Glykis v. Hydro-Québec, [2004] 3 S.C.R. 285, 2004 SCC 60

Hydro-Québec Appellant

v.

Modestos Glykis and Eleftheria Theodossiou Glykis Respondents

Indexed as: Glykis v. Hydro-Québec

Neutral citation: 2004 SCC 60.

File No.: 29588.

2004: April 13; 2004: October 1.

Present: McLachlin C.J. and Bastarache, Binnie, Arbour,^* LeBel, Deschamps and Fish JJ.

on appeal from the court of appeal for quebec

Public services — Supply of electricity — Interruption of service — Customer refusing to pay bill for electricity supplied to his rental property — Hydro-Québec ceasing to deliver electricity to customer’s principal residence — Whether Hydro-Québec may interrupt supply of electricity to service point other than one in respect of which bill unpaid — Bylaw No. 411 establishing the conditions governing the supply of electricity, (1987) 119 G.O. II, 1233, ss. 3 “customer”, “delivery point”, 99.

After a customer refused to pay an amount he owed for electricity services supplied to a rental property he owned, Hydro-Québec, after serving notice on him, interrupted the supply of electricity to his residence even though the account for that delivery point was not in arrears. The customer and his wife brought an action against Hydro-Québec, alleging that they had sustained damage as a result of the interruption of service. The Superior Court dismissed the action, holding that Hydro-Québec has the right to interrupt the supply of electricity to a service point other than the one in respect of which the bill is unpaid. The majority of the Court of Appeal set aside the judgment.

Held (LeBel and Fish JJ. dissenting): The appeal should be allowed.

Per McLachlin C.J. and Bastarache, Binnie and Deschamps JJ.: Regulatory provisions must be interpreted by following the approach to statutory interpretation, with necessary adaptations. Thus, the relevant provision must be read in its entire context, taking into consideration the ordinary and grammatical sense of the words, together with the scheme and object of the statute and the intention of the legislature. In the instant case, s. 99(1) of Bylaw No. 411 establishing the conditions governing the supply of electricity provided the basis for the authority to interrupt service where “the customer fail[ed] to pay his bill on time”. Since a customer, as defined in the bylaw, may have more than one contract, since each contract corresponds to a separate delivery point, and since Hydro-Québec may interrupt service when a customer has not paid his or her bill, the ordinary meaning of the words leads to the conclusion that s. 99(1) allows power to be interrupted at any delivery point in respect of which the defaulting customer holds a contract. Section 99 establishes a relationship between the customer and Hydro-Québec, rather than between a delivery point and the service provider. The right to interrupt service at any delivery point is consistent with other provisions of the bylaw and reflects the legislature’s intention to give Hydro-Québec a means to limit overdue amounts by putting pressure on defaulting customers. The legislative history of Hydro-Québec’s constituent legislation confirms this interpretation. Furthermore, since the service provider does not choose its customers, the possible interruption of service is not an exorbitant or draconian measure, as it is preceded by a warning and affects only the defaulting customer. Nor can the rule limiting the exception for nonperformance of obligations to correlative obligations (art. 1591 C.C.Q.) be an obstacle to the power of interruption exercised in the case at bar. Interpreted in light of arts. 1590 and 300 C.C.Q., the customer’s correlative obligation to Hydro-Québec includes all contracts between them. Finally, this power to interrupt service does not confer a new right, as it dates from the last century and is very similar to powers conferred by law on other public utilities.

Per LeBel and Fish JJ. (dissenting): Since the content of a contract between Hydro-Québec and a customer is determined largely by statutes and regulations, the discretionary power to interrupt the supply of electricity at all of a customer’s service points if the customer has failed to pay a bill relating to one of his or her contracts must be expressly granted by the legislature. However, it can be seen from s. 99 of Bylaw No. 411 establishing the conditions governing the supply of electricity that the contractual relationship between Hydro-Québec and the consumer is founded on a contract. This regulatory scheme based on the concept that contracts are linked to individual service points defines the scope of Hydro-Québec’s power to act. It allows Hydro-Québec to manage contracts, but not to interfere in other contractual relationships. This interpretation nevertheless does not deprive Hydro-Québec of the right to recover the amount of a claim in the ordinary manner. It simply means that Hydro-Québec cannot interrupt service at will other than at the service point linked to the contract in respect of which the dispute has arisen.

