BY-LAWS TO CREATE DEBTS, &c.

By-laws for

debts.

222.-Every such Council (u) may, under the formalities required by law, (v) pass By-laws for contracting debts by crating borrowing money or otherwise, (w) and for levying rates for payment of such debts on the ratable property of the Munici pality, for any purpose within the jurisdiction of the Coun cil, (x) but no such By-law shall be valid which is not in accordance with the following restrictions and provisions: (y)

sors.

predecessors have had the benefit. (See The King v. Chappel-warden of
Haworth, 12 East, 556; Cortis v. Kent Water-works Company, 7 B. & C.
314; Rex v. Justices of Flintshire, 5 B. & Ald. 761; Woods v. Reed, 2
M. & W. 777; Jones v. Johnson, 5 Ex. 862; S. C. in Error, 7 Ex. 452.)
One object of the law, as rate-payers fluctuate, is to protect present
inhabitants from being burthened with the expenses of their predeces-
(The King v. Wavell et al., Doug. 116; The King v. Goodcheap,
6 T. R. 159; Attorney-General v. Wigan, 18 Jurist, 299.) As a rule,
money required for municipal purposes ought to be raised as the law
directs-beforehand, instead of being in any manner or by any person
advanced, in the expectation of reimbursement by the municipality.
(See The King v. Chappel-warden of Bradford, 12 East, 556; Towney's
Case, 2 Rayd. 1009; Dawson v. Wilkinson, Cases Temp. Hard. 381.) It
is for reasons such as these that the power to assess under this section
is restricted to debts falling due "within the year." The result
appears to be, that no Municipal Council should incur a debt without
at the same time providing for its payment. How far a municipality is
liable to an action, even within the year, for a debt contracted within
the year without the imposition of a rate to meet it, is a question.
The question is, how far a debt contracted for any purpose, without a
rate or public vote, is a valid debt. The policy of the law appears to
be, that all debts should be met by a rate in anticipation, or that
otherwise the amount should be raised by rate within the current year.
By the observance of this policy, abuses may be prevented; but by
the neglect of it, abuses will assuredly arise. If there were no such
policy to be observed, Council after Council might allow arrears of
debts to accumulate year after year, so as to bind future Councils and
to burthen future rate-payers. If this were permitted, there would
be no check upon the extravagance of municipal councillors,-the end
of which would be, in all probability, the bankruptcy of the munici-
pality. Of course where a by-law is, before its passing, submitted,
pursuant to sec. 223, to the electors for their assent, there is a check.
Where such check exists, the operation of the by-law need not be
restricted to the payment of debts "falling due within the year."
(u) i. e. The Council of every Township, County, City, Town, and
Incorporated Village, and of every Provisional Corporation. (Sec.
221.)

(v) i. e. Subject to and in observance of the formalities required by law.

(w) Or otherwise-that is, "otherwise contracting a debt." (x) See note u to sec. 221.

(y) Shall be valid, &c., i. e. may be set aside, if moved against within the proper time and in the proper manner.

1

Terms of

When to

take effect.

When debt to be redeemed.

If for gas

works, &c.

yearly rate.

1. The By-law, if not for creating a debt for the purchase of Public Works, shall name a day in the financial year in which the same is passed, when the By-law shall take effect; ()

2. If not contracted for gas or water works, or for the purchase of public works, according to the statutes relating thereto, the whole of the debt and the obligations to be issued therefor shall be made payable in twenty years at furthest from the day on which such By-law takes effect; and if the debt is contracted for gas or water works, the same shall in like manner be paid in thirty years at furthest, from the day on which the By-law takes effect; (a)

To provide a 3. The By-law shall settle an equal special rate per annum, in addition to all other rates, to be levied in each year, for paying the debt and interest; (b)

Sufficient in amount.

Irrespective of future

increase of ratable pro

perty.

4. Such special rate shall be sufficient, according to the amount of ratable property appearing by the last revised Assessment-Rolls, to discharge the debt and interest when repectively payable; (c)

5. The amount of ratable property shall be ascertained irrespective of any future increase of the ratable property of the Municipality, and of any income in the nature of tolls,

(2) As to By-laws for the purchase of public works, see sec. 225 et seq.

(a) The power to contract a debt payable at a future period, and to secure its payment at that period by the rate-payers then living, is founded on the principle that the object for which the debt is contracted is one which will benefit future rate-payers as well as those living at the time the debt is contracted. This is quite consistent with the policy of municipal law, as explained in note u to sec. 221.

