Date: 19990422
Docket: T-2906-93
BETWEEN:
DAME FRANCES MAHER and
JEAN MAHER,
Plaintiffs,
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
Defendant.
REASONS FOR ORDER AND ORDER
BLAIS J.
FACTS
[1] This is an action against the Crown to recover compensation which the plaintiffs feel they are entitled to receive as the result of an expropriation by the defendant of land which the plaintiffs claim to have owned. The plaintiffs are the legal heirs, executors and fiduciary legatees of their father the late Thomas Maher, who died on March 7, 1980.
[2] The late Thomas Maher, as president and virtually sole shareholder of the Cie d'Immeubles du Lac St-Joseph Ltée, was the owner of several parcels of land and forest concessions in the Lac St-Joseph area.
[3] The Cie d'Immeubles du Lac St-Joseph Ltée had purchased a large part of the girder railway on November 21, 1944 from the Quebec and Lake St-John Railway Company.
[4] Following the purchase of this property the girder railway became a vehicular road used largely by trucks transporting timber.
[5] On August 11, 1950 the Cie d'Immeubles du Lac St-Joseph Ltée sold most of this road, commonly known as the old girder railway, to the Municipal Corporation of Shannon, and the road subsequently became a public road.
[6] The contract for the sale of this now public road included two clauses which read as follows:
| 3. The party of the Second part binds itself not to sell any part of the said road and to use it entirely and exclusively for building the main road leading from the 4th range to the 10th range road. |
| 4. Should the preceeding clause not be respected in whole or in part, the present cession will be ipso facto annulled. |
[7] Later, on October 1, 1957, the Cie d'Immeubles du Lac St-Joseph Ltée sold all its remaining forest concessions and all its immovable property to the company Murdock Lumber Ltée.
[8] This latter sale of October 1957 also included the sale of the remainder of the old girder railway beginning at the 10th concession of the Parish of Ste-Catherine.
[9] On August 3, 1959, nearly two years after the sale of the remaining immovable property to Murdock Lumber Ltée, the late Thomas Maher, the plaintiffs" father, proceeded to liquidate and wind up the Cie d'Immeubles du Lac St-Joseph Ltée.
[10] As the road was still used as a public road at that date, it was not involved in the liquidation and no mention whatever was made of the contingent right resulting from the resolutory clause.
[11] On September 1, 1965, the Department of National Defence proceeded to expropriate several lots and forest concessions in the Lac St-Joseph and Seigneurie Fossambault area in the Parish of Ste-Catherine, including in particular the concessions of Murdock Lumber Ltée.
[12] Pursuant to its notice of expropriation the Department of National Defence simply took possession of the old girder railway, which was in fact lot 763, and the branch line associated with the railway, which was lot 858.
[13] Although the Department of National Defence paid Murdock Lumber Ltée a substantial sum, there was no evidence that any amount was paid to cover the part of the road at issue, namely lots 763 and 858.
[14] The plaintiffs learned from reading a status notice published by the Quebec Public Curator in "Le Soleil" of December 16, 1992 that certain property had been abandoned by artificial persons, including the Cie d'Immeubles du Lac St-Joseph Ltée.
[15] The plaintiffs therefore contacted the Public Curator and found that the land representing part of the public road was in dispute.
[16] The plaintiffs subsequently took steps to ensure that the road which had previously been sold to the Municipal Corporation of Shannon should be reconveyed to them in accordance with the provisions of paragraphs 3 and 4 of the deed of sale of August 11, 1950.
[17] The purpose of this conveyance was to return the right of ownership of the said land and lots 763 (pt) and 858 in the official cadaster of the Parish of Ste-Catherine, Portneuf Registry Division, to the estate of the plaintiffs by the successive effect of dissolution of the company and death of the plaintiffs" father.
[18] The Department of National Defence was not a party to these transactions and does not appear to have been informed of the said transaction, unless belatedly.
[19] When the plaintiffs had resumed ownership of lots 763 and 858 in the official cadaster of the Parish of Ste-Catherine, Portneuf Registry Division they, by a notification dated October 22, 1993, claimed fair and reasonable compensation, with the applicable interest, from the defendant as a result of the expropriation of the said land.
[20] As they had heard nothing from the defendant the plaintiffs brought this action claiming a total of $1,123,300 in capital and interest to the date of the action, damages determined in accordance with an expert opinion prepared by Les Entreprises Solivar et Serviteck Inc.
