McGILL LAW JOURNAL
Volume 12
Montreal
1966
Number 3
Canada’s Need for a Central Aircraft Registry
By D. I. Johnston* and B. F. Kennerly**
In Canada today the prospective purchaser of an aircraft is often
surprised to learn that there is no way by which he can assure himself
of clear title in return for the purchase price he pays. Nor can
the financial institution which advances the purchase money against
the security of a mortgage or other encumbrance, ensure that there
are no other prior claims or that its own security will take precedence
over subsequent purchasers, mortgagees and other creditors. These
problems arise because Canada does not have a central registry for
the recordation of security interests in civil aircraft. The lack of
such a registry has had a detrimental effect upon the orderly
development of Canadian aviation and in particular creates a serious
impediment in aircraft financing transactions.
Canada is a signatory of the Convention on the International
Recognition of Rights in Aircraft, 1948 but is unable to take advantage
of the protection offered by the Convention until a central registry
is established, for the reason that security rights will only be respected
abroad in member States when such rights have been duly recorded
in a central register maintained in Canada. The Convention is intended
in international
to facilitate the financing of aircraft employed
carriage and has to date been ratified by twenty-two nations,’ with
adherences received from a further three nations.2 It is particularly
significant for Canada that both the United States of America and
Mexico have ratified the Convention so that, with Canada’s ratifica-
The present article includes certain material and case references from a
brief on the same subject prepared by the Air Law Section of the Canadian Bar
Association in May, 1964.
* Of the Bar of the Province of Quebec.
** Of the Bar of Ontario.
McGILL LAW JOURNAL
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tion, the protection of the Convention would cover a geographical area
extending from the south of Mexico to the Arctic Ocean, including
Alaska, and security rights in all civil aircraft in the three countries
would be recorded in three registers.
Interested Parties
The interest in title to an aircraft is twofold. Firstly, there are
those persons who are concerned with what prior liens or encumbran-
ces in the form of chattel mortgages, conditional sales contracts,
etc. affect the title to the aircraft and secondly, there are those
persons who are concerned with the registration or giving of notice
to subsequent purchasers, mortgagees or creditors of prior interest
in the title to the aircraft.
While obtaining a clear title is of obvious importance to an
individual buying a ten thousand dollar private airplane, it is essential
to a company which is about to make a million dollar capital expendi-
ture to acquire an executive jet aircraft. In buying a new aircraft
from a manufacturer, the purchaser can usually rely upon the repre-
sentations and warranties as to title contained in the sales contract,
but the manufacturer or vendor which sells on terms under a title
retention arrangement or mortgage is concerned with protecting its
prior interest and being able to repossess the property in an event
of default. If the manufacturer or vendor of a new or used aircraft
finances the sale, the lending institution while being initially concerned
that clear title can be obtained, has the same secondary concern that
its preferred position under a conditional sales contract or chattel
mortgage will prevail over any claims of subsequent purchasers,
mortgagees and other creditors. The lack of a central registry has
also created a problem for Canadian airlines endeavouring to sell
used flight equipment abroad since the prospective purchaser cannot
1 The countries and effective dates are as follows : Argentina (May 1, 1958),
Brazil (October 1, 1953), Chile (March 18, 1956), France (May 27, 1964), Italy
(March 6, 1961), Mexico (September 17, 1953), Netherlands (November 30, 1959),
Switzerland (January 1, 1961), U.S.A. (September 17, 1953), Denmark (April
18, 1963), Norway (June 3, 1954), Sweden (February 14, 1956), Cuba (Septem-
ber 18, 1961), Pakistan (September 17, 1953), Federal Republic of Germany
(October 5, 1959), Haiti (June 22, 1961), Mali (March 28, 1962), Islamic Republic
of Mauretania (October 21, 1963), Niger (March 27, 1963), Algeria (November
8, 1964), Ivory Coast (November 21, 1965) and Tunisia (August 2, 1966).
