McGILL LAW JOURNAL
REVUE DE DROIT DE McGILL
Volume 27
Montreal
1982
No. 2
Canadian Federal Courts and the Constitutional Limits
of Their Jurisdiction
Stephen A. Scott*
Synopsis
Introduction
I.
II.
The Consolidated Distilleries Cases: Legislative Jurisdiction over the
Subject-Matter as the Constitutional Test of Permissible Federal
Court Jurisdiction
The Quebec North Shore Paper Doctrine: The Constitutional
Requirement of an Elusive Substantive “Federal Law”
A. Can common
local pre-Confederation enactments,
“received” English statutes and Imperial statutes ever constitute
‘federal law”?
law,
B. Must the federal law give a complete right of action, or title to the
remedy sought, or power in the court to give it?
C. What is needed for an enactment by referential incorporation?
D. What is a “substantive” enactment?
III. What are Federal Courts, and whence. comes the Legislative
Authority to Constitute them?
Postscript: Rhine’s Case and Prytula’s Case
IV.
Appendix: Federal Causes of Action Act
* Of the Bar of the Province of Quebec and of the Faculty of Law, McGill University. This
article was originally prepared for delivery at New Directions in Maritime Law 1980, a
conference held at the Faculty of Law, Dalhousie University, 30-31 May 1980.
McGILL LA W JOURNAL
[Vol. 27
Introduction
Article 8 of the Rules of Oleron decrees as to general average: “The
master is bound to say to the merchants: ‘Signors, we cannot escape without
throwing out the wines and the goods.’ “I Later, it requires that the master
and a third of his crew, on coming ashore, must swear on the Gospels “that
he did it of no malice, but to save their lives, the ship, the goods, and the
wines.” Maritime law, these extracts seem to show, places wine in a category
by itself: on a par at least with all other cargo taken in the aggregate: and
perhaps even (since it specifies wine as one of four things to be saved) on an
equal footing with the ship itself and the crew. This proof of the traditional
good sense of the admiralty bar inspires my first foray into the complex and
important legal specialty which you practise. It also gives me much reason
for optimism as to the standard of conviviality which may be expected at
your conferences, and which may assist you in overlooking the deficiencies
of the non-initiate whom you very kindly invite to meet with you.
Indeed, a frank admission that (the term being on its face ambiguous) I
find it necessary every so often to check Scrutton on Charterparties to see
whether the “charterer” of a ship is its lessor or lessee, will, I hope, convince
you of the full extent of my diffidence at addressing this distinguished
gathering of practitioners and scholars of maritime law. Your invitation to
one so little acquainted with your specialty as I am, in itself testifies
eloquently to your concern with the grave constitutional problems afflicting
the jurisdiction of the Federal Court of Canada.
A day’s browsing in Gilmore and Black on The Law of Admiralty’, –
and especially its first chapter on History and Jurisdiction, – has dispelled
any notion I might have entertained that I could present to you to-day
anything like a working manual specifying exactly what proceedings a
maritime law practitioner can, consistently with the Canadian Supreme
Court’s reading of The British North America Act, 1867, bring in the Federal
Court of Canada, as the Canadian statute book now stands. Each type of
proceeding, or claim, will plainly require careful statutory analysis and
detailed historical consideration of authority, judicial and extrajudicial. But
I hope that the general reflections I offer here, and my review of the
authorities, can assist you in dealing with particular cases as they arise. I
hope, too, that the profession can succeed in persuading the Supreme Court
to reconsider, from first principles, its position on the constitutionally
permissible jurisdiction of Canadian federal courts: a position, I shall try to
show, adopted in error, upon inadequate consideration, and with the most
widely mischievous consequences for the administration of justice in
Canada.
I Quoted in G. Gilmore & C. Black, The Law of Admiralty, 2d ed. (1975), 244.
1982]
CANADIAN FEDERAL COURTS
That position, of course, as enunciated in 1976 and developed in later
cases, limits the exercise of Canadian federal court jurisdiction to the
administration of what, for the sake of brevity, I shall call “substantive
federal law”. Let me interject a few observations about terminology. The
Supreme Court of Canada has not, itself, in the context of its decisions on
constitutionally-permissible federal court jurisdiction, consecrated the term
“substantive federal law”. It has used these various terms: “applicable and
existing federal law”; “existing federal laws”; “existing and applicable federal
law”. A Canadian federal court (the Supreme Court holds) can,
constitutionally, exercise the “jurisdiction” Parliament purports to confer
upon it, if, but only if, such ‘federal” law exists. In short, a “federal” court
can administer only “federal” law.
How, then, as a matter of terminology, are we to designate the body of
law which a court, – any court, –
applies, in order to determine, on the
legal merits, the right of any claimant to be granted that which he claims? The
normal, and natural, word is “substantive” (in which concept I am prepared
to include as much, or as little, “procedural” law as may be thought
convenient). So (like other writers) I shall add the qualifying adjective
“substantive” and employ the composite term “substantive federal law”.