PLAINTIFFS" ARGUMENTS
[21] The plaintiffs" arguments may essentially be summarized as follows:
| (a) the Cie d'Immeubles du Lac St-Joseph Ltée, of which the late Thomas Maher was president and shareholder, was the owner of the girder railway from 1944 to 1950, the point at which the Cie d'Immeubles du Lac St-Joseph Ltée sold most of this railway to the Municipal Corporation of Shannon, and it subsequently became a public road; |
| (b) at the time of the expropriation by the Department of National Defence in 1965 the girder railway which had become a public road ceased to be used as a public road, since the defendant began using it for her personal ends; |
| (c) at the time of the expropriation in 1965 no compensation whatever was paid for the public road of which the defendant took possession in 1965; |
| (d) the plaintiffs, who ultimately became owners of the said parts of lots 763 and 858 making up the said road, have never received any compensation since the defendant began using the said road in 1965; |
| (e) the defendant has never paid the slightest compensation as the result of this expropriation, a point which is not in dispute; |
| (f) the plaintiffs are entitled to claim the fair compensation which they were entitled to receive at the time the defendant unilaterally took possession of the disputed lots on September 1, 1965. |
DEFENDANT'S ARGUMENTS
[22] Counsel for the defendant argued that under the deed of sale by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock Lumber Ltée, all of lot 763 was sold to Murdock Lumber Ltée and that the Court should conclude that all rights which the Cie d'Immeubles du Lac St-Joseph Ltée may have had pursuant to clauses 3 and 4 of the deed of sale were transferred to Murdock Lumber Ltée, and were then acquired by the Department of National Defence under the expropriation which occurred in 1965.
[23] The defendant further argued that even if the rights conferred by clauses 3 and 4 of the deed of sale still belonged to the Cie d'Immeubles du Lac St-Joseph Ltée at the time of its liquidation and winding up, and even if they were overlooked, this oversight caused the rights to devolve on the Public Curator of Quebec, not the late Thomas Maher.
[24] Counsel for the defendant also argued that expropriation compensation was paid to Murdock Lumber Ltée for lot 763 in the Parish of Ste-Catherine, referring in this connection to a release published in the Bureau de la publicité des droits in Portneuf on November 30, 1967, as No. 179155.
[25] Counsel for the defendant also challenged the deed of reconveyance to the plaintiffs by the Municipality of Shannon.
[26] Counsel for the defendant submitted that the Municipal Corporation of Shannon had not observed the provisions of the Municipal Code on disposition of the land. In this connection counsel for the defendant suggested that the provisions of the Municipal Code are peremptory; the municipality could not have conveyed the land as it did in 1993 and the conveyance is void.
[27] Counsel for the defendant argued that the deed of reconveyance of the road was absolutely void since it was made gratuitously, contrary to s. 6(1.1) of the Municipal Code, adding that as it was a conveyance of expropriation compensation this would also make the deed void.
[28] Counsel for the defendant suggested that resolutory clauses 3 and 4 in the 1950 deed of sale had become obsolete and had lapsed when the company ceased its commercial operations in 1957.
[29] Counsel for the defendant suggested that the consideration for which the road was initially conveyed to the Municipality of Shannon in 1950 by the company was that it could benefit from access to a publicly maintained road for the purposes of its business.
[30] Counsel for the defendant further suggested that the existence of the public road in question was a factor which operated in the company's favour when the selling price was calculated at the time the Cie d'Immeubles du Lac St-Joseph Ltée sold its land to Murdock Lumber Ltée in 1957.
[31] Counsel for the defendant further suggested that there was a double sale of lot 763 and that arts. 1487 and 1488 of the Civil Code of Lower Canada regarding double sales apply here.
POINTS AT ISSUE
[32] Did the plaintiffs at some point acquire any kind of right to lots 858 and 763 in the Parish of Ste-Catherine, representing the public road sold to the Municipality of Shannon?
[33] If the plaintiffs acquired any kind of right at some point, did that right continue to be valid after the expropriation made by the defendant?
[34] If at some point the parties had a right of some kind over the lots representing the road, was compensation for that right paid at the time of the expropriation by the defendant?
[35] If there was no compensation for the plaintiffs" rights at the time of the expropriation, what should be the quantum that represents fair compensation as a result of the expropriation?
ANALYSIS
[36] The Court will proceed to analyse the arguments made by the two parties point by point.
[37] To begin with, I must dismiss the defendant's argument that all of lot 763 was sold to Murdock Lumber Ltée pursuant to the deed of sale by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock. The Cie d'Immeubles du Lac St-Joseph Ltée could not sell the same land twice. The Cie d'Immeubles du Lac St-Joseph Ltée had already conveyed the land to the Municipal Corporation of Shannon seven years earlier and the title was duly registered.
[38] As to the sale to Murdock Lumber Ltée in 1957, only the remainder of the girder railway which was not included in the 1950 sale to the Municipal Corporation of Shannon could be the subject of that sale, and to hold otherwise would be completely contrary to the rules laid down in the Civil Code as well as the well-settled case law on the point.
