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1931 Supreme(SC) 18
Privy Council At Canada
Killowen, Russell , Thankerton , Atkin, Lords Blanesburgh, Justice Viscount Dunedin, JJ.
Canadian Pacific Railway Company -Appellant
Versus
The King -Resopndent
Privy Council Appeal No. 87 of 1930
Decided On : 19-02-1931
I.C. Rand, N.W. Rowell, C.F.H. Carson, G. Lawrence , W.N. Tilley
Long-term acquiescence and rent claims can convert trespass into a revocable license. For public utility infrastructure, such licenses require reasonable notice for revocation to allow for alternative arrangements; the mere institution of legal proceedings does not constitute summary revocation.
Headnote:(A) Property Law - License and Trespass - Conversion of trespass to license - Long-term acquiescence and claims for rent by the landowner can convert an original trespass into an occupation by leave and license.
(B) Equitable Estoppel - To establish an irrevocable right of occupation, it must be shown that the owner's conduct induced a mistaken belief in the occupant's rights, or that a contract for perpetuity was implied; mere toleration of a trespass does not create an irrevocable license.
(C) Revocation of License - A licensee is generally entitled to reasonable notice of revocation. Where the license involves infrastructure of public importance, reasonable notice must provide sufficient time for the licensee to make alternative arrangements; the mere institution of legal proceedings does not automatically determine such a license.
Facts of the case:
A company installed telegraph poles and wires on government-owned railway land. One section was originally installed without permission, while other sections were installed with permission pending the execution of formal agreements. The government later sought the removal of the poles and wires, claiming the company was a trespasser. The company contended that its occupation was under an irrevocable license, relying on the government's long-term acquiescence and the public importance of the telegraph system.
Findings of Court:
The court found that while the first section began as a trespass, the government's knowledge, acquiescence, and subsequent claims for rent converted the status to a license before the suit was filed. The other sections were licenses from the outset. The court held that these licenses were revocable as there was no contract for perpetuity and no evidence of equitable estoppel. However, the licenses had not been effectively revoked prior to the action, nor were they revoked by the filing of the suit.
Issues: Whether the occupation of the land constituted a trespass or a license; whether the license was irrevocable based on equitable estoppel; and whether the license was revoked by the government's correspondence or by the institution of legal proceedings.
Ratio Decidendi: The court reasoned that long-term toleration and requests for payment for the use of land indicate a license rather than a continuing trespass. For a license to be irrevocable, there must be a contractual basis or a situation where the owner's conduct induces a mistaken belief in the occupant's permanent rights. Furthermore, where the exercise of a license involves public utility infrastructure, the licensee is entitled to "breathing space"—reasonable notice sufficient to allow for the removal of equipment and the making of alternative arrangements. Summary revocation via the initiation of legal proceedings is insufficient in such cases.
Result: Appeal succeeds in part; the appellant is held to be in occupation as a licensee whose license is revocable but unrevoked.
Legal Category Hierarchy
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tort
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trespass
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license
- revocable license
- irrevocable license
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license
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trespass
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equity
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estoppel
- equitable estoppel
-
estoppel
Lord Russell of Killowen.-
This appeal was brought against a judgment of the Supreme Court of Canada, which in part, dismissed the appellant's appeal, and in part allowed the respondent's appeal, from a judgment of the Exchequer Court of Canada in proceedings, in which the Crown, on the information of the Attorney-General of Canada, was plaintiff, and the Canadian Pacific Railway Company (the appellant here) was defendant. The object of the proceedings was to obtain the removal from the roadway and lands of the Intercolonial Railway, of the appellant's line of telegraph poles and wires. The Intercolonial Railway forms part of the Canadian Government Railways system, and its roadway lies in the provinces of New Brunswick and Nova Scotia.
The appellant's telegraph line was, at the date of the filing of the information (15th September 1926), substantially all erected upon and carried along the Intercolonial Railway's roadway. The telegraph line forms part of a telegraph system worked by the appellant, and is of undoubted importance both to itself and to the public, inasmuch as it connects with the cable station at Canso, as well as with Halifax and other important points in the Maritime Provinces. For the purpose of determining the rights of the parties the Supreme Court, in considering the case, divided the appellant's telegraph line into three sections. This appears to their Lordships to be a convenient course, and they propose to adopt it in this judgment. The three sections are as follows:
(a) The "Main Telegraph Line," viz., from Coldbrook near St. John through Moncton and Truro to Fairview Junction near Halifax, and from Truro to New Glasgow. This was constructed in the years 1888, 1889 and 1890.
(b) The "Branch Telegraph Line," viz., from New Glasgow to Sydney. This was constructed in 1893.
(c) The "Westville Telegraph Line," viz., from Westville to Picton. This was constructed in 1911.
It will be necessary to consider the circumstances in which each of these sections was constructed, where the poles were placed, and how it came about that eventually substantially the whole system came to be situated on the lands of the Intercolonial Railway. But before doing so it will be advisable to state exactly what were the claims which were put forward by the Crown, and how each Court has dealt with those claims.
According to the information as it was filed and as it stood at the opening of the trial, the Crown's case was that the appellant was from the very start a trespasser in respect of its entire line. No other case was suggested. The allegation ran thus:
"(2) On or before or since the first day of January 1890, the defendant in or upon the possession of the plaintiff of and in the premises, wrongfully and in violation of the plaintiff's rights, entered and intruded and constructed thereon, a line of poles and wires which the said defendant has ever since operated as part of a telegraph system."
The relief claimed was possession and mesne profits. At the trial leave to amend was asked for and granted, with the result that damages for trespass were claimed as an alternative to the claim for mesne profits, and, as alternative relief, a declaration was sought in the following terms:
"(b)-(1) In the alternative a declaration as to the rights, if any, of the defendant in the said lands in respect of the said line of poles and wires."
The appellant had pleaded licence either irrevocable or, if revocable, unrevoked, and this no doubt was the reason why it was thought prudent by the Crown's advisers, to include a claim for a declaration as to the defendant's rights in the Crown lands, notwithstanding that such a claim would appear to be inconsistent with any claims founded upon trespass. It is however true to say that the Crown's primary contention throughout has been, that the appellant was and is a trespasser, and nothing else.
The action was tried by Audette, J., and after a hearing which lasted for nine days, the learned Judge delivered his ju
