Supreme Court of Canada

Winnipeg Electronic Co. v. The City of Winnipeg and The City of St. Boniface, [1934] S.C.R. 173

Date: 1934-01-26.

Winnipeg Electric Company Appellant;

and

The City of Winnipeg And The City of St. Boniface Respondents.

Present: Duff C.J. and Lamont, Smith, Cannon and Crocket JJ.

1933: November 13, 14; 1934 January 26.

ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA

Railways—Municipal and Public Utility Board Act, Man., 1926, c. 33, s. 119—Board’s order requiring street railway company to pay certain costs in connection with construction of new bridges—Jurisdiction of Board to make the order—Company’s obligations under agreements with municipalities.

Appellant company operated in the cities of Winnipeg and St. Boniface a street railway system which had crossed the two bridges in question, but service across them had been discontinued as one of them was considered unequal to the strain of increasing general traffic over it, and appellant had provided (with consent of the municipalities) a substituted service. The municipalities replaced the bridges by new and

[Page 174]

stronger ones, the change involving construction on alignments different from those of the old bridges and the substitution of two lines of track for the former single track. On application by the municipalities, the Manitoba Municipal and Public Utility Board made an order requiring appellant to pay the cost of placing rails, ties and foundations therefor on the bridges and one-half the cost of such work in connection with the approaches.

Held: The order was unauthorized. From the Board’s memorandum of judgment, its line of consideration of the application, and its finding in former proceedings, the order must be taken as one grounded on s. 119 (a) of the Municipal and Public Utility Board Act, Man., 1926, c. 33; and to justify it under s. 119 (a) it must be an order requiring appellant to perform some duty or obligation imposed upon it by statute or municipal by-law or provisions of its own charter or by agreement with either of the municipalities or other owner; and no such obligation as the Board had ordered was so imposed. Having regard to the respective obligations of appellant and of the municipalities, under the agreements with respect to the old bridges, and it not appearing that the stoppage of service over the bridges was due to any default of appellant, and as no responsibility rested on appellant for the taking down and replacement of the old bridges, the Board had no authority to require the payments ordered from appellant, either as a statutory or contractual liability, or as payments necessitated by renewal of the former service. The taking down of the bridges, without any new agreement with appellant, relieved appellant from further obligation in respect of its agreements. Sec. 15 of by-law 543 (by-law granting franchise to appellant) of the City of Winnipeg, as to the city council’s right to demand construction of new lines, had no application, as no such demand was shown to have been made, there was no obligation on appellant under the by-law to share in the cost of a new bridge, and appellant had its track on the bridge when it was taken down.

Judgment of the Court of Appeal for Manitoba, 41 Man. R. 1, affirming the Board’s order, reversed.

APPEAL by the Winnipeg Electric Company from the judgment of the Court of Appeal for Manitoba[1], dismissing the Company’s appeal from the order of the Municipal and Public Utility Board (the Board created by the Municipal and Public Utility Board Act, Statutes of Manitoba, 1926, c. 33), requiring the Company to pay the entire cost of placing rails, ties and foundations therefor on two bridges then in course of construction and one-half the cost of such works in connection with the several approaches to the bridges. The material facts of the case are sufficiently stated in the judgment now reported. The appeal was allowed and the order of the Board set aside, with costs throughout.

[Page 175]

W. N. Tilley, K.C., and R. D. Guy, K.C., for the appellant.

Jules Preudhomme, K.C., for the respondent, City of Winnipeg.

F. Trafford Taylor for the respondent, City of St. Boniface.

The judgment of the court was delivered by

Crocket J.—In the year 1893 the town council of St. Boniface passed a by-law granting to the Winnipeg Electric Street Railway Co., which was then operating a street railway system in the city of Winnipeg, the right to construct and operate single or double lines of street railway on any of the streets of St. Boniface. This franchise was originally granted for the term of 30 years, which period was within a few days extended to 40 years by an amending by-law, with the right to the town on the expiration of that period on notice to take over the system at a valuation to be determined by arbitration. One of the conditions of the franchise was that the fares to be charged should not exceed the fares then charged in Winnipeg and that no more than one fare should be charged for any continuous trip, “this to include a continuous trip from the Town of St. Boniface to the City of Winnipeg, or from the City of Winnipeg to the Town of St. Boniface.” By a later by-law, passed July 31, 1902, it was provided that transfers “shall be given on said railway in Winnipeg to passengers from St. Boniface and to St. Boniface in the same manner as transfers are at present given in Winnipeg”.

