and something else over which we have no jurisdiction and thus give us jurisdiction in the latter J. matter, or in the.converse case begin and prosecute a quo warranto proceeding and join to it a claim for over two thousand dollars ($2,000) and thus force an appeal here.
I incline to think not, and yet we are to give in any case, if we reverse the judgment which the court below has pronounced, the judgment and award the process or other proceedings which the court should have given or awarded.
One curious thing is the court below has no more power to hear appeal in a case of quo warranto than we, and yet it has heard this case in appeal and come to the decision that the case is not well founded. Must we not first solve the question of the right of the court of appeal to interfere?
My solution is that if the case is to be held as one of quo warranto, then it is quite too clear for argument the court below had no jurisdiction, and its judgment ought for that reason to be reversed. But as the question of whether the proceeding is one of quo warranto or not, despite the order therefor, is one of procedure, with regard to which we, according to the practice of this court, never exercise jurisdiction unless in a case, not this, wherein appears a violation of the principles of natural justice; and as the court of appeal has treated it as if not a case of quo warranto, I assume, for the present, that court did rightly in so treating the matter, and must, therefore, proceed to such merits as the case may have. This section 338 quoted must be read in light of sections 42 and 336 of the charter.
Section 42 is as follows, as replaced by Edw. VII. ch. 62, art. 6, in 1903:
The functions of the finance committee shall be: The preparation of the annual estimates of expenditure; the consideration of all J recommendations involving the expenditure of money, and the awarding of all contracts, subject to the ratification by the council, for works, material and supplies, unless an appropriation has been already voted.
No recommendation for such purposes shall be adopted the council unless the same shall have been previously submitted to and sanctioned by the finance committee; provided, however, that, upon the refusal of the finance committee to sanction an appropriation asked for by any committee, the council may, a vote of the absolute majority of all its members, order such appropriation to be voted. No member of any other permanent committee can be a member of the finance committee.
The plan outlined is clearly and expressly that in the finance committee and therein alone can lawfully be formulated any authorization involving the expenditure of money.
I will not say that the council or any one else might not discuss such matters, and in that limited sense submit the propriety of the proper authority being moved in the matter to a consideration thereof. But one thing the council must not do without the committee's consent or refusal, and that is to recommend in the sense of authorizing an expenditure of money. They have no such power unless an appropriation has been voted. Indeed, neither council nor committee can alone do so effectively.
The appropriation, which in the words of the statute has already been voted, must have had the recommendation of the committee first or its refusal to make such a recommendation.
Either thing once done the council is free to act by a vote (if necessary of an absolute majority of all its members), but not otherwise or until then. The finance committee in any representative body usually comprises the ablest men of experience available therein.
In this instance the control of the city's business was thus practically, and I think intentionally, handed over to the majority of the finance committee dealing with any matter.
But they cannot be autocratic for the council by an absolute majority can overrule them.
The plan, whether stumbled on, or the fruit of much thought, is an admirable one but for one thing, and that is, that it imposes the painful duty of thinking. It is essentially the plan of controllerships. In this latter case. men understand by seeing the physical severance and act accordingly.
There is another section, that is 336, which reads as follows:
The whole law necessary to a determination of this issue is contained in these three sections, but has been obscured by side issues arising from a consideration of rules of procedure, statutory, and otherwise. So far as statutory they emphasize if possible the need for the observance of these sections of the charter and so far as otherwise can have no effect.
Let us see the thing the respondents did which is complained of..
On 18th May, 1908, the council on motion of one of respondents adopted the following resolution: Soumise et lue, une communication du comit6 Dupleix, Paris, invitant le maire a repr~senter la cite
1'occasion du tricentenaire de la fondation par Champlain.
Sur motion de M. I'echevin L. Lapointe, appuy6 par l'echevin Yates, il est resolu: Que la dite invitation soit acceptie, que son honneur le maire accompagn6 de son secr~taire, soit pri6 de repr6senter la ville en cette Idington J. circonstance et que la commission des finances recoive instruction mettre A la disposition son honneur le maire, le montant n6cessaire pour couvrir ses frais d6placement.
On the 29th May, 1908, the finance committee responded to this appeal by the following:
Submitted and read a communication from His Worship the Mayor, asking that a sum of placed at his disposal for travelling expenses on the occasion of his trip to Europe to represent the city at the tercentenary celebration of the foundation Quebec.
Resolved, to instruct the city treasurer to comply with the mayor's request and to advance him the said sum of The respondents were parties to this.
The money was paid and the mayor and others travelled.
Something unpleasant occurred in the course of the accounting for the expenses.
