Majority
The judgment of Abbott, Ritchie, Hall and Pigeon JJ. was delivered by
PIGEON J.
PIGEON J.—Respondent was incorporated in 1952 to acquire and hold a building in Montreal for the purposes of an unincorporated trade union, the International Ladies Garment Workers Union. A lot was purchased on Plateau Street in the City of Montreal, at the north-west corner of Jeanne-Mance Street. Construction began in 1953 and was completed in 1954. One of the three floors was intended for use entirely as a medical centre for union members, the rest for offices and other rooms. Early in 1954, the following provision was enacted by the Legislature as s. 20 of c. 66, entitled “An Act to amend the Charter of the City of Montreal”:
20. The city is authorized to enact by resolution of its council upon report of the executive committee, that the actual and future lands and buildings of the ILGWU Center Inc., on Plateau Street, north-west corner of Jeannne Mance, shall be exempt from the ordinary and annual real estate tax inasmuch as same
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are used, in whole, for administrative, medical, educational or cultural purposes, for the International Ladies Garment Workers Union.
On May 6, 1954, the City Council passed a resolution adopting the following report of the Executive Committee, dated April 1st:
[TRANSLATION] THE EXECUTIVE COMMITTEE
has the honour to recommend that from May 1, 1954, the actual and future lands and buildings of the ILGWU Centre Inc., be exempt from the ordinary and annual real estate tax inasmuch as same shall be used for administrative, medical, educational or cultural purposes, for the International Ladies Garment Workers Union.
The building on Plateau Street was completed and used for the purposes contemplated, and respondent accordingly benefited from the tax exemption granted it.
In 1961 expropriation of respondent’s property on Plateau Street was found to be necessary for the construction of Place des Arts, which had been undertaken by the Sir Georges-Étienne Cartier Center, a corporation created under 4-5 Eliz. II, c. 24 and authorized thereunder to exercise powers of expropriation in accordance with the provisions of the Charter of the City of Montreal. Accordingly, on August 9, 1961, a judgment was rendered by the Superior Court, ordering the Public Service Board to proceed to determine compensation. The proceedings were delayed by an opposition that was eventually withdrawn by respondent. On February 2, 1966, the Board’s report set compensation in the amount of $734,832.16. The last paragraph of this report reads as follows:
[TRANSLATION] Regarding the damage which the owner alleges resulted from the loss of an exemption from municipal taxes, the Board does not have jurisdiction to decide on this matter, but reserves to the owner all remedies he may have before the appropriate Court.
This report was homologated by a judgment of the Superior Court rendered in default of appearance on February 25, 1966.
It should be noted that, after expropriation proceedings were started, respondent did not
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fail to show concern for the consequences which might result from the fact that it was compelled to relocate at another site. Having acquired a lot and begun construction of a building at 405 Concord Street, it made numerous representations to the municipal authorities.
On September 19, 1962, counsel for the respondent informed the Mayor that the Controller of Exemptions contended that only the property on Plateau Street could benefit from the exemption granted in 1954. On October 3, he wrote a letter to the Director of Departments of the City, contending that the exemption followed the organization to its new site; in closing, however, he stated:
If, perchance, another view is taken of the foregoing, I am instructed respectfully to request that the City, in presenting its next amendments to the Legislature at Quebec, include among such amendments the following:
“That an Act to amend the Charter of the City of Montreal, being 2-3 Elizabeth II, ch. 66, Sec. 20, entitled “Exemption of Taxes Authorized” be amended by deleting therefrom the words “on Plateau street, north-west corner of Jeanne Mance”, in the said Section 20.”
The Director of Departments of the City replied on February 8, 1963, as follows:
The Executive Committee has been seized of your communication of October 3, 1962 and has asked me to inform you that it would have no objection to a request, to be made by the ILGWU Center to the Provincial Legislature, to insert the amendment suggested and quoted on the last page of your letter.
On April 24, 1963, the Legislature enacted the following provision as s. 60 of 11-12 Eliz. II, c. 70, entitled “An Act to amend the Charter of the City of Montreal”:
60. Section 20 of the act 2-3 Elizabeth II, chapter 66 is replaced by the following:
“20. The city is authorized to enact, by. resolution of its council upon report of the executive committee, that the actual and future lands and buildings of the ILGWU Center Inc., on Concord Street, shall be exempt from the ordinary and annual real estate tax so long as they are used entirely for administrative, medical, educational or
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cultural purposes, for the International Ladies Garment Workers Union.”
On June 27, 1963, replying to a letter from counsel for the respondent again claiming the exemption, the Director of Departments of the City informed him that he would submit the request to the municipal authorities as soon as the new building would be completed. Ultimately, however, on April 27, 1964, he informed him that the Executive Committee did not intend to recommend that the Council grant an exemption from taxes for the property on Concord Street. It is under those circumstances that respondent requested from the Board special compensation for Toss of the exemption. There is in the record a letter dated January 25, 1965, in which counsel for the City undertakes that a City official will have the file available at the hearing before the Public Service Board.