“Substantive federal law” seems to me to be a fair and accurate description of
what the Supreme Court has said the constitution requires in order that a
the judicial
Canadian federal court can,
jurisdiction Parliament has purported to confer.
lawfully, actually exercise
The contrast, in short, is between (1) ‘jurisdictional” rules, –
rules which
define the right, or power, to hear and determine a claim, – and (2)
“substantive” rules, or rules which govern the way in which that claim is to be
disposed of. The two being linked by s. 101 of the Act of 1867,- partly by
the very words of that section, partly by (I think)judicial construction, – we
must examine both (1) ‘jurisdictional” (or, if you prefer, “prima facie
jurisdictional”) rules, and (2) “substantive” rules, in order to dispose of the
that prove
jurisdictional
constitutionally possible) to the merits. But we must have two distinct terms
if we are to address the two distinct questions, (I) Has Parliamentpurported
to empower the federal court to hear and dispose of the claim in question?
and (2) Is there law in conjunction with which that purported “jurisdiction”
can operate, so as to permit, constitutionally, the exercise of the purported,
or prima facie, jurisdiction? Hence the term, “jurisdictional” for the rules
which purport to define power to hear and determine; “substantive” for the
rules which indicate the disposition of a claim on the merits.
issue, and before continuing on (should
My apologies for the use of what is, after all, normal terminology, must
seem obsessive. If so let me explain my anxiety. Though the Supreme Court
insists that, before federal judicial jurisdiction can be constitutionally
exercised, there must be both an adequate jurisdictional grant by some
REVUE DE DROIT DE McGILL
[Vol. 27
statute governing
the jurisdiction of the court, and also adequate
(substantive) federal law, we have begun to see what to me was, from the
beginning, a perfectly predictable phenomenon. Statutes which on theirface
do no more than purport to conferjurisdiction to hear and determine claims
are being read as enacting also the necessary “substantive” law federal law
governing the proper determination of such claims.2 This expedient, though
it will solve some problems, will create many others, not the least of which is
that it will tend to make Canadian statutory interpretation completely
haphazard and unpredictable. All the more, then, because a single provision
can be
as purporting,
simultaneously, to (1) confer a jurisdiction to hear a claim, and (2) create the
right to that which will be claimed, -all
the more, I say, is it necessary to
keep the two things conceptually distinct, and to ask, separately, whether
each has occurred, and how.
fairly, sometimes not, –
read, –
sometimes
Let us, then, consider, on principle and on authority, the position of
Canadian federal courts.
Canadian courts, -that
is, courts within the aggregate Canadian
constitutional system, -are normally arranged in a bipartite classification:
“federal courts” and “provincial courts”. A tripartite classification is
2 Ritchie J., giving the reasons for judgment of the Supreme Court of Canada in Antares
Shipping Corp. v. Ship Capricorn [1980] 1 S.C.R. 553, 559 said this of s. 22(2)(a) of the
Federal Court Act, R.S.C. 1970, Supp. II, c. 10: “With all respect, I am on the contrary of
opinion that the provisions of s. 22(2)(a) of the Act constitute existing federal statutory law
coming within the class of subject of navigation and shipping and expressly designed to
confer jurisdiction on the Federal Court for claims of the kind here advanced by the
appellant.” The claim. was for specific performance of an agreement to sell a ship and for
damages for breach of that agreement. On its face, s. 22(2)(a) is a grant of judicial
jurisdiction and not an enactment of substantive law. The treatment of s. 22(2), and its
enumeration of items or heads of judicial jurisdiction, as enactments of substantive law, is
explained by Le DainJ., in Skaarup Shipping Corp. v. Hawker Industries Ltd[ 1980] 2 F.C.
746 (C.A.) as enactments of substantive law by referential incorporation, under s. 42 of the
Federal Court Act. The Court was concerned with an action by shipowners against ship
repairers, seeking damages for breach of contract and tort in connection with the repair of a
ship; in so far as the claim was based on contract the issue was whether the Federal Court
could entertain the action under s. 22(2) (n) of the Federal Court Act, which deals with “any
claim arising out of a contract relating to the construction, repair or equipping of a ship”. Le
Dain J., speaking for the Court (Pratte, Heald and Le Dain JJ.), said: “Once a particular
claim is found to come within the terms of a head ofjurisdiction in section 22(2), there is, in
my opinion, necessarily substantive Canadian maritime law to support the claim. This
results from the terms of the definition of Canadian maritime law in section 2, and, in
particular, the words ‘or that would have been so administered if that Court had had, on its
Admiralty side, unlimited jurisdiction in relation to maritime and Admiralty matters’, and
from the fact that, because of the terms of section 22(1) of the Act (‘all cases in which a
claim for relief is made or a remedy is sought under or by virtue of Canadian maritime law’),
the specific claims set out in section 22(2) amount to a declaration by Parliament of claims
that are considered to be made under and governed by Canadian maritime law as defined by
section 2 and made part of the laws of Canada by section 42.”