We have nothing to do with that and all else which followed except that by the like illegal methods as outlined above connected with the same matter the respondents permitted and procured to be taken out of the treasury, without observing the prescribed statutory rules, sums in the aggregate which the Court of Review has found.
What appears on the face of these transactions so far as material, is that the respondents, within the words of the section first quoted, authorized an expenditure of money exceeding the amount previously voted, and thereby legally placed at the disposal of the council or committee. I cannot fritter away the force of the section by assuming it inoperative unless there had been a previously voted sum appropriated to the same purpose, or by adopting the statutory directions J. as to appropriations as a voting thereof, and thus a compliance with what is prescribed.
I repeat that section 42 constitutes the consideration of all recommendations, involving and authorizing the expenditure of money; first the duty of the committee and then of the council.
Section 336 imposed also the respective duties of the committee seeing the certificate therein called for sent forward with its recommendation to the council and of the council refraining from voting till that certificate was received; for until then the recommendation was invalid. With great respect I think the five per cent. or reserve fund specially set apart by sub-section (d) of section 334, as amended by 3 Edw. VII. ch. 62, was in law exactly in the same position as all the other funds of the municipality and required the provisions of section 42 to be observed in respect thereof. The statute did not place this reserve at the disposal of the council any more than other funds. Indeed, it was as to two per cent. a provision against loss merely. Although possibly, in harmony with the statute, the budget scheme might have included that in its frame, yet in no such sense as involved in the said duty laid down in section 42 can it be said to have been voted as an appropriation.
When were any of these moneys placed at the disposal of the council or any committee?
What had the finance committee ever done as required by section 42 to place any such moneys at anybody's disposal in any way to justify what was done?
Until the fnance committee passed upon the matter and set aside for this purpose the necessary money forming part of this statutory reserve nothing could be legally done with it. It fell under section 42 just as other moneys were put.
To say it was available for the committee and council by proper methods is one thing. To apply or fail to apply those methods is entirely another thing.
The failure of duty upon which the foundation for the attack on respondents rests is entirely that in respect of proper legal methods they failed to observe their obligations in that regard which were as plainly written as language could make it if attentively read.
I think the appeal must be allowed and judgment go for the amounts awarded by the Court of Review.
The penalties claimed cannot be awarded herein.
The section sued upon does not give any right of action in the nature of a quo warranto or anything leading to like results. The action is founded on the right of a rate-payer not questioned here to invoke such a statutory provision.
In light of what the court of appeal holds, however, in what I repeat is a mere matter of procedure,
I do not see my way to vacating that declaratory part of the judgment.
With great deference, but for that, I would rather have held the parties to an action for money as one independent in every way of anything in the nature of quo warranto.
The one is not dependent on the other, though the same facts and laws may and indeed must produce in one case a judgment for money, and in the other a vacant seat.
DUFF J.-This appeal raises first a question of procedure, which in one view of it involves the question of the jurisdiction of this court to entertain the appeal.
The action in which the appellant was plaintiff was in form of proce~ding in quo warranto, and calling upon the respondents to shew cause why they should not be declared to be disqualified to sit as members of the municipal council of the City of Montreal, under article 338 of the City Charter, and asking also that under the provisions of that article they shouli be directed to repay to the city certain sums voted by them to defray the expenses of a delegation to Paris to take part in a celebration on the occasion of the tercentenary of the founding of Quebec. The Court of King's Bench has held that the action, though in form quo warranto, was in substance a special action under article 338.
The respondents dispute this view and contend that the proceeding was in substance quo warranto, and that it was incompetent to the plaintiffs to include with the claims for relief appropriated to such proceeding* a claim for the repayment of the moneys mentioned; they further contend that treating the action as a proceeding in quo warranto simply an appeal does not lie to this court. As to this contention it is sufficient to say that the view of the court of appeal is concurred in by the members of this court specially qualified to form an opinion upon a question of law of procedure in the Province of Quebec, and I see no adequate reason for disagreeing with that view.
The question of substance raised by the appeal turns upon the construction of certain articles of the Charter of Montreal, and it arises in this way: On the 1st of May, 1908, the council on receiving communication of a letter addressed to the mayor inviting him to represent the City of Montreal on the occasion mentioned, passed the following resolution:
Subsequently the finance committee the members of which (the respondents) were the defendants in the action authorized the city treasurer at the request of the mayor to pay him to him the sum of $1,992.40 in liquidation of the expenses, the payment of which the council by this resolution professed to authorize. The ground upon which the appellants rest their claim to have this sum refunded by the respondents, is that the resolution of the council was for various reasons inoperative to confer upon the finance conmittee any authority to authorize the payment of money out of the city treasury; and that the respondents having directed the disbursement mentioned without authority are compellable to restore the fund thus withdrawn under the provisions of article 338. The articles requiring consideration are 42, 334 and 338. It will be convenient to set them out in extenso now. Article 42, as amended by 3 Edw. VII. ch. 2, art. reads as follows:
for by any committee, the council may, by a vote of the absolute majority of all its members, order such an appropriation to be made." Article 334.