The present proceedings were instituted by declaratory action on July 22, 1966. In this action the City of Montreal is summoned as defendant, and the Public Service Board and the Régie de la Place des Arts as “mises-en-cause”. It is to be noted that, under the Place des Arts Act (12-13, Eliz. II, c.19), the latter succeeded to the Sir Georges-Étienne Cartier Center. The conclusions of the action are primarily, that the exemption from taxes granted to respondent in 1954 be declared applicable to the property on Concord Street; subsidiarily it prays that the expropriation record be returned to the Public Service Board so that the latter may assess compensation for the loss of the exemption, or alternatively, that an amount of $175,000 be awarded for such loss.
The Superior Court granted the primary conclusion and this judgment was affirmed by the Court of Appeal. The reasons for the judgment in first instance were essentially that the resolution of 1954 granting respondent an exemption from taxes was valid to the full extent of the power conferred on the City:
[TRANSLATION] In short, the Court is of opinion that when the Legislature, acquiescing in the request of
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plaintiff and defendant, amended the Statutes of Quebec, 2-3 Elizabeth II, chapter 66, section 20, by 11-12 Elizabeth II, chapter 70, section 60, it did not intend to cancel the resolution passed on May 6, 1954. On the contrary, it appears that the purpose of this new statute was to ratify the resolution and to remove any doubt as to its validity.
On appeal the Court said:
[TRANSLATION] The power granted by the Legislature to the defendant never ceased to exist. It was conferred on February 18, 1954 (2-3 Eliz. II, c. 66), and confirmed and upheld by the new section 20 on April 24, 1963 (11-12 Eliz. II, c. 70, s. 60 and R.S.Q. c. 1, s. 8). Defendant’s resolution, adopted on May 6, 1954, has always been, and is still, in effect.
It appears convenient to consider at first the situation prior to the adoption of the 1963 statute. Could the respondent have claimed to be exempt from taxes for the property on Concord Street under the statute and resolution of 1954? I think not. As a rule a municipal corporation cannot grant tax exemptions: it may only exercise its taxation power over all property subject to tax without distinction, except where a statute exceptionally permits it to act otherwise. In this case the 1954 statute authorized such action only for “the actual and future lands and buildings of the ILGWU Center Inc., on Plateau Street, north-west corner of Jeanne-Mance”. It is true that this description involves some uncertainty on account of the words “actual and future”, but it is not necessary to consider how far this might have been taken, since clearly it could not be taken very far without exceeding the terms of the authorization.
It must further be noted that the repetition of the article “les” before “bâtiments” (buildings) makes the adjectives “actuels et futurs” (actual and future) referable to this word only, not to the word “terrains” (lands). This distinction is readily understandable, since the construction was not completed when the statute was passed. It is true that in the English version the words “actual and future” are placed before “lands and buildings”, and so unquestionably refer to both words; but as this is a special act derogat-
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ing from the principle of uniform taxation, I am inclined to believe that the version with the more restrictive meaning must be followed. However, it does not seem necessary to reach a firm conclusion on this point, because in both versions the wording clearly limits the allowable exemption to lands and buildings “on Plateau Street, north-west corner of Jeanne-Mance”.
Respondent’s contention that this is merely an address, not a description of the property concerned, is quite simply contrary to the text. The Legislature could certainly have conferred the power to grant respondent an exemption for its actual and future properties in any part of the city, but it has not done so.
What is now to be said about the fact that the 1954 resolution contains no limitation? This obviously could not extend the scope of the legislative provision; consequently the resolution could only be valid if it impliedly contained the limitation laid down by the statute. As the Legislature did not authorize the exemption of all properties in the city owned for the designated purposes by the respondent, but only of those on Plateau Street, at the north-west corner of Jeanne-Mance, the municipal council certainly could not grant an exemption which the Act did not authorize.
Moreover, in the resolution as in the statute, it appears clear that the words “actuels et futurs” (actual and future) qualify only the word “bâtiments” (buildings); hence if the resolution is strictly interpreted, as it should be, it would have to be said that the exemption was only for the land which respondent had at that time, and the actual and future buildings thereon.
It must therefore be held that, after the expropriation took place in 1961, the 1954 resolution lapsed. Respondent no longer owned the buildings for which an exemption had been granted by appellant, and its new buildings were not located at the only place where an exemption was authorized. This much both parties fully appreciated.
