Quebec North Shore Turnpike Road Trustees v. The King

Quebec North Shore Turnpike Road Trustees v. The King

Because the debentures were issued under statutory authority and the prohibitions in later statutes were limited to advances out of the provincial/consolidated revenue, the Crown's purchase of the debentures with Common School Fund money was not unlawful and knowledge of any alleged misuse or breach of trust by the trustees could not be set up as a defence to the Crown's claim; Crown entitled to enforce the debentures.

Citation
(1906) 38 SCR 62
Parties
Defendant Appellant: Quebec North Shore Turnpike Road Trustees; Added Appellants: Ulric Tessier and Others; Plaintiff Respondent: His Majesty The King
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
22 November 1906
Procedural Posture
Civil Appeal (crown Action) / Appeal to Supreme Court of Canada From Exchequer Court of Canada; Final Judgment on Appeal
Outcome
Appeal dismissed with costs
Legal Topics
Breach of Trust, Investment of Trust Funds, Crown Estoppel/immunity, Statutory Prohibition on Payment From Public Funds, Validity and Enforcement of Debentures, Joinder/adding Parties
Source Language
English
Trusts Public Law Administrative Law Civil Procedure Breach of Trust Investment of Trust Funds Crown Estoppel/immunity Statutory Prohibition on Payment From Public Funds +2 more

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Parties

Quebec North Shore Turnpike Road Trustees

Defendant Appellant

Ulric Tessier and Others

Added Appellants

His Majesty The King

Plaintiff Respondent

Procedural Posture

Civil Appeal (crown Action) / Appeal to Supreme Court of Canada From Exchequer Court of Canada; Final Judgment on Appeal

Legal Issues

  1. 1 Whether the Crown can be estopped from recovering on debentures purchased with trust funds when Crown advisers had knowledge of an alleged breach of trust or intended misapplication of proceeds
  2. 2 Whether the purchase by the Crown of debentures using Common School Fund moneys violated statutes prohibiting advances from provincial/public funds to pay interest
  3. 3 Whether knowledge of a breach of trust by Crown advisers or alleged participation in evasion of statute defeats the Crown's title to enforce payment on the debentures

Ratio Decidendi

Because the debentures were issued under statutory authority and the prohibitions in later statutes were limited to advances out of the provincial/consolidated revenue, the Crown's purchase of the debentures with Common School Fund money was not unlawful and knowledge of any alleged misuse or breach of trust by the trustees could not be set up as a defence to the Crown's claim; Crown entitled to enforce the debentures.

Court Disposition

Appeal dismissed with costs

Orders

  • His Majesty the King is entitled, in any future payment or distribution of interest on the debentures mentioned, to share pari passu with other holders of like class.
  • With respect to the Montmorency Bridge debentures held by His Majesty the King, His Majesty is entitled to payment of arrears of interest for which defendants have made provision unless such provision was from funds not applicable to such interest and tolls/revenues were insufficient on proper accounting.