(b) The By-law is to "settle" the rate and not leave it to a municipal officer to be computed (see The Canada Company v. the Municipal Council of the County of Middlesex, 10 U. C. Q. B. 93); and when so settled it is to be "an equal special rate per annum," that is, the rate is to be equal in each succeeding year-not fluctuating according to the arbitrary discretion of the Municipality. (In re Sells and the Municipality of the Village of St. Thomas, 3 U. C. C. P. 286.)

(c) It does not appear to be necessary that the By-law should set forth the estimates on which it is founded. (Fletcher v. the Municipality of Euphrasia, 13 U. C. Q. B. 129.) The Court will intend that proper estimates have been made, in the absence of evidence that they are wanting. (Ib.) If the rate is demonstrated to be insufficient, the by-law may be quashed. (Perry v. the Town Council of the Town of Whitby, 13 U. C. Q. B. 564.) It has been held that Municipal Councils cannot by By-law borrow money at a rate of interest exceeding six per cent. (Wilson and the Municipal Council of the County of Elgin, 13 U.C. Q.B. 218.) The late Act does not appear to make any alteration of the law in this respect. (See note y to sec. 213.)

interest or dividends, from the work, or from any stock, shares or interest in the work, upon which the money to be so raised or any part thereof is intended to be invested, and also irrespective of any income from the temporary investment of the sinking fund or of any part thereof; (d)

amount and

object of

rate for the

6. The By-law shall recite: (1.) The amount of the debt Recitals in: which such new By-law is intended to create, and, in some brief and general terms, the object for which it is to be debt; the yearly created; (2.) The total amount required by this Act to be raised annually by special rate for paying the new debt and debt; interest; (3.) The amount of the whole ratable property of The value of the Municipality according to the last revised AssessmentRolls; and, (4) The annual special rate in the pound for paying the interest and creating an equal yearly sinking fund for paying the principal of the new debt, according to this Act. (e)

(d) It does not appear to be necessary that the By-law should state the rate to be calculated at so much in the pound on the actual value of the ratable property of the Municipality. (Tylee v. the Municipality of Waterloo, 9 U. C. Q. B. 572.) In the absence of any thing to the contrary, the Court will intend that the Council has acted according to law. (Ib.)

(e) The by-law should describe the debts and their amounts. (See The Canada Company v. the Municipal Council of the County of Middlesex, 10 U. C. Q. B. 93.) These may be shown in the recitals of the By-law. Where a by-law recited that the amount of the whole ratable property of the Township, according to the last assessment returns, was £114,756; and that it would require the annual rate of 24d. in the pound, as a special rate for payment, &c.; and then enacted that a special rate of 24d. should be levied to pay the principal and interest of the loan to be raised under the By-law, and that the proceeds of such special rate should be applied solely to the payment, &c., until the same be fully paid and satisfied. Held that the recital as to the amount of ratable property and the assessment returns sufficiently appeared, and that it sufficiently appeared that the amount was to be raised in each year. (In re Cameron and the Municipality of East Nissouri, 13 U. C. Q. B. 190.) In one part of the By-law, the Reeve was empowered to issue debentures for such sums as should be from time to time required for the purposes mentioned, but not to exceed in the whole £10,000. In subsequent clauses a special rate was imposed to pay "the said sum of £10,000," and the application of the said sum of £10,000" was pointed out. The debentures were directed to be made payable “within 20 years of the time that this by-law shall come into operation." Held that the amount of the loan and the time when the debentures were to be made payable was stated with sufficient certainty. (Ib.) Where a by-law provided that the site of an old town hall should be disposed of, and any money above the proceeds of the hall required for the erection of a new one should be levied on the ratable property in the Municipality, but did not fix the amount or the rate to be levied, this part of the by-law was held

66

the ratable

property;

The yearly ing fund and

rate for sink

interest.

To be assent

rate-payers.

Exception as to Counties

223.-Every by-law for raising upon the credit of the ed to by the Municipality any money not required for its ordinary expenditure, and not payable within the same municipal year, shall, before the final passing thereof, receive the assent of the electors of the Municipality, in the manner provided for in the 192nd section of this Act. Except that in Counties (other than Cities) the Council of such County or Counties may raise by By-law or By-laws, without submitting the same for the assent of the Electors of such County or Counties, for contracting debts or loans, any sum or sums, over and above the sums required for its ordinary expenditure, not exceeding in any one year twenty thousand dollars. (ƒ)

other than Cities.