2 Adherences were received from Laos (September 9, 1956), Ecuador (October
12, 1958) and El Salvador (November 12, 1958).
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
227
determine what prior liens and encumbrances may exist. The suppliers
of engines and certain other major components and spares for air-
craft are also interested in being able to record their prior interest
and thereby protect themselves against such contingencies as default
in payment, bankruptcy or insolvency on the part of the customer
who has purchased on credit or leased the items in question.
The ease and cost of obtaining financing are normally related
to the degree of title protection that the financial institution may
obtain on its security. The element of risk in losing one’s security
is a factor in determining the rate of interest to be charged. What
trust company would consider granting a mortgage on real estate,
be it a summer cottage or an office building, without first ascertaining
that the title was free and clear and that its mortgage constituted
a valid and enforceable prior right upon the property ?
The registry problem has the appearance of being further com-
plicated by the existence at the Department of Transport offices in
Ottawa of a register of the owners of Canadian civil aircraft. The
Certificate of Registration for a Canadian aircraft issued by the
Department of Transport is misleading to the uninformed and does
not mean that the “owner” thereon named has clear legal title to
the aircraft. In fact, the purchaser under a conditional sales contract
or the lessee under a long term lease, who has no legal title to the
aircraft, is named on the Certificate of Registration as the “owner”
and is so defined in the Air Regulations.
Current Situation in Canada
Interested parties must search in all common law provinces of
Canada where the aircraft may have been for any registered encum-
brances against the aircraft. The log book of the aircraft is of some
assistance in determining where to search, but log books are not
always accurate, and if a fraud is to be perpetrated, the fraudulent
person is unlikely to disclose in the log book that the aircraft was
ever located at the place where the encumbrance is registered. A proper
search for encumbrances would involve searching every county where
the aircraft may have been in every common law province that did
not have a central registry. The search would be somewhat easier
in those common law provinces where a central registry was located.
Failure to make such a complete search may result in the aircraft
landing at a distant airport only to be repossessed or seized under
an encumbrance registered in the county or province where the
airport is located. It is obvious that great time and expense is involved
McGILL LAW JOURNAL
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in making a proper search. Even after completing such an exhaustive
and expensive title search, the aircraft title may still be affected
by an encumbrance in the Province of Quebec that is not required
to be registered.
Each of the nine common law provinces of Canada has by legisla-
tion provided for the registration of chattel mortgages and conditional
sales contracts excepting Manitoba which does not require the regis-
tration of conditional sales contracts. In some provinces registration
is made in the county where the aircraft is situated at the time
and must be made within a limited time after the date of the trans-
action. This registration is effective notice to subsequent purchasers,
mortgagees and, in some instances, creditors of the person in pos-
session of the aircraft, provided the aircraft is not moved out of the
county where the registration was made.
The common law provinces of British Columbia, Saskatchewan and
Alberta have each established a central registry for the province to
include aircraft, so that provision is made for the registration of
encumbrances with effect so long as the aircraft does not leave the
province. The Province of Newfoundland is in a similar position as
there is only one registry for encumbrances for the whole of the
province.
All of the common law provinces have legislative provisions for
the re-registration of chattel mortgages and conditional sales contracts
when the aircraft is moved, in some cases where there is not a central
provincial registry, from one county to another in the same province,
and in all cases where the aircraft is moved from one province to
another. The time limit for such re-registration varies from twenty
(20) days to two months, and in some provinces the time runs from
when the mortgagee or conditional seller receives notice of the re-
moval of the aircraft, and in other provinces the time for re-registration
runs from the time the aircraft is moved notwithstanding the mort-
gagee or conditional seller did not know about the move.
The Province of Quebec does not have a system of registration
comparable to that of the common law provinces. The registration of
encumbrances against moveable property is the exception rather than
the rule with registration only being possible in certain instances.