[39] As to the Public Curatorship Act, whether reference is to the law applicable at the time the notice of expropriation was published or at the time the public notice was published by the Public Curator, in neither case can I conclude that the Public Curator became owner of the said land by the lapse of time. I consider that the Public Curator only did his duty, namely locating the true owner of the abandoned property and ensuring that the estate or the true beneficiaries following the winding up of the company could act on their own behalf without the need for intervention by the Public Curator.
[40] It was the Public Curator himself who took the decision to issue a public notice seeking the owners of the abandoned property. If the Public Curator had regarded himself as owner in these circumstances, he would not have taken steps to find the true owners of the property abandoned by the company. The Public Curator can only act on a temporary basis, and once the true owner appears the Public Curator has nothing more to do with the matter.
[41] It seems clear that the Public Curator did not undertake any administration of this abandoned property. When the Municipal Corporation wished to clarify its ownership titles, both the municipality and the Public Curator realized that the question had to be clarified in accordance with the provisions of ss. 24 and 204 of the Public Curatorship Act, which are clear and tend to show that there was no basis for the Public Curator to claim ownership of the said lots; and no claim or evidence to this effect was submitted to the Court.
[42] The defendant"s claims that the Public Curator became owner of the said abandoned property per iure on April 15, 1993 is entirely inapplicable in the circumstances, and I reject it.
[43] As to the argument that expropriation compensation was paid to Murdock Lumber Ltée, referring in this regard to a release published in the Portneuf Bureau de la publicité des droits on November 30, 1967 as No. 179155, counsel for the defendant did not see fit to file the said document and so, in the absence of such evidence, it is difficult for the Court to consider it.
[44] However, I should also point out that as the land was previously conveyed to the Municipal Corporation of Shannon, and could not be part of the estate of Murdock Lumber Ltée, in no event could a payment made to Murdock Lumber Ltée, if there was one, be regarded as expropriation compensation paid for lot 763 of the Parish of Ste-Catherine, since at the time of the expropriation it was part of the property of the Municipal Corporation of Shannon.
[45] As to the defendant's argument that the deed reconveying the road is absolutely void since it was made gratuitously contrary to s. 6(1.1) of the Municipal Code, and that further as this constituted a conveyance of expropriation compensation it made the deed void as well, I must also dismiss this since the deed of conveyance concluded on August 4, 1993, by which the Municipal Corporation of Shannon conveyed lots 763 and 858 of the official cadastre of the Parish of Ste-Catherine was not made without consideration, but rather in consideration of the deed earlier concluded in 1950 by which the Cie d'Immeubles du Lac St-Joseph Ltée had sold it the said road beds for the sum of 1$ and the undertaking to carry out improvement work worth $4,000 and ensure that the road remained a public road.
[46] As the road lost its status of a public road at the time of the 1965 expropriation, this event caused resolutory clauses 3 and 4 of the 1950 deed to become applicable.
[47] I should also add that if the defendant wished to prove that the deed of conveyance to the plaintiffs from the Municipal Corporation of Shannon was void she should have found some other objection, since this was an official deed of the Municipal Corporation concluded before a notary, an authentic deed duly registered with the Portneuf Registry Division on May 5, 1993.
[48] I also do not see in what way resolutory clauses 3 and 4 of the 1950 deed of sale became obsolete and had lapsed, when the company ceased its commercial operations in 1957. This argument must also be dismissed.
[49] The defendant's contention that the sale of the road to the Municipality of Shannon was made in consideration of the seller benefiting from access to a publicly maintained road for the purposes of its business is purely hypothetical and appears nowhere in the ownership titles submitted to the Court: no evidence to this effect was laid before the Court and I must therefore dismiss this contention as well.
[50] Additionally, regarding the existence of a public road in question as a factor which operated in the company's favour when the selling price was calculated at the time the Cie d'Immeubles du Lac St-Joseph Ltée sold its land to Murdock Lumber Ltée in 1957 is also an assumption.
[51] This argument is not based on any factual evidence, and what is more, I can conclude from this suggestion by the defendant that there was an admission that the road represented a certain value to the land located along it, so that the defendant, which became its sole owner as a result of the 1965 expropriation, received a certain benefit without having spent a cent to obtain ownership of it.
[52] The Cie d'Immeubles du Lac St-Joseph Ltée became owner of lots 763 and 858, representing the girder railway and all the surrounding forest lots, as the result of two successive purchases, one in 1937 and the other in 1944.
[53] Accordingly, it was after 1944 that the plaintiffs" father dismantled the railway and began using it as a forest road.
[54] When the defendants' father decided to sell the road bed in 1950 the municipality required that the road be in good condition, and the reconveyance clauses included in the 1950 contract were entirely consistent with practice in the sale of land.