We now come to the 1963 statute. Can s. 60 be regarded as granting an exemption to
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respondent? This seems impossible to me because it is contrary to the basic nature of the provision. It authorizes the municipal council to grant an exemption; it is not a ratification or validation such as in other sections, e.g. 54, 55 and 56. It is undoubtedly true that the City Council ha never repealed the 1954 resolution, which apparently remains in force, but this cannot be looked upon as a decision to implement the authorization to grant an exemption for the Concord Street property. In fact, it clearly is a decision to implement the 1954 authorization.
Respondent however relies on the fact that the 1963 statute enacts that the 1954 section “is replaced” by the new one. From this it would have us infer that the new section must be given the same effect as if it had been originally enacted in this form. This is an ingenious argument but it is not supported by the enactment which replaces the former section now, and is definitely not retroactive.
Of all the cases to which we have been referred on the meaning of the word “replaced”, the only one which appears to be of interest is: Re Green, Re Jamael[2]. The Nova Scotia Legislature had replaced a provision directed against whoever unlawfully kept, had, gave or consumed liquor, by two separate provisions: the first directed against the fact of keeping or having, the second that of giving or consuming. The change was made by enacting that the prior statute was repealed and the new provision substituted therefor. The Court of Appeal refused to accept that there had really been a repeal of the prior statute, and it held accordingly that a person convicted of having had liquor in his possession in breach of the earlier provision could be found guilty of a second offence when convicted for so doing under the new wording. In coming to this conclusion they particularly relied on a decision given in the Province of Ontario in Licence Commissioners v. The
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County of Frontenac[3], where it was held that a provincial statute dealing with expenses incurred for the enforcement of a federal statute did not cease to be effective because the latter was repealed and replaced by the Revised Statutes of Canada.
It is clear in the present case that the amendment made by the 1963 Act is not in the nature of a consolidation. by a substantially identical provision, but by one incorporating an important difference. We are therefore dealing with a change of substance, not a reproduction in identical, or substantially identical, terms. It appears from the judgment of the Nova Scotia Court of Appeal that the basis of the decision was precisely that the new wording was substantially identical with the former. This was all the more so in the case of the replacement of an earlier statute by the “Revised Statutes”. Here, the situation is quite different. There is a significant change: the Legislature has really conferred a new authorization. The authority on which the power to grant a new exemption has thus been conferred has chosen not to exercise it and nothing required it to do so. We were referred to various sections of the Interpretation Act; none of them is relevant to such a case.
For the above reasons, therefore, it must be found hat respondent’s primary conclusion cannot be maintained. The subsidiary conclusions therefore remain to be considered.
The exemption from taxes enjoyed by respondent for an indefinite period lapsed as a result of the expropriation of the property for which it was granted. According to the evidence the municipal administration of Montreal has never withdrawn an exemption so granted; thus it was an important advantage of which respondent was definitively deprived as a
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consequence of the expropriation. No reason was advance at the hearing why this very real loss should not form the basis of some compensation.
According to s. 996 of the Charter of the City of Montreal, “the expropriation indemnity shall include the actual value of the immoveable, part of an immoveable or servitude expropriated and the damages resulting from the expropriation; …” Moreover, this right to damages in addition to the actual value is the general rule in cases of expropriation: Art. 780 (formerly 1066 l) of the Code of Civil Procedure). In Irving Oil Company Limited v. The King[4], this Court considered the extent of the provision in the federal Expropriation Act, which likewise admits the expropriated party’s right to damages. It was held that this includes the right of the expropriated party to recover all losses and expenses arising out of the expropriation, in addition to the value of the land. The breakdown of the sum allowed is given in the reasons of Rand J., and it includes moving expenses, damages through disturbance of business, and, finally, taxes prepaid for the unexpired portion of the year. At p. 560 one reads:
The use of the word “damages” and the further language “and all other things done in pursuance of this Act”, indicate the comprehensive sense in which the word is used and that it is intended to cover not merely the value of land itself, but the whole of the economic injury done which is related to the land taken as consequence to cause.
Kerwin J. stated the principle to be applied as follows (at p. 556):
It was argued in the Exchequer Court of Canada, before the late President MacLean, in Federal District Commission v. Dagenais (1935, Ex. C.R. 25), that no compensation could be allowed for certain items there claimed because they did not represent an estate or interest in the lands taken. While saying nothing as to the correctness of the list of things for which compensation has been allowed and enumerated by the late President, I agree with him that the principle in this class of case is that the displaced
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owner should be left as nearly as possible in the same position financially as he was prior to the taking, provided that the damage, loss or expense for which compensation was claimed was directly attributable to the taking of the lands.
This statement is strikingly similar to the rule laid down by Picard in his Traité Général de l’Expropriation (Vol. I, p. 111):
[TRANSLATION] So far as possible, the expropriated party must be enabled to obtain from the compensation rights and advantages identical with those of which he is deprived by expropriation.