Course of

224.-Provided that no such By-law of a County Council proceeding for contracting any such debt or loan for an amount, over and by County Councils. above the sums required for its ordinary expenditure, not exceeding in any one year twenty thousand dollars, shall be valid, (g) unless the same is passed at a meeting of the Council especially called for the purpose of considering the same, and held not less than three calendar months after a copy of such By-law at length as the same is ultimately passed, (h) together with a notice of the day appointed for considering the same, has been published in some newspaper issued weekly or oftener

bad. (In re Hawke and the Municipality of Wellesley, 13 U.C. Q.B. 636.) Not only the rate must be mentioned in the By-law, but the amount to be raised thereby (see Tylee v. the Municipality of Waterloo, 9 U.C. Q. B. 572); and also the purpose or object for which it is required. (Ib.) Thus" to pay off two debentures held by William Allan, for erecting the court-house in said district" (Ib. p. 588), or "for the purpose of liquidating the sum of £1500 due to the Gore Bank, and the sum of £500 due by the District to Alexander Drysdale, Esquire." (Ib.)

(f) The rule is that every by-law for raising money shall, before the final passing thereof, receive the assent of the electors. The exceptions are, first, by-laws requiring money for ordinary expenditure; secondly, by-laws raising money to be paid in the municipal year in which raised; and, thirdly, by-laws of counties contracting debts or loans not exceeding in any one year twenty thousand dollars.

(9) There is some obscurity in these sections. The meaning seems to be that in addition to the sums required for the ordinary expenditure of the year, a County Council may raise, in the form prescribed, a sum not exceeding twenty thousand dollars without a public vote, but that for any additional amount beyond that sum, the sanction of a vote is necessary. (See sec. 192, subsec. 5.)

(h) The by-law is to be published at length, "as the same is ultimately passed." Hence if, between publication and passing, a material alteration is made in the by-law, the by-law will be invalid. (In re Bryant and the Municipality of Pittsburg, 13 U. C. Q. B. 847.)

within the County, or if there be no such public newspaper, then in a public newspaper published nearest to the County; which said notice may be to the effect following: (i)

ted Counties) of

FORM OF NOTICE.

The above is a true copy of a proposed By-law to be taken Form. into consideration by the Municipality of the County (or Uniat, in the said County (or United 18, at the hour of noon, at which time and place the members of the Council are hereby required to attend for the

Counties) on the

I o'clock in the

purpose aforesaid.

day of

G. H., Clerk.

Municipal Councils may pur

chase public works, and

contract

out imposing

a

yearly rate as provided last sections.

PURCHASE OF PUBLIC WORKS. 225.—(1.) Any Council may contract a Debt to Her Majesty, in the purchase of any of the Public Roads, Harbors, Bridges, Buildings or other Public Works in Upper Canada; and may execute such Bonds, Deeds, Covenants and other Securities to Her Majesty, as the Council may deem fit, for the debts withpayment of the price of any such Public Work already sold or transferred, or which may be sold or transferred, or agreed to be sold or transferred to such Municipal Corporation, and for securing the performance and observance of all or any of the conditions of sale or transfer; and may also pass all necessary by-laws for any of the purposes aforesaid. And all such By-laws, Debts, Bonds, Deeds, Covenants and other Securities shall be valid, although no special or other rate per annum has been settled or imposed to be levied in each year, as provided by the three last preceding sections of this Act: (j)

in the three

for the pay

tracted with

for such

Works.

(2.) But any Council may in any By-law to be passed for Rates may the creation of any such Debt, or for the executing any such be imposed Bonds, Deeds, Covenants or other Securities as aforesaid, to ment of Her Majesty, or in any other By-law to be passed by the debt con Council, settle and impose a Special Rate per annum, of such the Crown, amount as the Council may deem expedient, in addition to all other rates whatsoever, to be levied in each year upon the assessed ratable property within the Municipality, for the payment and discharge of such Debts, Bonds, Deeds, Covenants or other Securities, or some part thereof; and the By-law shall be valid, although the Rate settled or imposed thereby be less than is required by the said sections last mentioned, and the

(i) See note u to sec. 198.

(j) This subsection is taken from statute 14 & 15 Vic. cap. 124,

sec. 1.