[55] At that time it was not possible to foresee that the said road would again become private and be the subject of a notice of expropriation 15 years later, in 1965, and it was not established that there was any legislation as a result of which the Court could conclude that the reconveyance clause could not be set up against the Department of National Defence.
[56] The plaintiffs have never maintained that the expropriation was not valid against the lands covered by the 1965 notice of expropriation, but they have argued that if the Department of National Defence was entitled to proceed with the expropriation the expropriated parties were also entitled to be compensated.
[57] I have carefully examined the plans and accompanying documents filed at the hearing, and although there may have been certain minor discrepancies, I have no hesitation in saying that the position submitted by counsel for the plaintiffs is clearly that the plaintiffs' father was in fact owner both of the road bed known as the girder railway and of lots 763 and 858 in the official cadastre of the Parish of Ste-Catherine, Portneuf Division, and the surrounding lots.
[58] Moreover, it was as owner that the late Thomas Maher proceeded first with the conveyance of the road to the Municipality of Shannon in 1950, and later, in 1957, with the sale of all the remaining land to Murdock Lumber Ltée.
[59] A mistake in fact occurred when the Department of National Defence proceeded to expropriate all the land owned by Murdock Lumber Ltée in 1965, as no compensation was paid to the owner of the land represented by the girder railway, namely lots 763 and 858 of the official cadastre of the Parish of Ste-Catherine, which were the subject of the expropriation.
[60] If in 1965 the Minister of National Defence had wished to pay compensation directly to the Municipality of Shannon, the latter would have been required by the provisions of its deed of purchase to reconvey ownership in the said lots to the then owner, who would have been entitled to receive the amount of the expropriation compensation.
[61] At that point, pursuant to the right of ownership held over its property by a liquidated company, the property reverted to its sole shareholder, and on his death, in accordance with the rules of succession, to the plaintiffs at bar.
[62] Although several years have passed since these transactions, the fact remains that the plaintiffs are entitled to be compensated.
[63] They also cannot be blamed for delay since it was not until 1992 that they learned that the property was regarded as property abandoned by a liquidated company, and took the necessary steps to protect their rights. It was as the result of a refusal by the defendant to compensate them in accordance with law that in 1993 they brought an action to recover just and reasonable
compensation.
[64] I have also considered the affidavit of Jeanne Prévost, who has died since these proceedings began: this affidavit is attached to Exhibit P-7, the deed of conveyance by the Municipal Corporation of Shannon to the plaintiffs.
[65] The affidavit gives a clear and precise description of the circumstances surrounding the transactions involving the Cie d'Immeubles du Lac St-Joseph Ltée, in particular the liquidation of the company.
[66] It should be noted that Jeanne Prévost was secretary of the Cie d'Immeubles du Lac St-Joseph Ltée for nearly 25 years, from 1935 to 1959, that is until the company was wound up.
[67] As to the argument by counsel for the defendant that there was a double sale of lot 673 and that arts. 1487 and 1488 of the Civil Code of Lower Canada on double sales applies here, I must once again dismiss this argument since there was no double sale of the same land, since the reference to lot 763 in the deed of sale by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock Lumber Ltée in 1957 states that it refers in particular to rights of way which belonged to the Cie d'Immeubles du Lac St-Joseph Ltée, in accordance with a detailed description at pp. 29 and 30 of Exhibit P-4.
[68] The detailed description of the road sold, namely lots 763 and 858 in the cadastre in the Parish of Ste-Catherine, which appears in the deed of sale by the Cie d'Immeubles du Lac St-Joseph Ltée to the Municipal Corporation of Shannon, namely Exhibit P-3, is very clear and the notation appearing at p. 31 of Exhibit P-4 to the effect that lot 763 in the cadastre in the Parish of Ste-Catherine was sold by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock Lumber Ltée is obviously a mistake, and as it was part of a deed of sale 77 pages long it is understandable that the mistake was never noticed.
[69] The notice of expropriation filed on September 2, 1965 provides a plan and a description of the land concerned.
[70] As to lot 763, this is clearly mentioned in paragraph 1(c) of the notice of expropriation as being covered by the expropriation.
[71] Lot 858 is mentioned nowhere although the Department of National Defence took possession of it, as of lot 763.
[72] On reviewing the chain of title the Court found that on September 17, 1937 the Cie d'Immeubles du Lac St-Joseph Ltée proceeded to purchase a number of lots from Consolidated Paper Ltd. Corp., including lots 762 and 763, without warranty.