Moveable property is susceptible of registration under a trust deed
and an aircraft financing could be handled in this manner. Recently
the Civil Code was amended to introduce a non-dispossessory category
of pledge for certain commercial transactions. The validity of com-
mercial pledge is dependent upon registration locally in the district
in which the property is located and the protection of the pledge is
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
229
questionable when dealing with property as mobile as an airplane.
There is no means of registering a conditional sales contract in Quebec
and in general it is not possible for a purchaser of moveable property
to ascertain what prior claims or title interest exist.
The finance agency, to protect its interest in the aircraft secured
by a chattel mortgage or conditional sales contract, must follow the
movement of the aircraft and register its security in accordance
with the particular laws of the province where the aircraft is from
time to time located. Failure to do so may result in loss of its
interest in the aircraft. A further difficulty is encountered in that
the registration of chattel mortgages and conditional sales contracts
must be renewed after periods varying from one to three years
depending on the province of registration.
An example of the present situation in Canada is this : if an
aircraft is sold to an operator based at Malton Airport, the seller
taking a chattel mortgage from the purchaser as security, and re-
gisters the chattel mortgage in the County of Peel where Malton
Airport is located. Unknown to the conditional seller, the aircraft is
moved to Toronto Island Airport and remains there for a few months
during which time the purchaser goes into bankruptcy. The Toronto
Island Airport is situated in the County of York and the relevant law
of Ontario requires that the chattel mortgage must be registered in
the County of York within two months after the aircraft is moved
there. The failure to re-register in the County of York results in the
seller who held the chattel mortgage losing that security and only
being able to claim in the bankruptcy as an unsecured creditor.
Another example that has actually occurred was the case of an
aircraft based at Winnipeg that was flown to Ontario and left in
Ontario as security for charter services rendered. About three months
after the aircraft had arrived in Ontario the finance agency, who held
a chattel mortgage registered in Winnipeg, discovered that the aircraft
had been moved to Ontario, at which time it was too late to re-register
the chattel mortgage in Ontario. The finance agency, as a result, lost
its security in the aircraft.
United States Central Registry
The problem of recording security interests in aircraft was solved
in the United States of America in 1938 when that country established
a central registry. The registry was originally located in Washington,
D.C. but was subsequently moved to Oklahoma City, Oklahoma where
it is today. The procedures observed by the registry are simple and
McGILL LAW JOURNAL
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expeditious. A title search of any civil aircraft in that country can be
made within a matter of a few hours by a telephone call to any one
of several firms of attorneys in Oklahoma City, the only information
required being the identification of the aircraft in question.
At the Hearing on June 18th, 1963 before a Subcommittee of the
Committee on Interstate and Foreign Commerce of the House of
Representatives with respect to an amendment to Section 503 of the
Federal Aviation Act, 1958, Mr. James D. Hill, then Deputy General
Counsel of the Federal Aviation Agency, described the history and
function of the twenty-five year old registry in the following terms :
“… Section 503 of the Federal Aviation Act… in effect creates
a national recording systems for title to aircraft. That section
originally was a part of the Civil Aeronautics Act of 1938 and was
later transposed without any substantive change into the Federal
Aviation Act of 1958. It was an early congressional response to a
pressing problem in the aviation industry.
It had become apparent that the recording systems of the
various States to record interests in personal property presented
special difficulties with regard to aircraft.
It is my understanding that originally the Commissioners on
uniform State laws recommended to the Congress that there be
a national recording system for aircraft because local recording
systems which were perfectly fine for real estate, refrigerators,
television, or other appliances are not effective for aircraft, so the
Congress did in the Civil Aeronautics Act of 1938, create a Federal
recording system.., so in ascertaining whether clear title exists
to an aircraft, the public need consult only one file instead of the
county recorder in 10,000 different counties and that is the file
maintained at Oklahoma City by our Aircraft Registration Branch
of the Federal Aviation Agency”.