Cases Cited

By Deschamps J.

Considered: Montreal Gas Co. v. Cadieux, [1899] A.C. 589; referred to: Boucher v. Commission hydro-électrique de Québec, 1968 566 (QC CQ), [1968] R.L. 347; Delage v. Hydro-Québec, Sup. Ct. Montréal, No. 500-05-013881-73, December 11, 1973; Landry v. Hydro-Québec, Sup. Ct. Québec, No. 200-05-003524-928, October 28, 1992; Dallaire v. Hydro-Québec, Sup. Ct. Québec, No. 200-05-003377-939, January 7, 1994; Godbout v. Hydro-Québec, [2001] R.D.I. 106; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42.

By LeBel and Fish JJ. (dissenting)

Bédard v. Hydro-Québec, [1982] C.A. 518; Montreal Gas Co. v. Cadieux, [1899] A.C. 589, rev’g (1898), 1898 51 (SCC), 28 S.C.R. 382; Solunac v. Hydro-Québec, 2001 17986 (QC CQ), R.E.J.B. 2001-23403.

Statutes and Regulations Cited

Act respecting the mode of payment for electric and gas service in certain buildings, R.S.Q., c. M-37, s. 2.

Act to amend and consolidate the act incorporating the Royal Electric Company, S.Q. 1898, 61 Vict., c. 66, ss. 27, 29.

Act to amend the Act incorporating the New City Gas Company of Montreal, and to extend the powers of the said Company, S. Prov. C. 1849, 12 Vict., c. 183, s. 20.

Bylaw No. 411 establishing the conditions governing the supply of electricity, (1987) 119 G.O. II, 1233, ss. 3 “customer”, “delivery point”, 10, 82(1), 99.

Bylaw No. 634 respecting the conditions governing the supply of electricity, (1996) 128 G.O. II, 2292.

Civil Code of Québec, S.Q. 1991, c. 64, arts. 300, 1437, 1590, 1591.

Electric Power Terms and Conditions of Supply Regulation, Man. Reg. 186/90, s. 17.

Hydro-Québec Act, R.S.Q., c. H-5, ss. 22.0.1 [ad. 1983, c. 15, s. 15], 48.

Nova Scotia Power Incorporated Approved Regulations, November 1, 2002, s. 6.1.

Quebec Hydro-Electric Commission Act, R.S.Q. 1941, c. 98A, s. 51 [ad. 1945, c. 30, s. 22].

SaskEnergy Act, S.S. 1992, c. S-35.1, s. 35.

APPEAL from a judgment of the Quebec Court of Appeal, 2002 23618 (QC CA), [2003] R.J.Q. 36, [2002] Q.J. No. 5661 (QL), reversing a decision of the Superior Court. Appeal allowed, LeBel and Fish JJ. dissenting.

Jules Brière, Hélène Gauvin and Jacinte Lafontaine, for the appellant.

Jérôme Choquette, Q.C., and Jean-Stéphane Kourie, for the respondents.

English version of the judgment of McLachlin C.J. and Bastarache, Binnie and Deschamps JJ. delivered by

Deschamps J. —

I. Introduction

[1] This appeal concerns the right of the appellant, Hydro-Québec, to interrupt the supply of electricity to a service point other than the one in respect of which the bill is unpaid. For the reasons that follow, I would allow the appeal.

[2] In June 1994, the respondent, Modestos Glykis, was the owner of a rental property. He refused to pay the amount he owed for electricity supplied to that property. After serving notice on Mr. Glykis, Hydro-Québec interrupted the supply of electricity to his residence, even though the account for that delivery point was not in arrears. Glykis paid the bill after a few days without power. He and his spouse, Eleftheria Theodossiou, brought an action against Hydro-Québec. They alleged that they had sustained damage as a result of the interruption of service.

