INTERNATIONAL RAILWAY CO Vs. NIAGARA PARKS COMMISSION

JUDGEMENT

(1.) On 29 August 1938 the International Railway Company (hereinafter called "the Appellant Company") instituted an action in the Supreme Court of Ontario against the Niagara Parks Commission (hereinafter called "the Commission") to recover $227,538.22 representing the unpaid balance of $251,322.08 claimed to be due in respect of interest at 5 per cent. per annum from 1 September 1932 to 3 June 1937 on a capital sum of $1,057,436.00. The action was heard by Kelly J. who dismissed it and ordered the appellant company to pay the costs. The appellant company appealed from this order to the Court of appeal for Ontario. The appeal was heard by Riddell, McTague and Gillanders JJ.A. who dismissed it with costs. On 19 December 1939, McTague J.A. admitted an appeal by the appellant company to His Majesty in Council. The trial Judge dismissed the action of the appellant company on two grounds: first that the appellant company was not entitled to any interest in respect of the capital sum and second that even if the company was entitled to interest the appellant company's only remedy was by petition of right against the Crown. The Court of appeal for Ontario affirmed the decision of the trial Judge on both grounds. The appellant company submitted before this Board that the decisions of the trial Judge and of the Court of appeal for Ontario were wrong on both points. The material facts are as follows: By an Act of the Legislature of Ontario intituled "an Act respecting the Niagara Falls Park" (Statutes of Ontario 50 vic.chap.13) three persons therein named who then constituted an unincorporated body known as the Board of Commissioners for Niagara Falls Park with two other persons to be appointed by the Lieutenant-Governor in Council were incorporated under the title "The Commissioners for the Queen Victoria Niagara Falls Park" for the purpose of establishing, maintaining, improving and developing certain lands selected by the Commissioners thereby constituted as a public park to be called "The Queen Victoria Niagara Falls Park." The lands referred to were approved by the Lieutenant-Governor and were by the Act last mentioned vested in the Commissioners as trustees for the Province. The Act conferred on the Commissioners the necessary powers enabling them to perform the duties thereby imposed on them, the majority of such powers being subject to the control of the Lieutenant-Governor in Council. These powers included one to raise a limited sum of money by the issue of debentures charged on the revenues of the Commissioners. It was expressly provided that the debentures so issued might be guaranteed by the Crown by order in Council.

(2.) On 4 December 1891 an agreement was entered into between the Commissioners for the Queen Victoria Niagara Falls Park who are therein expressed to be acting "on their own behalf as well as on behalf of and with the approval of the Government of the Province of Ontario" of the first part and three gentlemen who were the promoters of the railway, the subject-matter of the agreement, and are with the company thereafter to be incorporated therein called the company of the second part. The agreement (hereinafter referred to as the 1891 agreement) contained recitals to the effect that the company desired to construct and operate an electric railway along the top of the west bank of the Niagara River; that the company intended to apply for a charter of incorporation to enable it to construct and operate the said railway and other works therein specified, and to execute effectively the engagements entered into therein on the part of the company; that the company desired to secure the rights of way to construct the said railway through and in the Queen Victoria Niagara Falls Park the property of the Commissioners, and through and over other lands of the Commissioners, and also through and over lands held or contracted for by the Commissioners under contracts with and licenses from the owners thereof respectively. By the operative part of the 1891 agreement (cl.1) the Commissioners licensed the company to construct an electric railway in and through what is described as "the park proper," and on and over other lands of the Commissioners some of which are defined as "the chain reserve." The phrase "the park proper" is defined in the agreement to mean the Queen Victoria Niagara Falls Park. The agreement by cl. 2 requires that the company shall construct, equip and operate the railway and shall extend the same to Chippawa Creek which is not within the limits of the park proper as defined by the agreement with sufficient sidings and equipments to meet the development of traffic.

(3.) By cl. 15 the company undertook to build the railway in every respect fit for traffic not later than 1st September 1892. By cls. 16 to 19 inclusive, the company's right to operate the railway was to begin on 1st September 1892 and was to extend to a period of 40 years from that date at an annual rental of $10,000 with an option to the company to extend the right for a further period of 20 years at an increased rental if demanded by the Commissioners to be fixed by arbitration if the parties should be unable to agree. By cl.26 it is provided that if at the end of the said period of 40 years, the company was unwilling to renew, or at the end of the further period of 20 years, if the company continued to hold for such further period, the company should be duly compensated by the Commissioners for their railways, equipment, machinery and other works but not in respect of any franchises for holding or operating the same, such compensation to be fixed by mutual agreement, or in case of difference, by arbitration as stated in the agreement, but the failure before the expiration of any such term, to fix or pay the compensation was not to entitle the company to retain possession meanwhile of the said railways, equipment, machinery and works. Clause 29 was as follows: Subject always to the terms and provisions of this agreement, and to the rights of the Commissioners as the owners in fee simple of land over which the right of way in the park proper and on the chain reserve, the said railways and their equipment and the other works constructed or required under this agreement, shall upon such construction or acquisition, as the case may be, be vested in and shall be the property of the company who shall, subject as aforesaid, be entitled to operate, manage and control the same during the period or periods respectively above mentioned, it being, however, hereby declared, understood and agreed, that at the end of the said first or second periods, as the case may be, the whole of the company's said high level railway from Queenston to Chippawa, and the said low level railway, if then held by the company under this agreement, together with their equipment and the machinery and works aforesaid, including the elevators or lifts acquired or built and including also the works in Queenston and Chippawa shall become the property of the Commissioners, subject to the payment of compensation to be agreed upon or awarded as the case may be, and as is hereinbefore provided for.