The Geneva Convention
The major airlines of Canada have international routes the main-
tenance of which requires that a certain proportion of the airlines’
equipment be continuously in foreign countries. Such equipment
includes spare engines, spare parts, handling equipment and special
tools dispersed at depots at various international centres, in addition
to the aircraft which make daily flights from country to country
and from continent to continent. Certain of the country’s regional
carriers are now operating international charter services as well. This
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
231
situation poses a serious problem to the airline and to any financial
institution concerned since it is usually difficult to predict the extent
to which property rights and security interests in such equipment
will be recognized by foreign courts. Until the present, this has been
largely regarded as a calculated risk for the financial institution
and the practice has been to limit the risk by stipulating in the
security instrument as a condition precedent to default that not more
than a certain specified number of aircraft and amount of spares
can be outside of the country of registration at any one time.
It was the intention of the Legal Committees of the International
Civil Aviation Organization and the International Air Transport Asso-
ciation to resolve this problem when, in 1948, the Convention on the
International Recognition of Rights in Aircraft, known as the Geneva
Convention, was opened for signature in Geneva, Switzerland.
The general objective of the Convention is the facilitation of the
financing of aircraft employed in international carriage. More spe-
cifically, the objectives can be said to be four : the protection of
secured creditors who lend money on the security of aircraft; the
protection of third parties, dealing in or with aircraft against hidden
charges; the definition and protection of “privileged” and “priority”
claims against aircraft; and the facilitation of the transfer of aircraft
from one nationality to another.
Under the Geneva Convention two conditions are required before
a right is recognized and enforced : first, it must be constituted in
accordance with the law of the contracting State in which the aircraft
was registered as to nationality at the time of its constitution; and
second, the right must be recorded in a central registry of the con-
tracting State in which the aircraft is registered as to nationality.
No State is obliged to establish a central registry but since “recorda-
tion” is a condition of recognition, it was assumed that a State ratify-
ing the Convention would necessarily establish a central registry to
obtain recognition of the rights of its own secured creditors. The
priority of recorded rights and the regularity of the record are left
to be governed by the law of the State maintaining the record.
There are two practical effects of recognition by the Convention
worthy of note. Under Article 1 (2) once a valid charge were, for
example, entered in the Canadian registry by a vendor or creditor
in Canada a foreign court would be obliged to give such a charge
priority over all other claims arising in the foreign member State,
with the exception of certain claims relating to salvage and preserva-
tion of the aircraft. Another advantage to the secured creditor results
from Article IX of the Convention which prohibits the transfer of
McGILL LAW JOURNAL
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the aircraft to another national register unless the holders of all
recorded charges have been satisfied or consent to the transfer.
The Geneva Convention has been ratified by the United States of
America, Mexico, Pakistan, Germany, Brazil, Norway, Sweden, Den-
mark, Chile, Argentina, France, Italy, Netherlands, Switzerland, Cuba,
Haiti, Mali, Islamic Republic of Mauretania, Niger, Algeria, Ivory
Coast and Tunisia and adherences have been received from Laos,
Ecuador and El Salvador. Although Canada signed the Convention
in 1948, little would be accomplished by its ratification until the
central registry for security rights in aircraft has been established.
It is significant that the ratification of the Convention by Canada
would extend security protection to North America creditors over
that vast area extending from the southern border of Mexico to the
Arctic coastline of Alaska and Canada. Since Canada, the United
States of America and Mexico would then be adjacent contracting
States, a security holder would be able to ascertain his legal rights
by merely searching three registers.
Canadian manufacturers of aircraft and engines are reluctant to
sell into certain foreign markets on credit terms without some form
of credit insurance either obtained commercially or, more commonly
in the case of aircraft sales, through the Export Credits Insurance
Corporation. A wider acceptance of the Geneva Convention and, in
particular, its ratification by Canada will reduce the security risk and
should result in lower credit insurance premiums on aircraft sales,
a saving which can be passed on to the customer.