As replaced by 3 Edw. VII. ch. 62, Duff j.
article 27, [1903] :
In the month of December of each year, the council shall appropriate the sums at its disposal out of the revenues of the city for the needs of the various civic departments for the ensuing fiscal year. In so doing, the council shall maintain the equilibrium between the revenues and expenses and provide for:
(a) The cost of the collection of the civic revenue;
(b) The interest upon the civic debt and sinking fund which may established;
The school tax;
reserve of per cent.-two per cent. being to cover all possible loss in the collection of taxes and three per cent. for unforeseen expenses, such as those relating to judgments, official receptions, epidemics, inundations, fortuitous events and damages caused irresistible force;
Other established charges upon the civic revenue, including the deficit from any previous year;
(f) Repairs, maintenance, salaries and expenses for general administration.
334(a). Added by 63 Vict. ch. 49, art. 10, [1900]: The reserve fund may also employed to pay claims for damages arising from or quasi offences.
334(b).
Added by 7 Edw. VII. ch. 63, article 12, [1907]:
The city may charge against the reserve fund the costs of representation and of delegations authorized the council as well as the sums required for the settlement of claims and for the removal snow and ice from the sidewalks.
Article 338:
Every member of the council who authorizes either verbally, writing, his vote, or tacitly, any expenditure money exceeding the amount previously voted and legally placed at the disposal the council or any committee, shall held personally liable therefor, and shall thereby become disqualified as a member of the council, and shall also disqualified for re-election as alderman for a period two years thereafter.
Added by 8 Edw. VII. ch. 85, art. 22, [1908] Invalidity is imputed to the resolution of the council on various grounds; but in my view of the case it is necessary to consider only one of them, which is this -article
42 prohibits the adoption by the council of any proposal for the expenditure of money which has not been previously submitted to the finance committee, except in those cases in which an appropriation has already been voted.
It is argued, and after the most careful consideration of the provisions of the statute I think the argument has not been answered, that in this case there was no appropriation within the meaning of this article of the sum disbursed or, indeed, of any sum for the purpose to which it was devoted and that the proposal was never submitted to the finance committee in the sense of article 42. The first point for consideration is whether at the time of the passing of the resolution of the 18th of May there had been an appropriation within the meaning of article 42 of the sum in question.
The point turns largely on the construction of article 334. It is argued with a good deal of force and plausibility that the city is expressly authorized by article 334(b) to charge expenses of this character against the reserve fund provided for by article 334, and that by the terms of the last mentioned article the reserve fund thereby directed to be provided is treated as a sum appropriated for all or any of the various purposes to which the statute authorizes the council to apply it. The statute does, no doubt, expressly authorize the city to charge such expenses as these against the reserve fund; but I am unable to follow the argument through to its conclusion.
I do not think the reserve fund (created by the statute rather than by the council) can be treated as a sum appropriated in the sense indicated.
The article 334, it is observable, requires the council in the December of each year to appropriate the sums at its disposal out of the revenue of the city for the needs of the various civic departments, for the ensuing fiscal year. It then goes on to direct that in thus providing for the disbursements of the revenues the city council shall make provision for certain permanent charges upon the city revenue-the cost of collection, interest upon debt and sinking fund, school tax, deficit from any previous year, "other established charges upon the revenue," maintenance, salaries and expenses for general administration. It is perfectly clear that in each one of these cases it is intended that the council should set apart sums, specific and ascertained, and that it should at the same time declare the purposes (with more or less precision as the circumstances may admit) to which these sums are to be applied.
It is perfectly clear, too, that the duty of preparing and considering the estimates upon which the appropriations are based devolves under article upon the finance committee. The reserve fund stands necessarily in a different category.
It is obviously intended to be what its name imports, viz.: a fund that shall be available for expenditures the municipality may be called upon to make during the course of the year, but which cannot at the time fixed for making the appropriations be ascertained with any accuracy or certainty.
It is in a word a provision for contingencies. Does it follow that the whole of this fund is to be treated as a sum appropriated within the meaning of article 42? So to describe it seems to me to involve some disregard of the meaning of the words as well as the substance of the operation.