[3] Rousseau J. of the Superior Court ruled that the payment was due and that Hydro-Québec had the right to interrupt service: Sup. Ct. Montréal, No. 500-05-013674-955, July 26, 1999. She applied the interpretation given in the vast majority of cases to the provisions enabling Hydro-Québec to take such actions (Boucher v. Commission hydro-électrique de Québec, 1968 566 (QC CQ), [1968] R.L. 347 (Prov. Ct.); Delage v. Hydro-Québec, Sup. Ct. Montréal, No. 500-05-013881-73, December 11, 1973; Landry v. Hydro-Québec, Sup. Ct. Québec, No. 200-05-003524-928, October 28, 1992; Dallaire v. Hydro-Québec, Sup. Ct. Québec, No. 200-05-003377-939, January 7, 1994; Godbout v. Hydro-Québec, [2001] R.D.I. 106 (Sup. Ct.)).

[4] The majority of the Court of Appeal set aside the judgment: 2002 23618 (QC CA), [2003] R.J.Q. 36. Nuss J.A. was of the view that an interruption of service is aimed at preventing a customer’s debt from growing and cannot be used to pressure a customer into paying. According to him, service may be interrupted only at the delivery point with respect to which the bill is unpaid. As for Brossard J.A., he acknowledged that the applicable legislative provisions allowed power to be cut off at a location other than the one with the overdue payment, but found that such a power was exorbitant. Mailhot J.A., dissenting, upheld the Superior Court’s approach and concluded that art. 1590 of the Civil Code of Québec, S.Q. 1991, c. 64 (“C.C.Q.”), gives Hydro-Québec the authority to rely on its bylaws to enforce its right to have a customer perform his or her obligation to pay an overdue bill.

II. Analysis

[5] The approach to statutory interpretation is well-known (Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42). A statutory provision must be read in its entire context, taking into consideration not only the ordinary and grammatical sense of the words, but also the scheme and object of the statute, and the intention of the legislature. This approach to statutory interpretation must also be followed, with necessary adaptations, in interpreting regulations.

A. The Ordinary Sense of the Enabling Statutory and Regulatory Provisions

[6] At the time in question, s. 22.0.1 of the Hydro-Québec Act, R.S.Q., c. H-5 (as am. by S.Q. 1983, c. 15, s. 15), authorized Hydro-Québec to adopt by-laws fixing the conditions for the provision of its service:

22.0.1 The rates and conditions upon which power is supplied must be consistent with sound financial management.

The rates and conditions are fixed by by-law of the Corporation, according to the categories it determines, or by special contracts.

The by-laws and contracts are subject to the approval of the Government.

[7] At the time the dispute arose, s. 99(1) of Bylaw No. 411 establishing the conditions governing the supply of electricity, (1987) 119 G.O. II, 1233 (“Bylaw”), provided the basis for the authority to interrupt service. In 1996, it was replaced by Bylaw No. 634 respecting the conditions governing the supply of electricity, (1996) 128 G.O. II, 2292, but the changes are not relevant to this case. Section 99 reads as follows:

99. Subject to provisions in the Act respecting the mode of instalment for electric and gas service in certain buildings (R.S.Q., c. M-37), Hydro-Québec may refuse to supply or deliver electricity or may interrupt the supply or delivery of it in the following cases:

(1) the customer fails to pay his bill on time;

(2) a federal, provincial or municipal agency with jurisdiction in this realm orders it to do so;

(3) public safety requires that it do so;

(4) the customer defrauds, manipulates or tampers with metering equipment or any other Hydro-Québec equipment, impedes the supply or delivery of electricity or contravenes Section 104;

(5) the customer refuses to provide Hydro-Québec with information required under this Bylaw or supplies erroneous information;

(6) the customer refuses to make the deposit or supply any other guarantee required under this Bylaw;

(7) the customer fails to make the modifications or adjustments necessary to ensure that his electrical installation complies with requirements stipulated in this Bylaw or, despite Hydro-Québec’s request that he do so, fails to eliminate the causes of disturbances on the system;

(8) the customer does not use electricity in accordance with conditions and requirements stipulated in Division 1 of this Chapter;

(9) contrary to Section 103, the customer refuses Hydro-Québec representatives access to his premises;

(10) contrary to Section 65, the customer refuses to allow the installation on his premises of Hydro-Québec’s equipment, including metering and control equipment;

(11) the customer’s electrical installation has been connected to Hydro-Québec’s system without the latter’s approval;

(12) the customer’s electrical installation has not been approved or, as the case may be, authorized by an authority having jurisdiction in this realm according to any applicable legislative or regulatory provision; or

(13) an individual, partnership, corporation or organization covered by Section 14 uses electricity without having concluded a contract.