1982]
CANADIAN FEDERAL COURTS
however possible, under which some few and (since the abolition of the
Privy Council appeal) unusual instances can be placed in a third category of
courts neither “federal” nor “provincial”. I shall say something more of these
unusual instances or special cases in due course, since they shed light on
important questions of principle.
“Provincial courts” are those created by the legislatures of the several
Canadian provinces under s. 92.14 of The British North America Act, 1867:
92.14The Administration of Justice in the Province, including the Constitution,
Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal
Jurisdiction, and including Procedure in Civil Matters in those Courts,
or continued by s. 129 of that Act under their authority:
129. Except as otherwise provided by this Act, all Laws in force in Canada, Nova
Scotia, or New Brunswick at the Union, and all Courts of Civil and Criminal
Jurisdiction, and all legal Commissions, Powers, and Authorities, and all Officers,
Judicial, Administrative, and Ministerial, existing therein at the Union, shall continue
in Ontario, Quebec, Nova Scotia, and New Brunswick respectively, as if the Union had
not been made; subject nevertheless (except with respect to such as are enacted by or
exist under Acts of the Parliament of Great Britain or of the Parliament of the United
Kingdom of Great Britain and Ireland,) to be repealed, abolished, or altered by the
Parliament of Canada, or by the Legislature of the respective Province, according to the
Authority of the Parliament or of that Legislature under this Act.
(The restriction as to pre-Confederation Imperial statutes was implicitly
removed by the Statute of Westminster, 1931.3)
What, then, of “federal” courts? Though the concept is capable of some
refinement, this working definition is simple enough and adequate for most
purposes: a Canadian “federal court” is simply a court created by, or under,
an Act of the Parliament of Canada. The federal legislative authority
3This is so despite the reservation contained in s. 7(1) of the Statute of Westminster, 1931,
22 Geo. V, c. 4 (U.K.). In British Coal Corporation v. The King [1935] A.C. 500,520 (P.C.)
Viscount Sankey refers to s. 129 of The British North America Act, 1867,30 & 31 Vict., c. 3
(U.K.), along with the Colonial Laws Validity Act, 1865, 28 & 29 Vict., c. 63 (U.K.), as
imposing “limitations” on the Dominion Parliament which were “abrogated by the Statute
[of Westminster]”. His Lordship then goes on to deal with s. 7 of the Statute of Westminster.
Again, in A.-G. Ontario v. A.-G. Canada [1947] A.C. 127, 146 (P.C.) (concerning the
abolition of appeals to the Privy Council), Lord Jowitt reviewed the position as it had been
before the Statute of Westminster and, having discussed the Colonial Laws Validity Act,
1865, noted that s. 129 of The British North America Act, 1867, “precluded any alteration of
Imperial Acts”. At the conclusion of hisjudgment for the Board, which upheld the Canadian
Parliament’s power to repeal the relevant pre-Confederation Imperial Acts-i.e., the
Judicial Committee Acts, 1833, 3 & 4 Wm. IV, c. 41; 1844, 7 & 8 Vict., c. 69 (U.K.)-his
Lordship discussed the effect of s. 7 of the Statute of Westminster. See the Supreme Court’s
decision in the same case, [1940] S.C.R. 49, 53 per Duff C.J.C., 100 per Davis J., 114 per
Kerwin J. See also Nanaimo Community Hotel v. Board of Referees [1945] 3 D.L.R. 225
(B.C.C.A.).
McGILL LA W JOURNAL
[Vol. 27
primarily relevant is, of course, s. 101 of The British North America Act,
1867:
101. The Parliament of Canada may, notwithstanding anything in this Act, from Time
to Time provide for the Constitution, Maintenance, and Organization of a General
Court of Appeal for Canada, and for the Establishment of anyadditional Courts for the
better Administration of the Laws of Canada.
But it is at least arguable that there are other pertinent sources of federal
legislative jurisdiction to create courts: the federal “residuary” power under
s. 91 of the Act of 1867; the particular grants of substantive legislative
authority in s. 91 and elsewhere in the Act of 1867 and its amendments; as
regards territory not forming part of any province, s. 4 of The British North
America Act, 1871; and possibly others as well. I shall consider these in due
course.
4
Lord Jowitt provides the most pithy summary of the general position:
It must be remembered that in the provincial courts the subject-matter of litigation may
arise as well under Dominion as under provincial legislation. The judicial and
legislative spheres are not coterminous, provincial courts determining all questions
except those for which a special court is set up under s. 101, whether the rights of the
parties spring from the common law or Dominion or provincial statutes.5
Perhaps it is as well to add Viscount Haldane’s reminder:
If the right exists, the presumption is that there is a Court which can enforce it, for if no
other mode of enforcing it is prescribed, thatalone is sufficient to givejurisdiction to the
King’s Courts ofjustice. In order to oust jurisdiction, it is necessary, in the absence of a
special law excluding it altogether, to plead that jurisdiction exists in some other
Court.6
The “King’s Courts of justice”, in this context, are primarily and in the
first instance the provincial courts, and, more particularly, the provincial
superior courts (in the absence of a competently-established provincial
inferior court properly invested-concurrently or exclusively- with the
pertinent jurisdiction).