In May, 1904, the Street Railway Co. entered into an agreement with the Norwood Improvement Co. Ltd., which had constructed a bridge across the Red River, the centre thread of which forms the boundary between the city of Winnipeg and the town (now the city) of St. Boniface, and was then maintaining it as a toll bridge, whereby the Improvement Co, granted the right to the Street Railway Co. to lay an electric street railway track upon the easterly side of the bridge and the approaches thereto and to operate passenger cars upon the said track for a period of eight years. This agreement provided that the Railway Co. should at all times during its continuance keep so much of

[Page 176]

the surface of the bridge as may be between the rails of the said track and for the space of two feet on the outside of each rail in good repair, and further, that the Improvement Co. should have the right, whenever it should deem it necessary, to take up the rails or that part of the bridge covered by the rails

for the purpose of altering or repairing the said bridge or for any other purpose within the province or privilege of the Improvement Company; the same being replaced by and at the expense of the Improvement Company.

There was a further clause that the Railway Co. should assume all responsibility and risk and liability of and in connection with the strength and sufficiency of the bridge “for the purposes for which the leave and licence hereby given is granted” and that

should any strengthening or altering of the said bridge be required now or at any future time, during the continuance of this agreement, to make the same sufficient for such purposes, such strengthening and altering shall be done by the Street Railway Company at its own expense and to the satisfaction of the Improvement Company.

Another clause freed the Improvement Co. from all liability for any loss or damage arising from the construction or operation of the street railway upon and across the bridge.

In March, 1909, the City of St. Boniface purchased this bridge and all the vendor’s rights in connection therewith from the Norwood Improvement Co. by an agreement in which the Street Railway Co. joined, and by which the latter accepted the City of St. Boniface in substitution for the Improvement Co. in all contracts and agreements between the Company and the Railway, and released the Company from all liability in respect thereof. By a supplementary agreement entered into a few days later the Railway Co. agreed with the City that whenever the City should pave the balance of the bridge, it would pave and maintain the pavement of that portion of the bridge lying between the railway tracks during the term of the operation of the Company’s cars and keep the same “in as good condition as the balance of the pavement on the bridge shall be kept and maintained by the City”, and the City on its part agreed to make and keep the bridge as a public highway for the free passage of the public and the cars and passengers of the Company.

The Winnipeg Electric Railway Co. and its successor, the Winnipeg Electric Company, the present appellant,

[Page 177]

continued to operate its cars across this bridge under the terms of these agreements until September, 1929. In the year 1926, the bridge having been considered to be unequal to the strain of the increasing motor vehicle and other traffic, the Company put in some stringers at its own expense to strengthen and make it safe for its own cars after unavailingly notifying the city authorities that some means must be found to relieve the traffic conditions on the bridge with an intimation that if this were not done the Company would be compelled to discontinue its service over it.

In August, 1929, the question of the safety of the bridge was again raised, when the Company called the City’s attention to the fact that, while it was complying with the recommendations contained in a report prepared by the City’s consulting engineer as a result of the complaints of 1925, the City had taken no steps to control other traffic over the bridge, in accordance with its own engineer’s report, and that unless something were done to this end, the Company would have to seriously consider discontinuing service over the bridge. The City’s consulting engineer thereupon made a further examination of the bridge and recommended that all street cars, trucks and horse-drawn vehicles be stopped from using the bridge. The Company in consequence discontinued its service over the bridge, and immediately applied to the City Council of Winnipeg for permission to extend a bus service it was operating on River Ave. as far north on Main St. as the Union Station, in order that its patrons might not be inconvenienced. This permission was granted as a temporary measure and during the pleasure of the Council. On the St. Boniface side the Company installed a loop near the approach to the abandoned bridge and used the Provencher Ave bridge further down the river for the crossing of its cars to Winnipeg.

Before this stoppage the Street Railway Co. had maintained its St. Boniface-Winnipeg interurban service via the Norwood bridge and South Main St. which afforded the approach to the bridge on the Winnipeg side, running almost due north from and on a straight line with the bridge, and intersecting Bell, River and Mayfair Avenues, before crossing the Assiniboine River by the Main St. bridge on to Main St. These two bridges appear by the plans in evidence to be separated by a distance of some 800 feet.