[73] On November 17, 1944 Cie d'Immeubles du Lac St-Joseph Ltée bought several lots from the Quebec and Lake St-John Railway Company, including lot 763 described as follows:
| Description: a strip of land of various widths being part of the former Gosford branch of the Quebec and Lake St-John Railway Company, and part of the former Quebec and Gosford Railway, or in the parish of Ste-Catherine, county of Portneuf, province of Quebec and more fully described as follows: |
| Parcel 1: That part of said former Gosford branch, being that part of lot 857 in the fourth concession of said Parish lying north of the Public Road to Village of Ste-Catherine, and being bounded to the south-east by the Public Road, to the south-west by lots No. 269 & 270 to the north-west by lot No. 763 and to the north-east by lot No. 273 and coloured red on the attached plan, which is remained annexed to these present, after having been signed by the parties before the undersigned notary for identification. |
| Parcel 2: That part of said former Quebec & Gosford Railway being part of lot No. 763 in the fourth concession of said parish, and being bounded at one end to the south-east by lot No. 857, and at the other end, to the north-west by the Jacques Cartier River, and on one side to the north-east by lots No. 271, 274 and 275, and on the other side to the south-west, by another part of said lots No. 271, 275 and colored green on the attached plan. |
| Parcel 3: That part of said former Gosford branch, being part of lot No. 856 in 5ième concession of said parish, and being bounded at one end the the [sic] south by the Jacques Cartier River, and at the other end to the north by a Public Road and on one side, to the west by part of lots No. 408, 409 and 856, and on the other side, to the east, by another part of said lots No. 408 and 409, and coloured red on the attached plan. |
| Parcel 4: That part of said former Quebec and Gosford Railway, being that part of lot No. 763 in the 5e, 6e, 7e, 8e, 9e, 10e and 11e concessions of said parish, and bounded at one end to the south-east, by the road beween lots No. 856 and 763, ant at the other end to the north-west by the Township of Gosford in the county of Portneuf, and on either side by the remaining parts of said concession, and shown coloured green on the attached plan, after reserving thereoff and therefore the Public Road crossed by said parcel of land. |
| Parcel 5: That part of said former Gosford branch being lot No. 858 in the 7e and 8E [sic] concessions of said parish being shown coloured red on the atached plan, after reserving thereof and therefore the Public Road and the part of lot No. 763 sold by these presents. |
| Parcel 6: A piece or parcel of land of irregular form, hereof the lot No. 762 concession 11e of the official place and book of reference of the Parish of Ste-Catherine, county of Portneur [sic] province of Quebec and shown coloured yellow on the attached plan. |
| The land outlined blue on the attached plan, on either side of the Jacques Cartier River, leased to the municipality of the Parish of Ste-Catherine, and being part of parcel 2d and all of parcel 3e, is included in the sale of said parcels, subject to the terms of the lease. The former railway bridge over the Jacques Cartier River, is the property of the municipality of the Parish of Ste-Catherine. |
[74] As lot 763 appears to have been sold both by Consolidated Paper on September 17, 1937 and by the Lake St-John company in 1944, this could have presented a problem. However, as both deeds of sale were made for the benefit of the same company, namely the Cie d'Immeubles du Lac St-Joseph Ltée, by the effect of merger the latter company became undisputed owner of lots 763 and 858, which are the old Quebec Gosford railway line and the old Quebec Gosford girder railway line, and its branch line.
[75] As the said lot 763 was clearly conveyed to the Municipality of Shannon in 1950, the chain of title is quite clear in demonstrating that the ownership of the said road was really conveyed to the Municipality of Shannon.
[76] As to the reference to lot 763 in the deed of sale by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock Lumber Ltée, as this sale was made seven years later Murdock Lumber Ltée could not claim to have ownership of the said lot and could only bring an action for damages against the seller, which was not done, or at least was not brought to the Court's attention.
[77] As to lot 858, this appears to not have been sold to Murdock Lumber Ltée by the Cie d'Immeubles du Lac St-Joseph Ltée in 1957, and there was also no description of it at the time the notice of expropriation was filed.
[78] The part of lot 763 sold by the Cie d'Immeubles du Lac St-Joseph Ltée to Murdock Lumber Ltée is part of lot 763 in the 11th concession and includes a right of way in the 10th concession, which in fact represents a small part of lot 763.
[79] When the Cie d'Immeubles du Lac St-Joseph Ltée sold to Murdock Lumber Ltée in 1957, it had already sold the road bed, that is lot 763 from the 4th to 10th concessions, pursuant to the deed of sale concluded with the Municipal Corporation of Shannon (Exhibit P-3). It therefore only still had the four rights of way in the 10th concession mentioned above and part of lot 763 in the 11th concession.
[80] As it could not sell more than it had at that time, Murdock Lumber Ltée could not claim to have purchased the road from the 4th to 10th concessions, and at this stage I have no hesitation in accepting the plaintiffs' arguments to this effect.
[81] The examinations of the two mayors, made out of court with leave, showed that the municipality always maintained the road and its branch line between 1950 and 1963, the period in which the Municipality of Shannon was owner.