Although the Supreme Court of Canada, the “General Court of Appeal
for Canada” contemplated in s. 101 of the Act of 1867, is a “federal court”
within my definition, I shall not deal at large with it. It must suffice to say
that the federal Parliament’s power to provide “from Time to Time” for the
“Constitution, Maintenance, and Organization” of this Court allows
Parliament to constitute a tribunal having exclusive and ultimate, appellate,
civil and criminal jurisdiction, with respect to such matters as Parliament
thinks fit, notwithstanding any contrary provincial laws.7 I cannot resist this
4 See infra, Part III.
5 A.-G. Ontario v. A.-G. Canada, supra, note 3, 151.
6 Board v. Board [1919] A.C. 956, 962-3 (P.C.), applied in Three Rivers Boatman Ltdv.
Conseil canadien des relations ouvrikres [1969] S.C.R. 607.
7 Crown Grain Co. v. Day [1908] A.C. 504; A.-G. Ontario v. A.-G. Canada, supra, note 3.
1982]
CANADIAN FEDERAL COURTS
opportunity, however, to point to those provisions of the Supreme Court
Act 8 which empower that Court to amend pleadings9 and receive further
evidence.’ 0 I wonder whether any of its judges have considered how these
provisions would stand, constitutionally, if dealt with on the same principles
which their Lordships find proper to be applied to other Canadian federal
courts. Any amendment, and any new evidence, must in strictness of law
issues, or claims, or basis of decision. But pure- appellate
alter the
jurisdiction, I submit, allows only the reconsideration of the case exactly as it
stood below. Anything beyond that is, strictly speaking, the exercise of
original, not appellate, jurisdiction, even when occurring incidentally to the
exercise of appellate jurisdiction. Of course powers of amendment; -powers
to take new evidence; – are very convenient. They save time and trouble for
everyone. They save much cost to litigants. They are now, I should think,
normal incidents of modem appellate courts. But can that matter? Do these
very considerations avail litigants in other federal courts, when they desire to
file counterclaims or third party claims, or claims amongst co-defendants,
not founded on substantive federal law (itself a restricted concept of obscure
extent)? These considerations do not (the Supreme Court holds) avail,
because no incidental jurisdiction can constitutionally be permitted.” If this
is true for one branch of s. 101, why not for both? I should gladly concede
this, however: the Supreme Court of Canada can be in no worse position
than any “Court for the better Administration of the Laws of Canada”. So
the Supreme Court of Canada can, constitutionally, amend pleadings, and
can, constitutionally, admit new evidence, – but only as pertains to claims
8R.S.C. 1970, c. S-19.
9 Sections 50, 51.
10 Section 67.
” See, generally, infra, Parts II and III. Even before Quebec North Shore Paper Co. v.
Canadian Pacific Ltd [1977] 2 S.C.R. 1054, the Privy Council and the Supreme Court had
shown unwillingness to allow incidental judicial jurisdiction on matters governed by laws
outside federal legislative authority. The new development imposed the further constraint
that there must also be federal substantive law. In R. v. Thomas Fuller Construction Co.
(1958) [1980] 1 S.C.R. 695, 712per Pigeon J.: “It must be considered that the basic principle
governing the Canadian system of judicature is the jurisdiction of the Superior Courts of the
Provinces in all matters federal and provincial. The federal Parliament is empowered to
derogate from this principle by establishing additional courts only for the better
administration of the laws of Canada. Such establishment [of jurisdiction to hear third-
party proceedings in the Federal Court of Canada, claiming relief under provincial
contributory negligence legislation] is not therefore necessary for the administration of these
laws. Consequently, I fail to see any basis for the application of the ancillary power doctrine
which is limited to what is truly necessary for the effective exercise of Parliament’s legislative
authority. If it is considered desirable to be able to take advantage of provincial legislation
on contributory negligence which is not meant to be exercised outside the courts of the
province, the proper solution is to make it possible to have those rights enforced in the
manner contemplated by the general rule of the Constitution of Canada, that is before the
Superior Court of the Province.”
REVUE DE DROIT DE McGILL
[Vol. 27
on substantive federal laws, and no further. I shall watch with interest the
progress of counsel who in the Supreme Court objects to amendments, or to
new evidence, on these grounds.
Let me close this introduction by returning, briefly, to the summer of
1976. I first heard by word of mouth of the Quebec North Shore Paper
decision, imposing upon Canadian federal courts, as a constitutional
condition of their jurisdiction, the existence of substantive federal law.