[8] The word “customer”, which appears in 10 of the 13 subsections of s. 99, is defined in s. 3 of the Bylaw:

customer: An individual, partnership, corporation or organization having one or more contracts.

[9] Section 3 also defines the term “delivery point”:

delivery point: Point located immediately on the load side of Hydro-Québec’s metering equipment and from which electricity is put at the disposal of the customer. In cases where Hydro-Québec does not install metering equipment, or where it is on the line side of the connection point, the delivery point is the connection point.

[10] Moreover, s. 10 expressly provides that “[e]very delivery point is covered by a separate contract”, except in certain circumstances not applicable in the case at bar.

[11] There is no provision expressly limiting the exercise of the right to interrupt service to the location for which the bill is outstanding.

[12] According to the ordinary meaning of the words, since a customer, as defined in s. 3, may have more than one contract, since each contract corresponds to a separate delivery point, and since Hydro-Québec may interrupt service when a customer has not paid his or her bill, it follows that s. 99(1) allows power to be interrupted at any delivery point in respect of which the defaulting customer holds a contract.

[13] The use in s. 99(1) of the words “his bill” in the singular form in the phrase “fails to pay his bill” gives another indication of the ambit of the provision. The possessive adjective “his” links the customer to the bill, and the bill is in no way linked to the “contract” or “delivery point”, as neither of these terms even appears in the provision. Use of the plural rather than the singular form would have meant that all bills relating to all delivery points would have to be in arrears before service could be interrupted. Thus, the provision refers to one bill for one contract out of all the contracts the customer may have signed. Had the definite article been used, as in “the customer fails to pay the bill”, the bill would not have been linked to the customer. Finally, connecting the bill to the one delivery point with an account in arrears would make the use of the word “customer” superfluous. Had the legislature intended to limit the application of the provision to the place in respect of which the bill was unpaid, the use of the word “contract” or “delivery point”, both of which entail a limitation, would have been sufficient.

[14] The introductory paragraph to s. 99 also supports this interpretation. The paragraph provides for two measures: refusing to supply or deliver electricity and interrupting the supply or delivery thereof. Had the legislature intended that the service be limited to the delivery point in respect of which the bill was unpaid, there would be no need to mention the refusal to supply or deliver electricity in cases where the customer has not paid. Clearly, no unpaid bills can exist before the electricity is supplied or delivered. The refusal to supply or deliver services can relate only to cases where the customer has not paid his or her bill for another delivery point. For the first subsection to be interpreted in harmony with the introductory paragraph, it must allow for the interruption of service at any delivery point where service is provided to a customer.

[15] Aside from s. 99(13), which applies to cases where power is fraudulently obtained by a person without a contract, and ss. 99(2) and 99(3), which apply to circumstances over which the parties have no control, the wording of s. 99 establishes a relationship between the customer and Hydro-Québec, rather than between a delivery point and the service provider.

[16] There are references to this supplier-customer relationship elsewhere in the Bylaw. In certain circumstances, Hydro-Québec may, pursuant to s. 82(1), require a deposit in the case of a contract covering domestic use. For example, a person requesting service may be required to provide a deposit if he or she failed to pay by the due date a bill for a contract he or she holds or held. Thus, s. 82(1) also establishes a connection between the customer and Hydro-Québec, rather than between Hydro-Québec and individual delivery points.

[17] Given the ordinary sense of the words used in the definitions in the Bylaw, and based on a grammatical analysis, the interpretation according to which an interruption of service may take place at any delivery point must prevail.

B. The Scheme and the Object of the Provision

[18] The Bylaw sets out the conditions for the supply of the service. The obligational content of a contract between Hydro-Québec and a customer is not open to negotiation between the parties. Hydro-Québec may not impose special conditions if the customer is or is expected to become insolvent. If the customer meets the conditions set out in the Bylaw, Hydro-Québec is required to provide the service. In a free market, a service provider may, except where this would be inconsistent with its constitutional obligations, refuse to do business with a customer it believes to be insolvent. However, the obligation to provide the service to the public ceases to apply where a customer fails to pay his or her bill. The provision is undeniably to Hydro-Québec’s advantage. It not only places limits on debts, but also offers an effective means of putting pressure on defaulting customers and inciting them to pay what they owe.