[Page 178]

The substituted service provided for as above continued for upwards of a year without any arrangements being made by either the City of St. Boniface or the City of Winnipeg for the strengthening or replacement of the Norwood bridge, or the restoration of the former service. In the fall of 1930 negotiations took place between the two municipalities looking to the construction of new and stronger bridges across the Red River on the site of the abandoned Norwood bridge and across the Assiniboine River on Main St. and to the substitution of two lines of street railway track across both bridges for the single track on which the service had formerly been maintained, the proposal embracing also the widening of Main St. South, though a double track appears to have already been installed on this street between the two bridges. Both cities hoped to secure appropriations from the contributions which it was expected the federal and provincial governments would make for unemployment relief. In the end the two cities obtained estimates of the cost of the proposed two new bridges—$620,000 for the Norwood bridge, and $480,000 for the Main St. bridge, and assurances that the federal and provincial governments would each contribute $180,000 to the cost of the Norwood bridge—about 60 per cent. of the entire cost, and 25 per cent. each to the cost of the Main St. bridge. The balance of the cost of the Norwood bridge was to be shared between the two cities, while that of the Main St. bridge was to be borne by the City of Winnipeg. Efforts were then made to obtain from the Winnipeg Electric an agreement to share in the cost of both bridges. The president of the Company promised to recommend to the directors the approval of an arrangement whereby the Company would pay interest not exceeding 5½ per cent. and sinking fund payments on such amount of money as might be necessary to build street car tracks on both bridges, together with any additional outlay which might be necessary to connect up the existing tracks with the bridges and any other changes which might result from their construction, the entire capital sum for which the Company should be responsible not to exceed $50,000. This proposal, however, was not acceptable, and the two cities went on with the work without effecting any agreement with the appellant, and, in June, 1931, while the bridges were in course of construction, applied to the

[Page 179]

Municipal and Public Utility Board to compel a contribution from the Company. This application was dismissed but the Board granted leave to the municipalities to reopen the application for the settlement of the terms by which car services across the bridges might be provided when construction was completed. The two cities, therefore, on June 30, 1931, joined in an application to have fixed the amount payable by the Company as its share of the cost of paving and for placing street car rails on both bridges and for the settlement of the terms by which street car services across the bridges might be provided when construction was completed. On this application the Board made an order requiring the Company to pay the entire cost of placing rails, ties and foundations therefor on both bridges and one-half the cost of such works in connection with the approaches to both bridges, and authorizing the Company to charge the expenses occasioned thereby to its street railway depreciation reserve fund—a fund which, it was stated on the argument, does not exist. The amount of the required payments was not stated, but it is said in the appellant’s factum that they will total between $50,000 and $60,000. From this order an appeal was taken to the Appeal Court of the Province of Manitoba. The Appeal Court dismissed this appeal[2], and the Company now appeals from the decision of the Appeal Court.

By s. 119 (a) of the Municipal and Public Utility Board Act, the Board is given power on notice to and hearing the parties interested to require every owner of a public utility to comply with the laws of the Province and any municipal by-law affecting the public utility or its owner,

and to conform to the duties imposed thereby, or by the provisions of its own charter, or by any agreement with any municipality or other owner;

and by subs. (c) of the same section:—

to establish, construct, maintain and operate any reasonable extension of its existing facilities when in the judgment of the Board such extension is reasonable and practicable and will furnish sufficient business to justify the construction and maintenance of the same, and when the financial condition of the owner reasonably warrants the original expenditure required in making and operating such extension.

It is quite apparent from the Board’s memorandum of judgment that it dealt with the application as one for the restoration of an abandoned service, under 119 (a), and

[Page 180]

not as one for the extension of existing facilities under 119 (c). In fact the chairman in his judgment distinctly states that

notwithstanding that much of the evidence submitted was referable to the extension of existing facilities, the Board regards the application as one for the renewal of the former services which were temporarily abandoned because of the condition of the old bridges.

No consideration was given therefore to the question as to whether the financial condition of the Company reasonably warranted the expenditure which was ordered, without which by the express terms of 119 (c) no order could properly be made if the application were treated as one for the extension of existing facilities. As a matter of fact the Board itself, in dismissing the application to compel the Company to contribute to the cost of the new bridges, stated that the evidence was abundant that then and for some time this utility was not meeting and had not met costs properly chargeable to service with little or nothing whatever for the use of large sums of money fixed irrevocably in the assets of the utility, and found that the conditions existing were not those on which it should make an order grounded on 119 (c). It is perfectly clear, therefore, that the validity of the order appealed from must rest upon 119 (a), and that it can be justified only as an order requiring the Company to perform some duty or obligation which was imposed upon it by some Act of the Legislature or by some municipal by-law or by the provisions of its own charter or by some agreement with either of the two cities or other owner.