Shortly afterwards I read the judgment, and the following autumn talked
about it at dinner with a group of the maritime law bar. If I now give you
these first impressions, it is not to claim special prescience, but on the
contrary to argue that the problems to which the new doctrine has given rise
were largely foreseeable from the start, though I see no evidence in the law
reports that they were either foreseen or taken into account when the
doctrine was laid down. What is more, it seems to me that they are still not
fully understood. I leave you to judge how far my prognostications have
proved sound. They were these.
1. Even accepting the basic premise that purely provincial laws were not
“Laws of Canada”, and could not be enforced in Canadian federal courts,
there would be enormous confusion, much of it unnecessary, about what
were “Laws of Canada”.
(The Supreme Court, I had noticed, treated the action before it as if the
pertinent articles of the Civil Code were provincial statutory provisions. No
consideration was given to whether the case could be disposed of on the basis
that all the law necessary to create a cause of action was in truth “pre-
Confederation” law, continued by s. 129 of the Act of 1867 distributively’
under federal and provincial jurisdiction, according to their respective
legislative authorities. Yet the Court acknowledged that in some cases, at
least, the common law could be federal law. The obvious test cases seemed to
me ones where, on principle and authority, a common law rule, “received”
English statute, or pre-Confederation enactment, created a right, or a right
of action, which, on principle, a provincial legislature could not destroyi. The
first examples which occurred to me were connected with exclusive federal
legislative authority with respect to “Banking” and “Copyrights”: the right of
a depositor against a banker to recover the sum deposited; or the old
“common law” copyright in unpublished manuscripts. How could the laws
conferring these rights be said to be “provincial laws”? Yet the province can,
generally, legislate as to the contract of loan; and a bank deposit is a loan of
money.)
2. Great strain would be placed on the language of statutes. The courts
would have a strong inducement to find substantive law to have been created
whether the terms of an enactment admitted of it or not. Statutes on their
face doing no more than conferring jurisdiction to hear and determine claims
would probably be read as enacting substantive law as to the disposition of
1982]
CANADIAN FEDERAL COURTS
those claims. It might become a very serious problem to know any longer
when a statute created a right of action and when it did not. There would be
a grave cost in certainty and predictability of the law, and therefore in the
capacity of counsel to advise clients.
the legislature and the judiciary being engaged
in creating
3. Both
substantive law in order to “feed” or “nourish” (in Chief Justice Laskin’s
language) federal court jurisdiction, many questions would arise as to the
nature and scope and incidents of the causes of action thereby created
(questions for example as to evidence; limitations; scope of liability and
rights of contribution; uniformity as amongst provinces) and the extent of
supersession of other rights of action. The general interest of a legal system
being economy and simplicity, the new doctrine would on the contrary
encourage duplication and multiplicity of laws and rights of action.
4. There is no reason why Parliament should not enact substantive law
precisely in order to enable laws on matters within its jurisdiction to be
administered in its courts. Yet if it tried to do too much of it, some judges at
least would start having second thoughts, and begin to ask whether that was
not a colourable motive for enacting statutes! Suppose, for example, that
Parliament simply enacted that, every time it conferred jurisdiction on the
Federal Court of Canada, it should be understood as having simultaneously
enacted substantive law. How would the judges react to that? Suppose that it
tried this in a more sophisticated form, – creating phantom or sterile
“causes of action”, designed to be administered in federal courts, with no
inconvenient by-products. [See Appendix.] How would the courts react to
that?
5. The federal courts, and perhaps ultimately other courts (having to
consider how far laws administered by them were superseded), would be
burdened with a substantial volume of case law arising from the new
doctrine. The Supreme Court itself would probably feel itself obliged to give
leave to appeal in many of these cases especially if it disagreed with them.
Probably there would be at least a few “s. 101” cases in the Supreme Court of
Canada every year.
6. Litigation in the federal courts would become more costly and uncertain
than ever, both as to jurisdiction and as to merits. If the Supreme Court of
Canada will not retrace its footsteps we have (I believe) only seen the
beginning of this burgeoning field of litigation. Fresh expedients adopted
will produce not the expected cure but merely more difficulties. Patchwork
will not do; only outright repudiation of the new doctrine will provide
satisfactory results.
McGILL LAW JOURNAL
[Vol. 27
I. The Consolidated Distilleries Cases: Legislative Jurisdiction over the
Subject-Matter as the Constitutional Test of Permissible Federal
Judicial Jurisdiction.
Before 29 June 1976, when the Supreme Court of Canada rendered its
landmark decision in Quebec North Shore Paper Co. v. Canadian Pacific
Ltd12 the leading cases on the constitutional position of Canadian federal
courts were, of course, two arising from certain bonds given, in February
1924, by Consolidated Distilleries Ltd to the Crown in right of Canada.
In the principal actions, 3 the Crown sought judgment on the bonds
against Consolidated Distilleries.