[19] The amount owed by an individual customer may be very small compared with the costs of legal proceedings. The Bylaw therefore gives Hydro-Québec another means to put pressure on its customers. Insofar as the service provider does not choose the customers it does business with, a possible interruption of service is not, in my view, an exorbitant or draconian measure. On the one hand, the exercise of this right is preceded by a warning; on the other hand, the interruption affects only the defaulting customer. It should be noted that the introductory paragraph includes an important limitation that protects apartment dwellers whose rent includes the cost of electricity. In such cases, Hydro-Québec may not interrupt service and thereby deprive persons of electricity when they have already paid for it in paying their rent, which is often the case for senior citizens. This type of contract is covered by the Act respecting the mode of payment for electric and gas service in certain buildings, R.S.Q., c. M-37, which provides that Hydro-Québec can have rent assigned to it should the customer be in default (s. 2). In such cases, Hydro-Québec may not interrupt service but is not limited to going to court to collect outstanding amounts.

[20] It is difficult to understand how an approach that favours poorer customers who cannot pay their bills could modify the interpretation adopted above as regards the power to interrupt. People whose rent includes the cost of electricity are not affected as a result of the wording of the introductory paragraph quoted above. Moreover, the only effect of the interpretation supported by the majority of the Court of Appeal would be to favour customers holding two or more contracts, which is not generally the case for poorer citizens. It would of course be possible to conjure up pathetic cases, but this is not the case here. More importantly, the parties did not argue that Hydro-Québec had improperly exercised its discretion in deciding to interrupt service. Only its authority to make such a decision has been challenged.

[21] The argument that the mandatory nature of the service contract is a source of law or a ground for an interpretation favourable to the respondents cannot be accepted either. Neither Hydro-Québec nor the customer may change the content of the contract, the terms of which are dictated by the Bylaw. Thus, no judge may circumvent or reduce the obligations flowing from the contract on the ground that it is a contract of adhesion within the meaning of art. 1437 C.C.Q.

[22] The provision authorizing interruptions of service is limited in scope, but its purpose is clearly not to protect the customer and cannot be raised in support of an interpretation favourable to the customer. Rather, it supports an interpretation that allows for the expeditious resolution of disputes between Hydro-Québec and its customers. Neither the wording nor the purpose of the provision when considered in the overall context of the Bylaw warrants regarding the provision as only a means to prevent debts from growing.

C. The Legislative Context

[23] The Royal Electric Company already had the authority to interrupt service when it was integrated into Hydro-Québec. Sections 27 and 29 of the Company’s constituent legislation (Act to amend and consolidate the act incorporating the Royal Electric Company, S.Q. 1898, 61 Vict., c. 66) provided as follows:

27. If any person supplied by the company neglect [sic] to pay the rent, rate or charge due to the company at the time fixed for the payment thereof, the company, or any person acting under its authority, on giving eight days’ previous notice, may stop the supply to the person in arrears, as aforesaid, by any means the company or its officers may see fit to use; and the company may recover the rent or charges then due, together with the expenses of cutting off the electricity, notwithstanding any contract to furnish for a longer time.

28. The two preceding sections shall not prevent any of the provisions therein contained being altered or modified by contract.

[24] This power was retained and has been enjoyed by Hydro-Québec ever since s. 51 of the Quebec Hydro-Electric Commission Act, R.S.Q. 1941, c. 98A (as am. by S.Q. 1945, c. 30, s. 22), was enacted in 1945:

51. The Commission may avail itself of the provisions of sections 26, 27, 28, 29 and 32 of the act 61 Victoria, chapter 66.

[25] When the Hydro-Québec Act was amended in 1983, the text of former s. 51 was retained in s. 48 despite the adoption at the same time of s. 22.0.1, which authorizes the passing of bylaws:

48. The Company may avail itself of the provisions of sections 26, 27, 28, 29 and 32 of chapter 66 of the statutes of 1897-1898.

It may also take advantage of the provisions of sections 16, 18 and 19 of the Act 12 Victoria, chapter 183 (Provincial Statutes of Canada) and of section 20 of the said Act as amended by section 8 of the Statutes of Québec, 1872, chapter 61.