[82] In his argument counsel for the defendant properly argued, on the filing of the plan of the description of the land by his client, that:
| . . . such land, by such deposit, shall thereupon become and remain vested in Her Majesty.1 |
[83] This claim was not disputed by the plaintiffs. The latter argued instead that from the time the notice of expropriation was filed, lots 763 and 858, used until then as a public road for the benefit of the Municipality of Shannon, lost this status of a public road and reverted to the property of the company which had sold them this road pursuant to clauses 3 and 4 of the 1950 deed of sale (the resolutory clauses). Further, even if ownership of the land passed to Her Majesty pursuant to the Expropriation Act, the defendant in the case at bar had a duty to negotiate with the true owners of the land, who in this case were the plaintiffs.
CASE LAW
[84] Counsel for the defendant submitted a precedent, André Cloutier et autres c. Compagnie des chemins de fer nationaux du Canada (Canadien national) et Temiscouata Railway Company et autres, [1996] R.J.Q., 1650, a judgment of Jean-Roch Landry J.
[85] I have to say at the outset that there is a fundamental difference between that case and the case at bar, since neither in the legislation nor in the contracts in that case was there any right of reversion or express resolutory clause authorizing reversion of the land conveyed by the applicants to the railway company.
[86] In Cloutier the applicants simply alleged that all the land was conveyed for the construction and operation of a railway, and that when the railway ceased operations this was the equivalent of a reversion clause and meant that the land reverted to the owner which had previously conveyed it.
[87] In Cloutier the federal government also undertook an expropriation, but after expropriating the said land it was handed over to the Canadian National Railway Company for use as a railway, which once again is quite different from the case at bar, since at the time of the expropriation by Her Majesty lots 763 and 858, constituting the public road owned by the Municipality of Shannon, lost their status as a public road and this is the point at which clauses 3 and 4 of the 1950 contract took effect. Moreover, in Cloutier the expropriation procedure was challenged by the applicants and their arguments were properly dismissed.
[88] Once again, in the case at bar the plaintiffs have not questioned the right to expropriate in any way, and I conclude, with all due respect, that Cloutier cannot be applied to the case at bar.
[89] Counsel for the defendant also referred to Louis Viau c. Le Procureur général de la province de Québec et la Commission de transport de la Communauté urbaine de Montréal, [1978] C.A. 223. That judgment raises several interesting points. The property owners had transferred a strip of land for consideration to the predecessor in title of the Commission de
transport de la Communauté urbaine de Montréal. That sale included the following conditions:
| The present sale is so made... for the consideration that the said company shall be bound.. to construct and maintain on the said strip of land a railway with cars running thereon, the said vendor expecting that this will have the effect of increasing the value of the residue of the said farm... If the said company happens to cease to operate the said railway the said strip of land will revert in full property to the said vendor... |
[90] After over 60 years, when a bus service was substituted for the tram service, the appellants, who were the heirs of the assignees as in the case at bar, served a notice of reconveyance on the Commission and on the City of Montréal based on the resolutory clauses.
[91] In that case, when at some point the expropriation occurred the resolutory clause did not apply as a public transportation service was still provided on the strip in question. In that case the Court concluded that the economic condition of maintaining the public transportation service was the principal consideration, in that the sellers at the time wanted the public transportation service to go as far as their land, in order to confer an additional value on their land at the time of the sale.
[92] I quote Bernier J.A. at 227:
[TRANSLATION]
| I concur in the opinion of the Régie. The purposes of the clauses in a contract are to define the subject-matter of the contract, the nature and the scope of the reciprocal obligations of the parties. The parties are not deemed to have spoken in vain. The case at bar involves a limit as to time, the occurrence of which terminated the obligation, and so resulted in extinction of the incidental resolutory clause. This is what occurred when the sellers fully obtained the interest, the objective, which they were seeking, when they sold all parcels of the residue of their respective farms. (My emphasis.) |
[93] Once again, the particular difference between this case and the case at bar is the time at which the expropriation took place. In Viau, at 227:
[TRANSLATION]
| The subject Commission was still providing on the strip of land which had been the subject of the conveyances in 1895 the public transportation service mentioned therein; the specified event had not occurred; and accordingly the subject Commission was still owner of the strip at that time. |
| Additionally, so long as the resolutory condition had not expired the appellants still held their conditional right ad rem, namely ownership under a suspensory condition of the strip in question, a right which they could dispose of and which they gave up by the expropriation. |
| However, like the Régie I consider that the resolutory clause expired, became outdated or invalid, when the sellers realized what for them was the consideration in conveying this strip of their farms, namely when they realized the additional value which the proximity of the public urban transportation service conferred on the residue of their farms. |
[94] The comparison between Viau and the case at bar is significant in that in Viau the Court concluded that the consideration was clearly mentioned in the resolutory clause, namely that the conveyance of the land to the transportation company was specifically done to increase the value of the sellers' lands located alongside it.