In third-party proceedings, 4 Consolidated Distilleries sought judgment
against Consolidated Exporters Corp., under an alleged agreement whereby
the latter agreed to indemnify the former against any loss, damages or
expenses which the former might suffer or be put to by reason of these bonds.
The bonds had been given “in pursuance of the provisions of the Inland
Revenue Act’ 5 of Canada, “in respect of the export of certain spirits which
had, pursuant to… the said Act… been deposited in an excise bonding
warehouse…, and on which, accordingly, no excise duty had been paid”.’ 6
The spirits were removed from the warehouse for export. The bonds were
accordingly given to ensure that export actually took place: indeed they were
given in penal sums equal to twice the duty payable.
In the principal actions, the Privy Council 7 agreed with the Supreme
Court of Canada 18 and the Exchequer Court of Canada 9 that the Exchequer
Court of Canada had, on the true construction of its governing federal
statute,20 judicial jurisdiction to hear and determine the Crown’s claim; and
also that the Parliament of Canada had the legislative authority to empower
12Ibid.
13 Consolidated Distilleries Ltd v. The King [1933] A.C. 508 (P.C.), rev’g (sub nom.
Consolidated Distilleries Ltd and Hume v. The King; Consolidated Distilleries Ltd and
Smith v. The King) [1932] S.C.R. 419, affg The King v. Consolidated Distilleries Ltd[1931]
Ex. C.R. 85. A proceeding concerning a stay of execution is reported at [1931] Ex. C.R. 125.
14 The King v. Hume; Consolidated Distilleries Ltd v. Consolidated Exporters Corp.
[1930] S.C.R. 531, affg (sub. nom. The King v. Consolidated Distilleries Ltd and
Consolidated Exporters Corp.) [1929] Ex. C.R. 101.
‘5 R.S.C. 1906, c. 51.
16The words are those of Lord Russell in Consolidated Distilleries Ltd v. The King,
supra, note 13, 512. The phrase “in pursuance of” may be noted. The bonds were given to
comply with requirements of the Act; but it is not said that theAct created the right of action
upon the bonds.
17 Consolidated Distilleries Ltd v. The King, supra, note 13.
i8 Consolidated Distilleries Ltd and Hume v. The King; Consolidated Distilleries Ltd and
Smith v. The King, supra, note 13.
19 The King v. Consolidated Distilleries Ltd, supra, note 13.
20Exchequer Court Act, R.S.C. 1927, c. 34, s. 30.
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CANADIAN FEDERAL COURTS
the Exchequer Court to do so. It may be remarked that, in the result, the
Privy Council reversed the judgment of the Supreme Court of Canada, as it
found, on the merits, that, for reasons not now material (but amounting in
substance to the fact that the spirits had indeed been exported, even if not in
accordance with the undertaking as to destination, and the bond in fact
cancelled) no liability to the Crown existed.
In the third-party proceedings, on the other hand, the Supreme Court of
Canada 2′ agreed with the Exchequer Court of Canada 22 in construing in the
light of the legislative authority of Parliament the Exchequer Court rules
providing for the impleading of third persons: and in concluding, on that
basis, that the Exchequer Court of Canada had not judicial jurisdiction to
the claim by Consolidated Distilleries against
hear and determine
Consolidated Exporters. This proceeding was accordingly dismissed.
In defining the judicial jurisdiction constitutionally exercisable by the
Exchequer Court of Canada under s. 30(d) of the Exchequer Court Act 23
then in force, Lord Russell of Killowen, who spoke for their Lordships in the
principal action, Consolidated Distilleries Ltd v. The King,24 employed the
phrase for which the case has become known: “some subject-matter,
legislation in regard to which is within the legislative competence of the
Dominion”.25 The literal meaning of this phrase gives no difficulty, and it
seems easy enough to show that it was intended to mean exactly what it says.
First let me quote s. 30 in full:
30. The Exchequer Court shall have and possess concurrent original jurisdiction in
Canada
(a)
in all cases relating to the revenue in which it is sought to enforce any law of
Canada, including actions, suits and proceedings by way of information to enforce
penalties and proceedings by way of informtion in rem, and as well in qui tam suits
for penalties or forfeiture as where the suit is on behalf of the Crown alone;
in all cases in which it is sought at the instance of the Attorney General of Canada,
to impeach or annul any patent of invention, or any patent, lease or other
instrument respecting lands;
in all cases in which demand is made or relief sought against any officer of the
Crown for anything done or omitted to be done in the performance of his duty as
such officer; and
in all other actions and suits of a civil nature at common law or equity in which the
Crown is plaintiff or petitioner.
(b)
(c)
(d)
21 The King v. Hume; Consolidated Distilleries Ltd v. Consolidated Exporters Corp.,
supra, note 14.
note 14.
22 The King v. Consolidated Distilleries Ltd and Consolidated Exporters Corp., supra,
2R.S.C. 1927, c. 34.