[26] A similar power to interrupt service was granted to the New City Gas Company of Montreal: Act to amend the Act incorporating the New City Gas Company of Montreal, and to extend the powers of the said Company, S. Prov. C. 1849, 12 Vict., c. 183. This provision was considered by the Privy Council in Montreal Gas Co. v. Cadieux, [1899] A.C. 589. Preferring an interpretation based on the supplier-customer relationship to one based on the point of delivery, Sir Henry Strong, writing for the court, stated the following (at pp. 592-93):

There is nothing in the Act to limit the right of the company to the service-pipes of the defaulter in a particular building or connected with a particular meter in respect of which the default has been committed. There is nothing in the Act to throw the rate, rent, or charge for gas upon the premises for which the supply is furnished, or to make it payable out of the premises of the defaulter. The supply is to the consumer and the default is the consumer’s default. His liability to the company is a liability for the whole of the debt which he owes them at the time.

Their Lordships are unable to see anything unreasonable in the particular instance given, or anything unreasonable in a provision authorizing a gas company to cease supplying a customer who will not pay his gas bills; but the real answer to the argument of the learned judge is that it is not for the Court to pronounce an opinion upon the policy of the Legislature. Their only duty is to give effect to the language of the Legislature construing it fairly. It seems impossible to find the limitation in question in the language of the statute without introducing some proviso or some qualifying words which are not there.

[27] By referring specifically to chapter 66 of the statutes of Quebec from 1898, the legislature could not, in my opinion, have expressed more clearly its intention to preserve the law as interpreted by the Privy Council. This not only enabled Hydro-Québec to pass a bylaw authorizing the interruption of service at a point other than the one in respect of which an amount is overdue, it also incorporated by reference a judicial interpretation confirming the scope of the power to interrupt service.

[28] The legislative history therefore confirms the interpretation given by the Superior Court and the minority of the Court of Appeal.

[29] However, the respondents argue that, in the context of the coming into force of the Civil Code of Québec and, more specifically, of art. 1591 C.C.Q., an interruption of service may be used only in answer to failure to perform a correlative obligation. According to them, only an interruption of service corresponding to the contract for which the bill is unpaid is compatible with the rule limiting the exception for nonperformance of obligations to correlative obligations.

[30] This argument, which was endorsed by one of the judges of the majority of the Court of Appeal, cannot be accepted. Article 1590 C.C.Q. provides that creditors may take any other measure provided by law to enforce their right to the performance of an obligation:

1590. An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay.

Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence,

(1) force specific performance of the obligation;

(2) obtain, in the case of a contractual obligation, the resolution or resiliation of the contract or the reduction of his own correlative obligation;

(3) take any other measure provided by law to enforce his right to the performance of the obligation.

[31] Hydro-Québec has the right, as limited by the Bylaw, to interrupt the service provided to a customer. The power is reinforced both by the third subparagraph of the second paragraph of art. 1590 C.C.Q. and by art. 300 C.C.Q., which states that public bodies are primarily governed by their special Acts:

300. Legal persons established in the public interest are primarily governed by the special Acts by which they are constituted and by those which are applicable to them; legal persons established for a private interest are primarily governed by the Acts applicable to their particular type.

Interpreted from this perspective, the customer’s correlative obligation to Hydro-Québec includes all contracts between them. Neither art. 1590 nor art. 1591 C.C.Q. is an obstacle to the power to interrupt service. On the contrary, they incorporate it.

[32] The power to interrupt service does not confer a new right. It dates from the last century and is very similar to powers conferred by law on other public utilities (SaskEnergy Act, S.S. 1992, c. S-35.1, s. 35; Electric Power Terms and Conditions of Supply Regulation, Man. Reg. 186/90, s. 17; Nova Scotia Power Incorporated Approved Regulations, November 1, 2002, s. 6.1).

III. Conclusion

[33] The right to interrupt service at a location other than the one in respect of which the bill is unpaid is expressed clearly. This right is consistent with other provisions of the Bylaw and reflects the legislature’s intention to give Hydro-Québec a means to limit overdue amounts by putting pressure on defaulting customers.