If an expropriated party is to be regarded as deprived of the benefit of municipal taxes prepaid for the remainder of the year in which expropriation takes place, why should it be otherwise for the benefit of the tax exemption granted for an indefinite time with respect to the expropriated immoveable?
Compensation for expropriation is not limited to the intrinsic value of the immoveable taken. If the property has a special value to the expropriated party, over and above the market price, he is entitled to this special value together with the damages he suffers. For this reason the rule to be used as a guide in assessing compensation was formulated as follows by Rand J. in Diggon-Hibben Limited v. The King[5]:
… the owner at the moment of expropriation is to be deemed as without title, but all else remaining the same, and the question is what would he, as a prudent man, at that moment, pay for the property rather than be ejected from it.
It seems obvious that if respondent had been called upon to compute the price it would have been prepared to pay rather than give up its property, it would never have failed to include the value of the tax exemption which it would lose by leaving it. If the power of expropriation for the construction of Place des Arts had not existed, respondent would certainly never have agreed to transfer its immoveable without com-
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pensation for the loss of the exemption. As Rand J. says in the judgment just cited (p. 715):
A compensation statute should not be approached with the attitude that Parliament intended an individual to be victimized in loss because of the accident that his land rather than his neighbour’s should be required for public purposes;
No reason was shown for not regarding the loss in question as “resulting” from the expropriation. On the evidence, this is the only fact to which it can be attributed: no other possible cause was suggested. It certainly cannot be ascribed to the decision not to grant for the new property the exemption authorized by the 1963 statute: this would be to look to a subsequent fact for the cause of a loss which was suffered at the time of the expropriation in 1961. At that time the City’s charter made this loss definitive; it did not authorize the granting of an exemption for a property other than the expropriated land. The damage might have been reduced or avoided for the future if the City had used the power to grant a new exemption. Its decision not to do so did not cause the loss, it left it unabated. The causal relationship has accordingly, in my view, been established.
It is perhaps worth noting that there are, in the reported decisions of United States courts, two judgments which have recognized the right of an expropriated party to be compensated for the loss of a municipal tax exemption: Old South Association in Boston v. City of Boston[6], United States v. 205.03 Acres of Land[7].
Upon mailing to the Registrar, in order to complete the record as requested by the Court, a copy of the judgment homologating the report of the Public Service Board, appellant raised the contention that all other remedies were foreclosed. In my opinion the meaning of the report of the Public Service Board, like that of the 1963 statute, is to be gathered from the text as a whole, rather than from any particular expression. Clearly the Board in no way intended to adjudicate on the right to an exemption from
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taxes, or on the compensation that might be due if such exemption was lost.
We are thus dealing with a case where the Board has not assessed compensation for a portion of the damage occasioned by expropriation. To admit appellant’s objection would be to put respondent in the same position as if the Board had ruled against its right to such compensation, when it has not done so. In my opinion the Board is to be treated as having failed to exercise its jurisdiction to determine the compensation due to respondent for the loss of the exemption. In these circumstances, the homologation of its decision does not have the effect of depriving respondent of the right to demand, by appropriate proceedings, that the Board be ordered to exercise its jurisdiction where it has failed to do so.
All parties were made “mises-en-cause”, the Public Service Board as well as the expropriating authority, the Régie de la Place des Arts. I am therefore of the opinion that the subsidiary conclusion, that the case be referred to the Public Service Board for the assessment of the compensation for the loss of the tax exemption, should be granted.
For these reasons, I would allow the appeal, set aside the decision of the Court of Appeal and amend the judgment of the Superior Court by replacing the operative part by the following:
ORDERS that the record on expropriation of the properties of the ILGWU Center Inc., on Plateau Street, north-west corner of Jeanne-Mance, be referred to the Public Service Board so that the latter may assess the compensation payable for the loss of the tax exemption granted by the resolution of May 6, 1954.
Since appellant has met with limited success only, it seems appropriate not to award costs.
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Appeal allowed and judgment of the Superior Court amended to grant the alternative claim without cost, Fauteux C.J. dissenting in part.
Solicitors for the defendant, appellant: Côté, Peloquin, Mercier, Normandin, Ducharme & Bouchard, Montreal.
Solicitors for the plaintiff, respondent: Spector & Schecter, Montreal.
Solicitors for the mises-en-cause: Lacroix, Viau, Bélanger, Pagé, Hébert & Mailloux, Montreal.
Footnotes
- [1] [1970] Que. A.C. 344.
- [2] 10 M.P.R. 335, (1936), 2 D.L.R. 15.
- [3] 14 O.R. 741.
- [4] [1946] S.C.R. 551.
- [5] [1949] S.C.R. 712 at p. 715.
- [6] 99 N.E. 235.
- [7] 251 Fed. Supp. 858.