A Proposed Solution
The present situation could be solved by the establishment at a
central location of a Central Aircraft Registry for the registration
of all aircraft liens and encumbrances affecting Canadian civil aircraft
and engines and by the subsequent ratification by Canada of the
Geneva Convention. The Canadian Bar Association recommended the
establishment of such a registry in 1956 and more recently, in May,
1964, submitted a brief on the subject to the Government of Canada.
No action has been taken by the Department of Transport to imple-
ment these proposals, although it is understood that the matter has
been under consideration for several years.
The establishment of the registry could be effected with a mini-
mum of administrative burden and delay. The expense involved would
not be appreciable since all that is physically required is a set of files
administered by a few persons who undoubtedly would have other
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
233
duties. The registry should be located centrally from a geographic
point of view, having regard to the greatest concentration of aircraft
transactions and rapid postal communication. The Canadian Bar
Association specifically made the following proposal for the considera-
tion of the Government of Canada :
“1. A Registrar and Deputy Registrar of aircraft titles would be
appointed to be the administrative heads of the registry.
2. All owners of aircraft and aircraft engines over 850 horsepower,
except state aircraft, could register their aircraft and engines
at the registry upon the submission of proof of ownership
satisfactory to the Registrar. The registration of aircraft
presently in Canada would not be compulsory, but the registra-
tion of all aircraft and engines over 850 horsepower of Canadian
manufacture for use in Canada and also those imported into
Canada would be compulsory. It is contemplated that nearly
all the aircraft presently in Canada would in time be registered
at the time of resale or finance. This would permit the Registry
to commence operation without having to initially register all
aircraft and engines presently in Canada. It is anticipated that
before an aircraft presently in Canada would be accepted for
registration, the Registrar would ensure that any encumbrance
that had been registered in accordance with provincial legisla-
tion would also be registered. The cost of the necessary searches
would be borne by the applicant for registration.
3. Any document purporting to transfer title, or to create a lien
or encumbrance on, or to lease for more than one year an
aircraft or engine over 850 horsepower, shall be null and void
as against any other person except the parties thereto unless
it is on a form prescribed by the regulations and completed in
a manner acceptable to the Registrar. This provision would
not be applicable to an aircraft or engine that had not been
registered in the Central Aircraft Registry.
4. The time and date of registration shall determine the priority
of two or more documents registered against the same aircraft
or engine.
5. Any person may upon payment of the prescribed fee be provided
with an abstract of title to any registered aircraft showing
all documents registered against the aircraft or engine and may
upon payment of a further fee be provided with a copy of all
documents appearing on the abstract of title.
McGILL LAW JOURNAL
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6. The legislation providing for the establishment of the registry
would be drafted in such form and terms to enable Canada
to ratify the Geneva Convention, 1948″.
The registry in operation could be quite simple. The interested
party would write to the registry requesting an abstract of title that
would show the registered owner and any liens or encumbrances or
leases. The fee for such an abstract would be nominal. Such searches
could also be initiated by telephone or telegraph with preliminary
advice being given by telephone or telegraph to be confirmed in due
course by the written abstract showing a clear title or otherwise.
Documents would be delivered to the registry by mail or personally
for inspection by the Registrar and registered if found to be in order.
Consideration could be given at a later date for the inclusion
of radio equipment and other component parts in the Central Aircraft
Registry. It is not contemplated that this equipment be included
initially. It may be worthwhile at a later date to consider the intro-
duction of enabling legislation or regulations to provide a standard
bill of sale, chattel mortgage, conditional sales contract, discharge
and any other form that may be deemed necessary. These standard
forms could be frameworks which would permit the addition of any
further clauses that may be necessary for the particular transaction.
A standard form would facilitate the work of the Registrar.
Federal Jurisdiction
The enactment of legislation by the Parliament of Canada to
provide for the creation of the proposed central registry for security
interests in aircraft would be intra vires the general power of
Parliament ” to make laws for the peace, order and good government
of Canada…” pursuant to Section 91 of the British North America
Act. The object of such legislation would be to make compulsory
the registration of security interests in aircraft in a public record to be
administered by the Department of Transport. The constitutional
cases to which reference is made below support the position that the
enactment of such legislation is within the jurisdiction of the Parlia-
ment of Canada.