24 Supra, note 13.
25 Ibid., 522.
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[Vol. 27
The following propositions are laid down in black and white by Lord
Russell of Killowen. Indeed I construct them almost exclusively of
quotations, simply taking excerpts and arranging them in a convenient
order.
1. These were “actions to enforce the liability on bonds executed in favour of
the Crown in pursuance of a revenue law enacted by the Parliament of
Canada.” 26
2. “It was conceded by the appellants (and rightly, as their Lordships think)
in the argument before the Board, that the Parliament of Canada could,
in exercising the power conferred by s. 101 [of the Act of 1867], properly
confer upon the Exchequer Court jurisdiction to hear and determine 27
such actions.
26 Ibid., 520. The description of the proceedings as being in pursuance of the federal
statute seems carefully-chosen and recurs in the judgment of the Privy Council and in those
of the courts below. Thus Lord Russell, supra, note 16 and accompanying text, uses it in his
opening statement of the facts. In the Supreme Court of Canada, Duff J., speaking for the
bench of only four judges who participated in the judgment, uses the similar phrase
“obligation contracted pursuant to the provisions of a statute of that Parliament or of a
regulation having the force of statute”, supra, note 13, 422[emphasis added]. MacLean J., in
the Exchequer Court of Canada, supra, note 13, 88 had said that “the subject matter of this
action arises directly from legislation enacted by the Parliament of Canada in respect of
Excise’.
27 Ibid., 520. In the Supreme Court of Canada, Duff J., speaking for himself, Rinfret and
Lamont JJ., said, supra, note 13, 422: “I find no difficulty in holding that the Parliament of
Canada is capable, in virtue of the powers vested in it by section 101 of the British North
America Act, of endowing the Exchequer Court with authority to entertain such actions as
these. I do not doubt that ‘the better administration of the laws of Canada’, embraces, upon
a fair construction of the words, such a matter as the enforcement of an obligation
contracted pursuant to the provisions of a statute of that Parliament or of a regulation
having the force of statute. I do not think the point is susceptible of elaborate argument, and
I leave it there.”
Anglin C.J.C., who agreed (though he dissented as to cross appeals concerning the trial
judge’s refusal of interest), wrote, supra, note 13, 421: “I never entertained any doubt
whatever as to the jurisdiction of the Exchequer Court in these cases to hear these appeals. If
authority to hear and determine such claims as these is not something which it is competent
for the Dominion, under s. 101 of the British North America Act, to confer upon a court
created by it for “the better administration of the law of Canada”, I would find it very
difficult to conceive what that clause in the B.N.A. Act was intended to convey.”
In the Exchequer Court of Canada at trial, Maclean J. had held, supra, note 13, 88-9:
“There can be no doubt but that the Parliament of Canada had jurisdiction to legislate in
respect of Customs and Excise, and the subject-matter of this action directly arises from
legislation enacted by the Parliament of Canada in respect of Excise”. After distinguishing the
decision of the Supreme Court of Canada in the third-party proceedings, Maclean J.
continued: “There can be no question as to the competency of the Parliament of Canada to
legislate in respect of the subject of Excise, and I do not think there is any doubt as to the
jurisdiction of this court in any proceedings arising under the Excise Act. In this particular
matter the bonds sued upon were required by a law enacted by the Parliament of Canada in
respect of a matter in which it had undoubtedjurisdiction. In my opinion, the judgment of the
Supreme Court of Canada is, without qualification whatever, against the contention of the
defendants.”
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3. “The point as to jurisdiction accordingly resolves itself into the question
whether the language of the Exchequer Court Act upon its- true
interpretation purports to confer the necessary jurisdiction. 28 “Each case
as it arises must be determined in relation to its own facts and
circumstances.” 29
4. “In regard to the present case their Locdships appreciate that a difficulty
may exist in regard to sub-s. (a). While these actions are no doubt ‘cases
relating to the revenue,’ it might perhaps be said that no law of Canada is
sought to be enforced in them.” 30
5. “Their Lordships, however, have come to the conclusion that these
actions do fall within sub-s. (d)…. They think that in view of the provision
of the three preceding subsections the actions and suits in sub-s. (d) must
be confined to actions and suits in relation to some subject-matter,
legislation in regard to which is within the legislative competence of the
Dominion. So read, the sub-section could not be said to be ultra vires,
and the present actions appear to their Lordships to fall within its
scope.” 31
6. “The Exchequer Court accordingly had jurisdiction in the matter of these
actions.” 32
I draw your attention most particularly to the reasons given by Lord
Russell of Killowen for refusing to rely on sub-section (a) as the basis of the
Exchequer Court’s jurisdiction over these proceedings. There was (Lord
responding to counsel, who had argued the point) doubt
Russell said -so
that any law of Canada was being enforced in the actions. Therefore his
Lordship relied on sub-section (d), because the suit (which was on its face a
suit “of a civil nature at common law in which the Crown is plaintiff”) related
28Supra, note 13, 520.
