Transmission Lines – Right of Way Agreements – Servitudes
This decision involved a dispute regarding the applicability of servitude agreements entered into during the 1970s for the routing of a transmission line. The Supreme Court of Canada found that a servitude agreement, if entered into after the notice of expropriation, contains a more faithful definition of the scope and terms for exercise of the servitude of public utility than does the notice of expropriation. Servitude agreements are subject to the rules applicable to the interpretation of contracts. If their words are clear, effect must be given to the clearly expressed intention of the parties.
On March 13, 2015, the Régie de l’énergie du Québec authorized Hydro-Québec to construct a proposed electrical transmission line between the Chamouchouane transformer substation in Saguenay-Lac-St-Jean and the Bout-de-l’Île transformer substation in Montréal. Hydro-Québec realized that it would be easier to run the line through a corridor where it already had servitudes that had been established in the 1970s for a transmission line between the Jacques-Cartier substation near Québec and the Duvernay substation in Laval. Hydro-Québec’s acquisition of those servitudes had involved two steps. Having been authorized by Order in Council (“OIC”) to acquire them by expropriation, it had first served and published notices of expropriation, after which it had signed, with the then owners, notarial agreements that described the servitudes being established and provided for various indemnities that would be payable, including for any work that might be carried out on the servient land.
Hydro-Québec claimed that these servitudes authorized it to route up to three electrical transmission lines through the servient land. The current owners of the lots contested this claim; they submitted that the rights arising from the servitudes acquired when the Jacques-Cartier–Duvernay line was constructed were limited to that one line only.
Findings in the Lower Courts
The trial judge ruled in Hydro-Québec’s favour. He found that the servitudes at issue had originally been acquired by expropriation, but that the subsequent agreements had clarified their purpose and scope. In his view, the agreements were clear: they authorized Hydro-Québec to erect three electrical transmission lines no matter what the origin or the destination of the electricity was.
The Court of Appeal allowed the owners’ appeal. In the Court of Appeal’s view, the servitudes at issue had been acquired by expropriation and should be characterized as servitudes established by operation of law. Their scope therefore had to be analyzed in light of the limits imposed by the Order in Council (“OIC”) that authorized them. The Court of Appeal accordingly concluded that Hydro-Québec could not rely on the servitudes in its favour for the construction of the new line and that it had to proceed by way of new expropriations or agreements.
Supreme Court Ruling
The Supreme Court allowed the appeal. It found that the power line servitudes in favour of Hydro-Québec were not limited to the Jacques-Cartier–Duvernay Line; they authorized Hydro-Québec to route a second electrical transmission line through the owners’ lots.
The Supreme Court noted that the trial judge was correct in characterizing the post-expropriation agreements as servitude agreements. The OIC, the notices of expropriation and the agreements are different types of documents, and it is important to distinguish them from one another. An OIC is an administrative act for the purpose of authorizing the exercise of the power to deprive a property owner of the enjoyment of the attributes of his or her right of ownership. Filing a notice of expropriation and the documents related to it is an administrative act that establishes and individualizes the servitude. As for the agreement, the Supreme Court noted that it relates to the ordinary exercise of civil rights and to the private law rules of contract. A servitude acquired by expropriation is, according to the classification set out in art. 1181 of the Civil Code of Québec, established by operation of law.
The Supreme Court held that neither the law nor public order bars the expropriating party and the expropriated party from clarifying or modifying such a servitude by mutual agreement: notices of expropriation thus do not preclude parties from negotiating conventional servitudes. It must be presumed that the servitude agreement, if entered into after the notice of expropriation, contains a more faithful definition of the scope and terms for exercise of the servitude of public utility than does the notice of expropriation. Servitude agreements are subject to the rules applicable to the interpretation of contracts. If their words are clear, effect must be given to the clearly expressed intention of the parties.
The Supreme Court further held that in the case at bar, the agreements at issue included a complete description of the servitudes, adding some details that did not appear in the notices of expropriation. In these circumstances, the agreements are the titles to which the owners of the servient land and the dominant land must refer in exercising their respective rights. Because the agreements are clear, the scope of the servitudes must be determined in light of their words. The agreements did not mention any restrictions regarding the origin or destination of the electricity. The servitudes were therefore not limited to the line between the Jacques-Cartier and Duvernay substations. The servitudes on the owners’ lots authorized Hydro-Québec to construct the Chamouchouane–Bout-de-l’Île line.
Furthermore, the servitudes concerned the lines crossing the servient land, not the substations located at either end of those lines. The Supreme Court found nothing in the words of the agreements that would explicitly or implicitly prevent Hydro-Québec from redirecting one of its lines toward another substation. The right to operate electrical transmission lines includes the right to make modifications such as the one that was made in the reconfiguration of the Jacques-Cartier–Duvernay line.