In the case of Johanneson v. Rural Muniiaqpaity of West St. Pau,8
Rinfret C. J., affirmed the application of the decision of the Privy
Council in the Aeronautics case
3 [1952] 1 S.C.R. 292 at 302.
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
235
“Notwithstanding that the International Convention under consideration in
the Aeronautics case was denounced by the Government of Canada as of
April, 4, 1947, I entertain no doubt that the decision of the Judicial Com-
mittee is in its pith and substance that the whole field of aerial transporta-
tion comes under the jurisdiction of the Dominion Parliament. In the language
of their Lordships at p. 77: “Aerial navigation is a class of subject which
has attained such dimensions as to affect the body politic of the Dominion.”
Mr. Justice Kerwin 4 clearly set forth his views of the case in
the following terms :
It
“Now, even at the date of the Aeronautics case, the Judicial Committee was
influenced (i.e. in the determination of the main point) by the fact that in
their opinion the subject matter of air navigation was a matter of national
interest and importance and had attained such dimensions. …
is with
reference to this phase of the matter that Viscount Simon’s remarks in
A.-G. Ont. v. Canada Temperance Federation (1946), 2 D.L.R. at p. 5, A.C.
at p. 205, 85 Can. C.C. at pp. 229-80, must be read. What was there under
consideration was the Canada Temperance Act, originally enacted in 1878,
and Viscount Simon stated: ‘In their Lordship’ opinion, the true test must
be found in the real subject matter of the legislation: If it is such that it
goes beyond local or provincial concern or interests and must from its inherent
nature be the concern of the Dominion as a whole (as for example in the
Aeronautics Case… and the Radio Case…), then it will fall within the
competence of the Dominion Parliament as a matter affecting the peace,
order and good government of Canada, though it may in another aspect
touch upon matters specially reserved to the provincial legislatures.’ This
statement is significant because, while not stating that the Aeronautics case
was a decision on the point, it is a confirmation of the fact that the Board
in the Aeronautics case considered that the subject of aeronautics transcended
provincial legislative boundaries.”
Mr. Justice Kellock 5 emphasized the extent to which the jurisdic-
tion of Parliament prevailed in the Johanneson case :
“Once the decision is made that a matter is of a national interest and im-
portance, so as to fall within the peace, order and good government clause,
the provinces cease to have any legislative jurisdiction with regard thereto
and the Dominion jurisdiction is exclusive. If jurisdiction can be said to
exist in the Dominion with respect to any matter under such clause, that
statement can only be made because of the fact that such matters no longer
come within the classes of subject assigned to the provinces. I think, there-
fore, that as the matters attempted to be dealt with by the provincial legisla-
tion here in question are matters inseparable from the field of aerial naviga-
tion, the exclusive jurisdiction of Parliament extends thereto.”
Mr. Justice Estey 6 in the same report quoted with approval from
the Privy Council decision in the Aeronautics Case
4 [1952] 1 S.C.R. 292 at 308.
5 [1952] 1 S.C.R. 292 at 311-12.
6 [1952] 1 S.C.R. 292 at 317.
McGILL LAW JOURNAL
[Vol. 12
“… There may be a small portion of the field which is not by Virtue of
specific words in the B.N.A. Act vested in the Dominion; but neither is it
vested by specific words in the Provinces. As to such small portion it appears
to the Board that it must necessarily belong to the Dominion under its power
to make laws for the peace, order and good government of Canada. Further,
their Lordships are influenced by the facts that the subject of aerial naviga-
tion and the fulfilment of Canadian obligations under S.132 are matters of
national interest and importance; and that aerial navigation is a class of
subject which has attained such dimension as to affect the body politic of
the Dominion.”