It is not contended that there is any provision in the Company’s charter by which any such obligation is imposed as that which the Board has ordered. No provision of any Act of the Legislature was cited as the ground of the Company’s liability to make the payments which the order requires. The only municipal by-laws and agreements, as regards the City of St. Boniface, which are relied upon by that City, are those which have already been mentioned, viz: the by-law of 1893 granting to the Company the right to construct and operate single or double lines of street railway on the streets of the town; the by-law of 1902; the agreement entered into between the Norwood Improvement Co. and the Railway Co. in 1904; and that of 1909 between the Improvement Co. and the City, in which the Railway Co. joined.

[Page 181]

The by-law of 1893 granting the franchise to the Company made no mention of maintaining an interurban service across Norwood bridge or any other bridge. The only provision in it that can be relied upon is that of paragraph 3, that the fares to be charged shall not exceed those then charged in Winnipeg and that no more than one fare was to be paid for any continuous trip, “this to include a continuous trip from the Town of St. Boniface to the City of Winnipeg, or from the City of Winnipeg to the Town of St. Boniface”. In no view can this be said to imply an agreement on the part of the Company to provide a service across the old Norwood bridge which, it would seem, was not even in existence at that time.

The appellant’s obligations in respect of maintaining a service across that bridge are grounded wholly on the Company’s agreement of 1904 with the Norwood Improvement Co. and in the agreement by which the City purchased the bridge from that corporation in 1909 and in which the Railway Co. joined. These obligations have already been pointed out. They are clearly limited, so far as repairs are concerned, to the surface of the bridge between the rails of a single track and for two feet on the outside of each rail, and, as to the strengthening or altering of the bridge, to making the bridge sufficient for the purpose of running its own street cars over it, and then only during the continuance of that agreement. Neither of these agreements contemplated any obligation on the part of the appellant to strengthen or alter the bridge beyond the requirements of its own single track service. Most assuredly it never contemplated that the Company should be charged with the duty of strengthening or altering the bridge to such an extent as to make it sufficient to endure the increasing load and strain of motor cars and motor trucks and all other traffic. It must be remembered that the Norwood Improvement Co. built and owned the bridge and that the City acquired it from this company, not only with all the latter’s rights under its agreement with the Railway Co., but with the Improvement Company’s obligations under that agreement as well, and that one of these obligations was that if the Improvement Co. should at any time take up the rails or that part of the bridge covered by the rails for the purpose of altering or repairing the bridge or for any other

[Page 182]

purpose within the province or privilege of the Improvement Co., it should replace them at its own expense; also, that the City, by the supplementary agreement of March, 1909, undertook to make and keep the bridge as a public highway for the free passage of the public and the cars and passengers of the Railway Co.

The evidence by no means shews that the stoppage of the car service over the bridge was due to any default on the part of the Company. On the contrary it shews that it was brought about by the report of the City’s own consulting engineer, and points rather to the conclusion that, while the Company was prepared to discharge its obligations in respect of this service, the City itself failed to heed the recommendations of its own engineer and to take any steps to control or curtail the motor and other traffic which was the real cause of rendering the bridge unsafe.

It is to be borne in mind too, that no responsibility rests on the Company for the taking down of the old bridge and its replacement by the new one. That responsibility rests wholly on the City of St. Boniface as the owner of the structure, which entered into the agreement with the City of Winnipeg to make the change without the consent or approval of the Company. Had the old bridge remained and been kept safe for a single track street car service, the Company’s liability would have been at most to keep the pavement between its rails and two feet on either side of its track up to the standard of the pavement maintained on the rest of the bridge by the City, and the City, had it removed the railway tracks for any purpose, would have been required, by the express terms of its agreement, to replace them at its own expense. We think that when it took down the entire bridge in the absence of any new agreement with the Company it relieved the latter of any further obligation in respect of its agreement with the former owner in 1904 or with the City itself in 1909, and are quite unable to appreciate upon what ground it can be said that there was any contractual obligation on the part of the Company either to contribute to the cost of the new bridge or to pay for the substitution of a double track over it and its approaches in lieu of the single track on which it maintained its former service.

