Bourgoin v La Compagnie du Chemin de Fer de Montréal, Ottawa & Occidental, and Ross is a Canadian constitutional law case decided by the Judicial Committee of the Privy Council, at that time the highest court of appeal for the British Empire. Although the case initially dealt with the power of arbitrators under the federal Railway Act, the underlying constitutional issue was the relationship between federal and provincial regulation of a railway in Quebec. The Judicial Committee ruled that the province could not unilaterally take over ownership and regulation of a federally regulated railway.
The case was on appeal from the courts of Quebec, and was a consolidation of four different legal cases arising out of a single commercial dispute, an expropriation of a quarry by the railway company. At issue was the amount of compensation which the railway company owed to the operators of the quarry, and whether the quarry operators could enforce the monetary award against the property of the railway company. The final result was mixed, with part of the ruling in favour of the railway company and part in favour of the quarry operators.
The case continues to be cited in relation to the interplay between federal and provincial railway regulation.
Factual background
The plaintiffs had a long-term lease of a quarry, allowing them to use and operate it. The defendant was a railway company running along the north shore of the St. Lawrence river, linking Quebec City, Montreal and Ottawa. In 1875, the railway company began proceedings to expropriate the quarry under the federal Railway Act. The parties could not agree on the terms of compensation and the matter went to arbitration under the Railway Act. The arbitrators ruled that the railway company had to pay $35,013 to the quarry operators, with an additional $100 per month until the railway company had made certain defined drainage improvements to the land to protect the neighbouring land of the quarry operators. That award was at the heart of the court actions.
A key issue in the court actions was the application of federal and provincial railway laws. The railway company had originally been incorporated and operated under provincial law, but when it expanded into an inter-provincial railway linking the provinces of Quebec and Ontario, it had been transferred to federal jurisdiction. However, the railway company later ran into financial difficulties, and in 1875, by notarial deed, the railway company ceded the physical railway line, the fixtures and the rolling stock to the province. In 1876, the provincial legislature passed legislation to take over the railway company as a provincial project, merge it with another railway in Quebec, and make it subject to Quebec railway law.
Decisions of Quebec courts
There were four separate decisions of the Quebec courts, but they raised two general issues. The first question was whether the arbitration award was valid. The railway company challenged it on the basis that the arbitrators appointed under the federal Railway Act did not have the authority to impose the condition that the railway company make improvements to the quarry and pay monthly awards until it had done so. In July, 1876, the Superior Court dismissed that action, but in December, 1878, the Quebec Court of Queen's Bench (Appeal Side) allowed the appeal and set aside the award.
The second issue related to the enforcement of the award. After the Superior Court dismissed the railway company's application, but before the Queen's Bench had ruled, the quarrymen sought to enforce the arbitrator's monetary award by applying to the sheriff of Montreal to seize the property of the railway company. However, the government of Quebec, represented by David Alexander Ross, the Attorney General of Quebec, opposed that enforcement attempt, on the basis that the railway was now the property of the government of Quebec and immune from ordinary civil seizure rules. In May, 1878, the Superior Court agreed with the Attorney General's position and held the railway property was immune from seizure. The Queen's Bench subsequently affirmed that decision.