The direction to provide for a reserve fund seems rather to aim at imposing a limit upon the annual appropriations in relation to the amount available for expenditures-a requirement to allow a margin which shall leave a fund that can be appropriated to meet unforeseen demands which may arise during the course the year, rather than what is commonly understood to be an "appropriation."
If this be the correct view it follows that there was no appropriation for the purposes to which the sum in question was applied. It follows too, I think, that the direction to the treasury to disburse the sum in question given by the finance committee was of that committee, because although the reserve fund was at the disposal of the council, who could disburse it on compliance with article 42, their attempt to disburse it was inoperative for want of compliance with that article.
The respondents are consequently accountable for the sum so paid out by the committee without authority.
I have not overlooked the view expressed by Archambault J. upon the construction of article 42. If I have correctly apprehended the learned judge's view it is that the article applies only to "recommendations" made by committees of the council and not to proposals initiated in the council itself. I quite agree that if that is on its true construction the meaning the article there is an end of the matter so far as this point is concerned; but I can see no valid reason for thus limiting the scope of the word "recommendation."
I do not know why it should not be held to embrace any proposal made by the mayor or by any other member of the council involving any expenditure of money. I think the true construction is that which council itself has adopted in Rule 124, which requires that "any resolution, motion or report" involving the disbursement of any part of the revenues of the city shall first be submitted to the finance committee.
There remains to consider the contention that the omission to submit this proposal to the finance committee should in the circumstances be regarded as a mere irregularity not affecting the validity of the transactions impugned. It is argued that in point of fact the proposal was passed upon both by the council and by the finance committee, and that in the circumstance that the council passed upon the proposal first and the committee afterwards there is involved no substantial departure from the requirements of the charter.
I do not think that is a very satisfactory way of treating the express requirements of a legislative enactment such as this-designed as it is to provide machinery for securing the due administration of the funds of a municipal corporation. do not, of course, profess to know the exact degree of importance which the legislature attached to the prohibition found in article 42.
One cannot, however, lose sight of this; the legislature has entrusted not only the preparation of estimates, but the examination of all proposed expenditures to a special committee, and I am unable to say that they may not have considered it of real importance that the municipal council in dealing as a council with the funds entrusted to its care should, before passing and as a condition of the power to pass upon any proposal involving the expenditure of money not already appropriated, submit that proposal to this committee for examination.
It is not very much to the purpose to say that the council might eventually override the committee. The function of examining and advising is one function, the function of vetoing is another, and the fact that the legislature has not seen fit to endow the committee with the latter is not a ground upon which a court of law can legitimately treat the first named function as a matter of form merely. It does not, moreover, help the matter to say that the expenditure was in fact passed by the finance committee. If my view of article 42 be correct what the law requires is that the proposal, having been examined by the finance committee in the exercise of the responsibility cast upon them by article 42 shall then, and only then, be ripe for the action of the council. Obviously it is a vastly different procedure for the council first to put its imprimatur upon the proposal and then to instruct the finance committee to carry its decision into effect; and that in substance is what the respondents are called upon to uphold.
It is only bare justice to the respondents to say that no imputation involving any personal reflection upon them was seriously advanced, and in such circumstances there is a natural and justifiable regret that in the absence of malus animus they should suffer the penalties which will be the result of their proceedings; on the other hand it is a paramount consideration that the safeguards with which the legislature has surrounded the administration of the public funds should not be trifled with, and with very great respect I think one could not accede to the views advanced in behalf of the respondents without giving a start to the frittering away of the important provisions of section 42.
The appeal should be allowed with costs and judgment should be against the respondents for the restoration of the moneys disbursed with the costs of the action.
J.-The facts of this case and the contentions of the parties sufficiently appear in the judgments rendered in the provincial courts.
The judgment of the Court of King's Bench, reversing that of the Court of Review, and dismissing the action of the appellant, is impugned upon the grounds that the Court of King's Bench entertained the respondents' appeal without jurisdiction, and that upon the merits the judgment of the Court of Review, which had reversed that of the court of first instance, should not have been disturbed.
The action of the appellant was not, in my opinion, primarily or principally in the nature of a proceeding in quo warranto. He primarily and principally sought to compel the reimbursement by the respondents, the seven members of the finance committee of the municipal council, to the City of Montreal, of the sum of $3,809.40, the expenditure of which he claims they illegally authorized; and, incidently, to have them disqualified.
He also sought to have them subjected to a money penalty. His action was brought to enforce against the defendants the special remedies and penalties provided by article 338 of the charter of the City of Montreal in case of such misconduct in office as he charges against the defendants. He has added, improperly, I think, a claim that the defendants be con- . LaI demned to pay a sum not exceeding $400 each to the Crown, by way of penalty.