[Page 183]

The City may have been fully justified on grounds of public convenience and justice to the residents of St. Boniface, who were dependent on the old service for transportation to and from Winnipeg, in undertaking the construction of the new and larger work, designed for a double track and of a strength sufficient to carry street railway cars twice the weight of the cars which have all along been sufficient for the Company’s traffic in and about Winnipeg, but, failing the negotiation of any new agreement with the Company, the Municipal and Public Utility Board, in our judgment, had no authority under their Act to require these payments from the Company, either as a statutory or contractual liability, or as payments necessitated by the renewal of the former service. Although it may be, as the Board states, that this service was temporarily abandoned because of the condition of the old bridges, the Company cannot fairly be said to be responsible for such abandonment, as already intimated, while the construction of the new and larger bridges was undertaken and carried to completion without any new agreement being entered into with the Company and at a time when it was providing a substituted service with the consent of both municipalities. Even if the Board had power to order a renewal of a former service—the ground upon which the Board states it dealt with the application—we cannot perceive upon what principle it can impose upon the Railway Co. any further outlay than that for which it was liable in the maintenance of such former service. The plans agreed upon between the two cities provided for the construction of both bridges on different alignments than those of the old bridges, necessitating additional expense in the building of approaches and otherwise, and for a double track instead of the former single track. An order requiring the Company to pay the entire cost of placing two lines of railway, ties and foundations, across the whole length of both bridges and one-half the cost of the new approaches, manifestly cannot be justified as an order for the renewal of the old service, with respect to which, under its agreements with the City of St. Boniface, the City agreed, in the event of its removing the rails of the single track, to replace them at their own expense.

[Page 184]

As regards the City of Winnipeg and the Main Street bridge over the Assiniboine River, the franchise granted to the Company by the City of Winnipeg is found in by-law 543 of that city. S. 12 of this by-law provides that

The City shall have the right to take up the streets traversed by the rails, either for the purpose of altering the grades thereof, constructing or repairing drains, or for laying down or repairing water or gas pipes, or for all other purposes now or hereafter within the province and privileges of the City, the same being replaced by and at the expense of the City, without being liable for any compensation or damage that may be occasioned to the working of the railway or to the works connected therewith.

Although it was stated on the argument that there was no definition at that time that a street included a bridge, the Court of Appeal points out that under both the Winnipeg and St. Boniface charters the word “street” includes the word “bridge”. In any event, s. 12 of by-law 543 contains practically the same provision in respect of streets as s. 3 of the agreement of 1904 between the Norwood Improvement Co. and the Railway Co. in respect of rails on the Norwood bridge, namely: that if the City should take up any of the streets traversed by the rails of the Company for any purpose within the province or privileges of the City, the same should be replaced by and at the expense of the City—a principle which the Board in its judgment described as not unreasonable.

The situation, therefore, with respect to the taking down of the Main St. bridge is practically the same as that with respect to the taking down of the Norwood bridge, Main St. bridge being owned and controlled by the City of Winnipeg, as Norwood bridge was owned and controlled by the City of St. Boniface.

Reliance was placed, in behalf of the City of Winnipeg, upon s. 15 of by-law 543, which gives the council the right by written notice served on the Company to demand the construction of any new line or lines within the city limits on any street or streets. This section seems to have no application, however, to the present question, for the record does not shew that there was any demand made by the council upon the Company for the construction of any new line of railway, and certainly there was no obligation upon the Company either to build or to share in the cost of building of a new bridge under any provision in the by-law. In point of fact, the appellant had its tracks on Main St. South between the two bridges and over the old Main St.

[Page 185]

bridge when it was taken down. There is, then, no more ground for the contention that there was any contractual liability upon the part of the Company to the City of Winnipeg, as the owner of the Main St. bridge, to provide new tracks over that bridge and approaches thereto, than there is for the contention that there was such liability to the City of St. Boniface to provide new tracks over the Norwood bridge and approaches thereto.

The matter seems to be one calling for the negotiation of a new agreement between the two cities and the appellant company. Failing such an agreement between the parties, it will then be for the Board to say whether, in view of all the circumstances and the financial position of the Company, it is justified in ordering the Company to operate a new service over these bridges in lieu of the service which the Company substituted for the former service across the old bridges with the consent of the City, and if the promised revenues from such new service and the financial condition of the Company warrants the Company in assuming any financial responsibility therefor.

In the meantime the Board’s order must be set aside and the appeal allowed with costs.

Appeal allowed with costs.

Solicitors for the appellant: Guy, Chappell, Duval & McCrea.

Solicitor for the respondent, City of Winnipeg: Jules Prudhomme.

Solicitor for the respondent, City of St. Boniface: F. Trafford Taylor.