In a decision of the British Columbia Court of Appeal in 1959, 7
the jurisdiction of the Parliament of Canada in the matter of aero-
nautics was again upheld. The appellant had submitted that the
Aeronautics Act and regulations enacted pursuant thereto were ultra
vires of the Parliament of Canada insofar as they presume to regulate
and control the operation of aircraft operating solely within a province.
Mr. Justice Coady 8 delivered the judgment of the court :
“It is clear that effect cannot be given to this submission. The jurisdiction
of the federal Parliament is concluded by the judgments in the following
cases: In re. Regulations and Control of Aeronautics in Canada; In re. By-
Law 292 West St. Paul R.M.; Johanneson v. West St. Paul R.M. It follows
therefore that the Act and the regulations in issue here are intra aires and
this submission of the appellant must be rejected.”
Certain railway cases through analogy may be cited in support
of the proposition that the Parliament of Canada possesses exclusive
jurisdiction over almost all aspects of civil aviation.
In the case of Attorney-General of Canada v. C.P.R. and C.N.R.,9
it was held :
” That Parliament, competent to provide for the acquisition of land for a
railway and to limit by conditions the extent of acquisition, cannot also
provide the reasonable means for insuring that limitation would, in the
particular circumstances, expose the substantive power to virtual nullifica-
tion. Powers in relation to matters normally within the provincial field,
especially of property and civil rights, are inseparable from a number of
the specific heads of S.91 under which scarcely a step could be taken that
did not involve them. In each case the question is primarily not how far
Parliament can trench on S.92, but rather to what extent are property and
civil rights within the scope of the paramount power of Parliament.”
Another relevant case is that of C.N.R. et al. and C.P.R. et al. V.
Attorney-General of Saskatchewan,10 in which the question arose as
7 Jorgenson V. Pool [1959] 28 W.W.R. 265, 124 Can. C.C. 39.
8 [1959] 28 W.W.R. 265 at 266.
9 [1958] 12 D.L.R. (2d) 625 at 627.
10 [1948] 1 D.L.R. 580 at 585.
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
237
to whether various Saskatchewan labour acts applied to interprovincial
In his judgment Macdonald, J. A. made the
railway companies.
following statement :
“For it must not be overlooked that a constitution is being construed, and
the expressions used should in my opinion receive a broad, liberal interpreta-
tion that will effectuate the intention of Parliament.”
“In this view the employees of the plaintiffs are under the exclusive legisla-
tive jurisdiction of the Parliament of Canada, and the provincial acts in
question cannot affect them.”
In a 1964 Exchequer Court of Canada decision,” the issue involved
the jurisdiction of the Government of Canada as regards its power
to expropriate and aeronautics. Mr. Justice Dumoulin discussed the
extent of federal jurisdiction in the following terms :
“Reverting here to the moot question initially raised: invalidity of the
Expropriation Act, the fundamental answer is that a Government shorn of
such a power would lack one of the essential attributes of sovereignty, one
pertaining to the furtherance of Peace, Order, and generally speaking, to
the good Government of the country (cf. B.N.A. Act, 1867, s. 91), and to its
Defence. This obvious principle does not call for more ample elaboration.
Basic legislation governing the taking of property and other rights is
found in s. 3, s-s. (b), sec. 2(g) of the Expropriation Act, and also in the
Aeronautics Act (R.S.C. 1952, chapter 2, s. 3, s.-s. (c).”
The cases referred to establish the jurisdiction of the Parliament
of Canada over almost all aspects of civil aviation.
Further authority with respect to the general power of Parliament
to legislate for the peace, order and good government of Canada is
found in Pronto Uranium Mines Ltd. and Algoma Uranium Mines Ltd.
v. Ontario Labour Relations Board, et al.13 This Ontario High Court
Judgment in 1956 concerned a question of whether the enactment of
the Atomic Energy Control Act, R.S.C. 1952, c.11, as amended, and
Regulations thereunder, was valid legislation for the peace, order
and good government of Canada. Mr. Justice McLennan 14 delivered
the judgment of the Court :
“In this day it cannot be said that the control of atomic energy is merely
of local or provincial concern, and in my opinion it is a matter which from
its inherent nature is of concern to the nation as a whole and the Act and
Regulations are within the powers of Parliament to make laws for the peace,
order and good government of Canada.