[34] Hydro-Québec did not request costs in this Court. On the contrary, it offered to pay the respondents’ judicial costs and such reasonable extrajudicial costs as might be fixed by the Court. Nor did Hydro-Québec ask for its costs in the Court of Appeal.

[35] For these reasons, I would allow the appeal, set aside the judgment of the Court of Appeal without costs and uphold the judgment of the Superior Court dismissing the action with costs. As for the judicial and extrajudicial costs connected with the appeal to this Court, Hydro-Québec is ordered to pay the respondents an amount to be fixed by the Registrar on a solicitor-client basis.

English version of the reasons delivered by

[36] LeBel and Fish JJ. (dissenting) — We have considered the reasons of our colleague Justice Deschamps. With respect, we do not agree. In our view, rather, the judgment of the Quebec Court of Appeal (2002 23618 (QC CA), [2003] R.J.Q. 36), in particular as explained in the reasons of Nuss J.A., correctly interprets s. 99 of Hydro-Québec’s bylaw entitled Bylaw No. 411 establishing the conditions governing the supply of electricity, (1987) 119 G.O. II, 1233.

[37] It is not our intention to go back over either the statement of facts of our colleague Deschamps J. or her presentation of the history of the regulatory and statutory provisions relevant to this case. Our disagreement is limited to Hydro-Québec’s contention that it has an exceptional power allowing it, should a customer fail to pay a bill relating to one contract, to interrupt service in respect of all of the customer’s contracts.

[38] The efficacy of such a measure — the interruption of service — to put pressure on customers is not a valid reason for giving judicial recognition to this power if it has not been granted to Hydro-Québec by the legislature. The contract with Hydro-Québec is an example of a regulated contract between a public utility and a customer (Bédard v. Hydro-Québec, [1982] C.A. 518). The content of such a contract is determined largely by statutes and regulations. The power claimed by Hydro-Québec must fall within the legal framework defined by those statutes and regulations.

[39] In essence, Hydro-Québec submits that it has a discretionary power to interrupt the supply of electricity at all of a customer’s service points if the customer has failed to pay or is late in paying a bill relating to any one of his or her contracts. According to the appellant, this power is not subject to due diligence. It may be exercised as the appellant sees fit, whether the debt be $5, $500 or $50,000. Thus, Hydro-Québec may exercise it to put pressure on a customer even if the customer has the most legitimate of arguments that a particular amount is not due.

[40] Once again, such a power would have to have been effectively and expressly granted by the legislature. There is no clear indication of this in the statutes and regulations relied on by the appellant. In his reasons for judgment, Brossard J.A. of the Court of Appeal stressed that this authority had been granted — if it had in fact been granted — only by reference to nineteenth-century legislation governing the activities of public utilities whose undertakings have since been incorporated into the one now operated by Hydro-Québec (at paras. 30-31):

[translation] This exorbitant power is not even conferred upon it [Hydro-Québec] directly and expressly by its enabling statute. It is conferred upon it by use of the legislative technique of reference to an 1898 statute entitled An Act to amend and consolidate the act incorporating the Royal Electric Company.

Sections 27 and 28 of the 1898 Act reproduced, mutatis mutandis, the provisions relating to the power conferred upon the New City Gas Company of Montreal by the Act to amend the Act incorporating the New City Gas Company of Montreal, and to extend the powers of the said Company.

[41] Thus, the legislation incorporating the Royal Electric Company restated the substance of s. 20 of the statute governing the New City Gas Company of Montreal (S. Prov. C. 1849, 12 Vict., c. 183). The various formulations of these provisions granted a variety of powers to private companies that enjoyed local monopolies. Their provisions indirectly form part of the statutory and regulatory framework of a Crown corporation that now holds a monopoly over the distribution of electricity in Quebec, and may now affect the nature of contractual relations between, on the one hand, a Crown corporation that must provide a public service to a clientele it does not choose and, on the other hand, customers who must buy their electricity from it.