[95] The Court concluded that as the applicants no longer had any land alongside the strip the consideration for which the conveyance was made had been received and the resolutory clause had become void.
[96] There is no consideration of this kind mentioned in the contract in the case at bar and the presumptions suggested by counsel for the defendant, to the effect that the land was conveyed to the Municipality of Shannon because the Cie d'Immeubles du Lac St-Joseph Ltée intended to continue using it gratuitously for its forestry operations, remains speculation since, first, this is not contained in the deed of conveyance, no evidence to this effect was submitted and the written testimony of the two former mayors of the municipality simply indicated that the municipality had an interest in the purchase of the said lots 763 and 858.
[97] I cannot therefore conclude that this decision applies and consider that the resolutory clause has lapsed.
[98] Counsel for the defendant submitted for my consideration the judgment in French c. Mulgrave et Derry (Cantons), [1990] A.Q. No. 1610.
[99] I have examined the said judgment and find that it is an appeal from a judgment rendered for the purpose of setting aside an agreement between a municipal corporation and an individual.
[100] In the case at bar, I do not think I have jurisdiction to decide whether the deed of conveyance concluded between the Municipal Corporation of Shannon and the plaintiffs on August 4, 1993 is valid pursuant to the provisions of the Municipal Code: the document submitted to the Court as Exhibit P-7 is a valid document, an authentic deed which was duly registered on May 5, 1993, and if any one wished to have it quashed they certainly could not achieve this by applying to the Federal Court of Canada.
QUANTUM
[101] The documentary evidence and the testimonial evidence, both in court and in the out-of-court examinations entered in evidence in court, showed that when the land was sold to the Municipal Corporation of Shannon in 1950 it was in good condition and the plaintiffs' father had spent an additional sum of $4,000 to improve the road bed before he handed it over to the municipality.
[102] It appeared from the evidence submitted to the Court that the Municipality of Shannon maintained the road properly between 1950 and 1965, and the two mayors who testified on the matter out of court in fact said that the road was one of the best in the region.
[103] For the purpose of appraising the value of the land in question the plaintiffs called two witnesses, Claude Thivierge, a civil engineering technician for 28 years hired by the Compagnie Génivar, specializing in infrastructure construction, and Sylvain Miville, a consulting engineer. These two experts testified on the way in which they arrived at the value of the land.
[104] It should be noted that the experts called by the plaintiffs were unable to gain access to the land, owned by the Department of National Defence, until November 18, 1998, that is barely two weeks before the hearing.
[105] As they had made an earlier appraisal based on aerial photographs, they revised downward the appraisal which they had made of the cost of building the said road.
[106] They used unit values based on a copy of a bid dating from 1967 to determine the unit values for construction.
[107] This appraisal was then submitted to Denis Savoie, a certified appraiser with Serviteck Inc., who prepared an appraisal of the land and damages for the land at issue. Denis Savoie's qualifications as an expert were admitted, as were those of Messrs. Miville and Thivierge, who were the subject of examinations and cross-examinations by counsel for the two parties.
[108] The defendant chose not to submit any expert evidence to contradict the appraisal submitted; I see nothing in the evidence to lead the Court to conclude that the appraisal was not made in accordance with industry practice; and I conclude that both the analytical method and the calculations made indicate that the value of the road may be set at $381,747.
[109] Counsel for the defendant suggested that the plaintiffs' arguments that the value of the land in 1965 was $381,747 must be dismissed, since the plaintiffs assumed that the road was new in 1965 and there was no direct proof of the condition of the road in 1965.
[110] I consider the fact that the evidence regarding the value of the road was established in a professional manner with the aid of aerial photographs, and I also take into account the fact that the defendant did not authorize the plaintiffs to have access to the said road to prepare the expert opinion until November 18, 1998, some two weeks before the hearing.
[111] The Court also takes into account the complete absence of any rebuttal evidence as to the value of the land at issue.
[112] In the case at bar the value of the land was determined by the expert witnesses for 1965 using aerial photographs and an appraisal of quantity and unit cost based on an appraisal dating from 1967.
[113] It must be borne in mind that after 33 years it is hard to determine the value of land precisely, especially in the case of construction of a road based on a railway line.
[114] The Court therefore assumes that, although the value of the land must be determined at the date of the expropriation in order to arrive at the value of the compensation, it is also necessary to go back to the date of the sale of the land by the Cie d'Immeubles du Lac St-Joseph Ltée to the Municipality of Shannon, that is 1950, before the road construction work was done.