11 [1964] 1 Ex. C.R. 274, at 278; Shepherd v. The Queen.
13 [1956] 5 D.L.R. (2d) 342, [1956] O.R. 862.
14 [1956] 5 D.L.R. (2d) 342.
McGILL LAW JOURNAL
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If I am correct in this conclusion, then the production of the raw materials
for developing atomic energy is a work, undertaking or business within
the legislative authority of the Parliament of Canada, and Part I of the
Industrial Relations and Disputes Investigation Act applies in respect of
employees who are “employed upon or in connection with … [such] work,
undertaking or business.”
“To paraphrase the language of Rand, J. in Reference re Validity of Indus-
trial Relations and Disputes Investigation Act [1955], 3 D.L.R. 721 at
pp. 746-7, S.C.R. 529 at p. 554, it would be incompatible with the power of
Parliament to legislate with respect to the control of atomic energy for the
in the
peace, order and good government of Canada if labour relations
production of atomic energy did not lie within the regulation of Parliament.”
It is submitted that the constitutional cases to which reference
is made above are authority to establish that the Parliament of
Canada has exclusive jurisdiction to establish in Canada a central
registry to record title to and all encumbrances against aircraft and
aircraft engines.
The submission of the Canadian Bar Association emphasized that
the proposed legislation in no way changed the substantive laws
of the provinces and was, in fact, similar in principle to recording
laws in the provinces for other kinds of personal property and real
property. The legislation would merely provide that no conveyance
or instrument affecting title to an aircraft shall be valid until filed
for recordation, except as to parties to the instrument or those with
actual notice of its existence. Once an instrument is filed for re-
cordation under the legislation, all persons would be deemed to have
constructive notice of its existence and its effect on the title to the
aircraft involved. While recordation does afford notice to the world
of the existence of an instrument affecting title, it does not purport
to establish the substantive validity of the instrument. As in the
case of other recording systems, substantive validity of a recorded
instrument remains a question of local law i.e. the law of the provinces
would apply. 15 By substantive validity is meant compliance with those
basic legal requirements of the governing law which must be met
to constitute a valid conveyance as between two individuals. Among
these legal requirements are the statutes and court decisions pres-
cribing the content and form of such a conveyance, including the
15 Assuming the subject-matter of air transport to be within the authority of
Parliament, it follows, in the words of Viscount Simon in A.-G. Ont. v. Canada
Temperance Federation, [1946] A.C. 193 at p. 206: “Nor is the validity of the
legislation, when due to its inherent nature, affected because there may still be
room for enactments by a provincial legislature dealing with an aspect of the
same subject insofar as it specially affects that province.”
No. 3] NEED FOR A CENTRAL AIRCRAFT REGISTRY
239
adequacy of the description of the property conveyed, the legal
capacity of the parties to contract, questions of value, consideration,
good faith, fraud, misrepresentation, and other similar matters which
go to the transfer or creation as between the parties of a valid title
or interest in the property purported to be -transferred or created.
The substantive validity of the instrument of security would continue
to be determined by the appropriate laws of the province by which
such instrument is governed and no change in this situation would
result from the establishment by the Parliament of Canada of the
central registry or the requirement that the registration in future
of security interests in aircraft be compulsory.
Conclusion
Aviation will continue to be important to Canada both as a means
of transport and as a tool in developing otherwise inaccessible parts
of the country. The growth of aviation supports the proposal for the
establishment of the central registry and for the subsequent ratifica-
tion by Canada of the Geneval Convention. The present lack of such
a registry makes it impossible to sell aircraft and finance such sales
on a sound commercial basis. It is time for the Government of Canada
to take action and to substitute order and predictability in the matter
of aircraft titles for the uncertainties that now exist.