I agree in the view that the provision which excludes the right of appeal in ordinary cases of quo warranto beyond the Court of Review, does not apply to this case; and that the Court of King's Bench therefore had the jurisdiction which it assumed to exercise.
Article 338 of the Montreal charter is as follows: Did the defendants authorize "an expenditure exceeding the amount previously voted and legally placed at the disposal" of the finance committee?
The expenditure in question was made out of "the reserve fund" (1).
This fund is by the annual budget placed under the control of the council itself. It could only be placed at the disposal of the finance committee by a legal and sufficient act of the council. The resolution of the council upon which the finance committee acted was passed without any previous recommendation of that committee, contrary to the provisions of article 42 of the city charter, and without any certificate of the comptroller having been first obtained, in violation of the requirements of article 336. The resolution did not designate any fund out of which the expenditure should be made, nor did it specify either the amount or the maximum amount to be expended.
By article 334(b) the council is empowered J. to provide out of the reserve fund for the expense of representation and of delegations.
By article 42 the council is forbidden to pass any resolution for expenditure without a prior recommendation of the finance committee, unlessthe latter body has refused to recommend, and such refusal has been overruled by a majority of all the members of the council. Rule 124 of the council is to the same effect. Under article 336 the passage of -any such resolution without production of the comptroller's certificate shewing that there are funds available therefor, is prohibited, and it is provided that a resolution so passed shall not "have any effect."
For the respondents it is asserted that the non-observance of these provisions of the charter was a mere informality or irregularity which would not prevent the resolution of council operating to legally authorize the finance committee to draw upon the reserve fundthat the committee therefore drew upon a fund "legally placed at its disposal."
I am unable to take this view. I cannot understand how a resolution of council, which is by the charter expressly declared not to have any effect, can operate to legally place the reserve fund pro tanto at the disposal of a committee.
The comptroller's certificate required by article 336 was never obtained. Two other certificates, which the rules required should be attached to the warrants for payment were secured, but not until some time after the moneys had been actually paid over by the city treasurer. Neither of these was the certificate required by article 336. The absence of the preliminary recommendation of the finance committee prescribed by article 42 is excused on two grounds: (a) that the reserve fund was under the direct control of the council itself; and (b) that the finance committee subsequently assented to the expenditure.
As to the former, I think it clear that the council could not have legally authorized the expenditure by any other committee of part of the reserve fund without the preliminary recommendation of the finance committee prescribed by article 42. As to the latter, it by no means follows that the finance committee in carrying out the order of the council to make the expenditure directed, exercised in regard to it any such duty or power as that conferred on it by article 42a power or duty which the article contemplates shall be exercised before and not after the authorization of the expenditure by the council. In directing the payment pursuant to the resolution of council the committee may well have deemed itself to be discharging a purely ministerial duty.
I am of the opinion that the members of the finance committee by their votes authorized an expenditure of money which was, for both of the above reasons, not "legally placed at their disposal."
The omission to indicate the fund out of which the expenditure should be made was, in view of article 334 (b), probably only an irregularity. The omission to fix the sum or the maximum sum to be expended, although a more serious defect, would probably not suffice to nullify the resolution.
I do not pause to consider the allegation that there was improper expenditure by the mayor's secretary. Upon the argument I was not convinced that this was established, and further consideration of the evidence has not satisfied me that a finding against the defendants upon this ground would be warranted.
J.
Having regard to the good faith of the respondents which has not been seriously questioned, and to the facts that no real injustice has been done the city; that the finance committee, if asked, would probably have recommended the expenditure; and that the comptroller could certainly have given the certificate called for by article 336, I regret to find myself obliged to reach a conclusion which must entail such grave consequences to the respondents. But it is of the utmost importance that all the safeguards which the legislature has ordained for the protection of the ratepayers of Montreal in matters of civic expenditure should be maintained intact.
For this reason, no doubt, severe consequences are attached by article 338 to certain breaches of duty in this connection, regardless of whether they are or are not intentional. While regretting that, in the circumstances of this case, the respondents must suffer, being satisfied that what they have done falls within the purview of article 338, I know of no power or right in this court to exempt them from its provisions.
With the greatest respect for the Court of King's Bench, and also for those of my colleagues with whom I find myself unable to agree, I am of opinion that this appeal should be allowed and the judgment of the Court of Review restored with costs throughout to be paid by the respondents to the appellant.
Appeal allowed with costs.
Statutes and regulations cited
-
- section 338
- section 334
- section 336
- section 42
- section 308
- section 596
- section 334(b)
- sections 42
- 336
- Section 42
- Section 336
- article 334(b)