[42] The appellant’s position on the scope of its powers is based on the Privy Council’s decision in Montreal Gas Co. v. Cadieux, [1899] A.C. 589. The Privy Council reversed a decision of this Court regarding the interpretation of the provisions authorizing the supplier to interrupt service (Cadieux v. Montreal Gas Co. (1898), 1898 51 (SCC), 28 S.C.R. 382). According to the interpretation adopted by the Privy Council, the power to interrupt the supply of electricity applied to all of a customer’s contracts. This Court had come to a different conclusion that restricted the exercise of this power exclusively to the delivery point in respect of which the debtor was in default. We think it helpful to reproduce here the following passage from the reasons of Girouard J. of this Court in Cadieux (at pp. 386-87):

Exorbitant powers like those conferred by section twenty must be construed strictly, and if ever intended to cover all the buildings or premises of the same proprietor, or occupant, when in default with regard to one of them only, must be granted in clear and no ambiguous language. The express provision contained in that section that the notice to cut off must be given “to the occupier or person in charge,” plainly indicates that only premises so occupied and in default must suffer. Clause six of the contract of the respondents with the city of Montreal, containing a stipulation that they will “collect and receive the several sums of money at any time due by the gas consumers from the latter only,” and not from the city, conveys the same idea. Cutting off the gas is the most efficient mode of collection and must therefore be enforced against the consumer, that is the occupant only of the premises in default. To allow a different interpretation of the words of the statute would lead to the most absurd consequences, as for instance, when the proprietor has ordered gas meters for several premises occupied by different tenants in the same or separate buildings, or when a corporation like the city of Montreal neglects to pay its gas bill on its buildings, or some of them, but not on its streets. These results must be avoided if a reasonable construction of the statutes would permit us to do so.

[43] Although it was reversed, this judgment gave a better account of the nature of the relationship between service providers and buyers. At any rate, the legislative context has since evolved. Hydro-Québec has absorbed the companies that were granted these powers. The series of references to provisions worded in various ways make it necessary to determine whether the legislature really intended to grant Hydro-Québec powers as extensive as it submits in respect of all the activities connected with its monopoly over the distribution of electricity to consumers. Moreover, such powers depart from the general principles of the law of contracts stated clearly in art. 1591 of the Civil Code of Québec, S.Q. 1991, c. 64, the relevance of which Brossard J.A. noted at para. 38 by highlighting certain of its words:

1591. Where the obligations arising from a synallagmatic contract are exigible and one of the parties fails to perform his obligation to a substantial degree or does not offer to perform it, the other party may refuse to perform his correlative obligation to a corresponding degree, unless he is bound by law, the will of the parties or usage to perform first.

[44] Hydro-Québec’s interpretation of the statutory and regulatory provisions in issue likens the nonperformance of a specific contract to the nonperformance of all agreements between it and the customer. The parties could of course agree that this would be the case. The rules respecting compensation may also apply in appropriate circumstances. The legislature, too, may require the application of such rules. However, the principle that contracts are interpreted and applied separately is all the more valid in the case at bar given that Hydro-Québec’s regulatory scheme is based on the concept that contracts are linked to individual service points.

[45] In this regard, Nuss J.A. (at para. 68) cited with approval the judgment of the Court of Québec in Solunac v. Hydro-Québec, 2001 17986 (QC CQ), R.E.J.B. 2001-23403, at para. 107, where Gosselin J.C.Q. stated the following: [translation] “The entire scheme of the Bylaw is based on the equation ‘delivery point equals contract equals customer’, as has already been demonstrated.” It can be seen from s. 99 of the relevant bylaw that the contractual relationship between Hydro-Québec and the consumer is founded on a contract. Reference is made to a “customer”, but always in relation to a “contract”, which itself relates to an individual service point. This regulatory scheme defines the scope of Hydro-Québec’s power to act. It allows Hydro-Québec to manage contracts, but not to interfere in other contractual relationships.

[46] This interpretation nevertheless does not deprive Hydro-Québec of the right to recover the amount of a claim in the ordinary manner. It simply means that the appellant cannot interrupt service at will other than at the service point linked to the contract in respect of which the dispute has arisen. For these reasons, we are of the opinion that the judgment of the majority of the Court of Appeal was correct and this appeal should be dismissed with costs.

Appeal allowed, LeBel and Fish JJ. dissenting.

Solicitors for the appellant: Lavery, de Billy, Québec.

Solicitors for the respondents: Choquette Beaupré Rhéaume, Montréal.

^*Arbour J. took no part in the judgment.