[115] The Court therefore considers that the work necessary for construction of the road, based on the appraisal made in 1965, was also necessary in 1950 and would probably have been established with a different value which it is impossible to determine precisely at this point.
[116] However, the Court has decided that for purposes of calculation the amount of the cost of building the road, set at $381,747, could be set at the same amount for 1950, applying depreciation for the years of use by the municipality, between 1950 and 1965, a period of 15 years.
[117] Applying a successive depreciation of 2% per annum the value of the land in 1965 would amount to the sum of $281,394.
[118] So far as interest on the capital is concerned, the plaintiffs did not become owners until the deed of reconveyance registered on May 5, 1993.
[119] A notification was sent to the defendant on October 22, 1993, and that is when the plaintiffs' rights were brought to the defendant"s attention.
[120] Referring to s. 31(1) of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, and art. 1618 of the Civil Code of Quebec, therefore, the capital will bear interest at the ordinary rate of 5% per annum as of October 22, 1993, which at April 22, 1999 represents $77,364.08 interest, making a grand total for the value of the land at April 22, 1999 of $358,758.08.
CASE LAW ON QUANTUM
[121] The Court is aware of the argument raised by counsel for the defendant that depreciation of the said land over the years should be taken into account.
[122] In this connection counsel for the defendant submitted a judgment of the Exchequer Court of Canada in 1952, Her Majesty the Queen, on the Information of the Attorney General of Canada v. The Community of the Sisters of Charity of Providence.2 The conclusion of the judgment states:
| That it is fallacious to assume that an asset can be so well maintained that it will remain in as good as new condition indefinitely. |
| Depreciation begins from the moment of its first use and continues not withstanding maintenance. |
| ... It is always necessary to make a careful examination of the asset and consider its structural and functional condition so that consideration may be given not only to the elapsed time of its expectancy of life according to the tables but also to the remaining life that may be expected in the light of its actual condition. |
[123] It is thus accepted that depreciation should be applied for each piece of property. The factors in calculating depreciation are:
- the time lapsed in life expectancy;
- the structural and operational condition;
- the remaining life expectancy, considering its present condition;
- physical deterioration;
- operational and economic obsolescence.
[124] As no operational and economic depreciation occurred to the road between 1950 and 1965, since there was annual and continuous use of the said road by the municipality, only depreciation based on deterioration due to use can be applied.
[125] On the question of depreciation the Court also refers to Quebec (Procureur général) c. L.A. Hébert Ltée, [1999] J.Q. No. 212; Presbyterian Church v. Canada, [1974] F.C.J. No. 1100, and Boivin c. Québec (Procureur général), [1996] A.Q. No. 3505.
[126] Counsel for the defendant submitted the judgement of the Exchequer Court of Canada in 1939, Corporation of the Town of Dartmouth v. His Majesty the King. I conclude from reading that judgment that when commentary and case law appear to coincide in allowing no compensation for expropriated streets, this is on the assumption that the municipality owns the street beds as trustee for the public.
[127] That is not true in the case at bar, where the expropriated road is no longer the property of the municipality, but private property, and will also not become a public road once again but will probably be used as a private road inside the ValCartier military base solely for the use of the defendant, to whom it represents a certain value since if it had not existed the defendant would have to spend at least an equivalent amount to construct it on her own land.
[128] Counsel for the defendant also cited a judgment to the same effect as the preceding one in McDonald v. North Norfolk (Rural Municipality).3
CONCLUSION
[129] The Court considers that the plaintiffs have shown that they are entitled to receive fair compensation for the expropriation of lots 858 and 763 in the Parish of Ste-Catherine.
[130] For all these reasons, the Court orders the defendant to pay the plaintiffs the sum of
$358,758.08, plus the costs of the expert opinion of the Génivar Engineering Firm, set at $5,407.25, as well as the costs of Serviteck Inc., chartered appraisers, also admitted as expert witnesses, in the amount of $5,371.67, plus interest from April 22, 1999.
[131] The whole with costs to the plaintiffs.
| Pierre Blais Judge |
OTTAWA, ONTARIO
April 22, 1999
Certified true translation
Bernard Olivier, LL. B.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT No: T-2906-93
STYLE OF CAUSE: DAME FRANCES MAHER and JEAN MAHER
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: December 8 and 9, 1998
REASONS FOR ORDER AND ORDER BY: BLAIS J.
DATED: April 22, 1999
APPEARANCES:
André Blanchet for the plaintiffs
Stéphane Lilkoff for the defendant
SOLICITORS OF RECORD:
André Blanchet for the plaintiffs
Cap Rouge, Quebec
Morris Rosenberg for the defendant
Deputy Attorney General of Canada
__________________1 Section 9(1) of the Act respecting the expropriation of lands , R.S.C. 1952, c. 106.