29 Ibid., 521. This statement directly follows their Lordships’ reservation that they are
anxious to avoid expressing any general views upon the extent of thejurisdiction conferred
by s. 30 of the Exchequer Act, beyond what is necessary for the decision of this particular
case.
30 Ibid., 511 per Lord Russell, rejecting counsel’s argument: “the bonds having been given
in compliance with a law of Canada, actions to enforce them were actions to enforce that
law.” See also the passages quoted, infra, note 31.
31 Ibid., 521-2. In the Supreme Court of Canada, DuffJ. had said, supra, note 13,422: “As
to the jurisdiction of the Exchequer Court, in so far as that depends upon the construction of
the Exchequer Court Act, something might be said for the view that these cases are not
within the class of cases contemplated by subsection A of section 30; but that is immaterial
because they are plainly within subsection D.”
Anglin C.J.C. had said, supra, note 13, 421: “That the Dominion Parliament intended to
confer such jurisdiction on the Exchequer Court, in my opinion, is clear beyond argument,
the case probably falling within clause (a); but, if not, it certainly is clearly within clause (d) of
s. 30 of the Exchequer Court Act.”
32 Ibid., 522.
Mc GILL LAW JO URNA L
[Vol. 27
to “some subject-matter, legislation in regard to which is within the
legislative competence of the Dominion.” So read, Lord Russell insisted, the
sub-section could not be said to be ultra vires. In other words, on the terms
of sub-section (d), – by contrast with sub-section (a), – enforcement of any
“laws of Canada”, –
let alone federal statute law, – was utterly irrelevant.
But sub-section (d) was no less constitutionally valid on that account.
Whether the Privy Council was right or wrong may of course quite
legitimately be debated. What their Lordships actually did decide admits of
little discussion, particularly when the report of argument is read. Their
Lordships upheld the constitutional validity of the power given by federal
statute to a Canadian federal court to hear and determine an action at
common law on a bond given to the federal Crown pursuant to federal
statute.
It is, in my view, idle to deny that the Privy Council’s actual ground of
decision in Consolidated Distilleries Ltd v. The King33 was that the subject-
matter of the litigation was within federal legislative jurisdiction -the
presence or absence of substantive federal law being held irrelevant. Nor can
anything, save confusion, be gained by trying to explain away that case on its
facts. Better, if need be, to overrule it frankly. Certainly the language of the
pertinent statutory provisions, as they were collected and quoted by their
Lordships from the Inland Revenue Act and Regulations, affords no
plausible basis for finding a federal statutory cause of action on the bonds.
Whether or not, under the Quebec North Shore Paper doctrine, a common
law cause of action can ever suffice: and whether, if it can, the circumstances
of the Consolidated Distilleries case did and do provide an instance where a
common-law cause of action indeed suffices for recovery in a federal
court, -these
are difficult questions which I shall address in due course. I
would only note now that, about six months after Quebec North Shore
Paper,34 the Supreme Court of Canada, dealing with a construction bond in
McNamara Construction (Western) Ltd v. The Queen,35 reaffirmed the
Privy Council’s result in Consolidated Distilleries as correct, though
distinguishing and explaining it in a way that I find, in all honesty, –
I am
not using a pejorative epithet,- unintelligible -seeming
however to stop
short of asserting that in the earlier case there had been a federal statutory
cause of action.36 But in law, as in life, one cannot have one’s spirits and drink
them too.
33 Ibid., 508.
34 Supra, note 12.
35[1977] 2 S.C.R. 654, rev’g [1976] 2 F.C. 292 (C.A.).
36The explanation of Consolidated Distilleries, and the distinction drawn between the
circumstances of that case and those in McNamara Construction may be found, ibid., 633
per Laskin C.J.C.
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Before leaving the Privy Council’s disposition of the principal actions in
Consolidated Distilleries, I would remark upon the caution exercised,
through Lord Russell, by their Lordships, who declared themselves to be
“anxious to avoid expressing any general views upon the extent of the
jurisdiction conferred by s. 30, beyond what is necessary for the decision of
this particular case.”37 Their Lordships’ construction of sub-section (d) of
s. 30, confining it, in the context of the three preceding subsections, to
“actions and suits in relation to some subject-matter, legislation in regard to
which is within the legislative competence of the Dominion”,38 of course
leaves open the possibility that there could be such a thing as a Crown suit
involving a subject-matter outside federal legislative authority, and as to
which the jurisdiction of the federal court would be open to question both on
statutory and constitutional grounds.
It does seem to me, and the point was taken in argument before the Privy
Council,39 that all rights of action by the Crown in right of Canada are
necessarily “Public… Property” within the meaning of item no. 1 A (formerly
item no. 1) of s. 91 of The British North America Act, 1867:40 since a
proprietary right, and the totality of the remedies to which it gives rise, are
correlative. 41 If this is so, the Parliament of Canada would always have
legislative authority with respect to all the Crown’s legal remedies, since they
would be “Public… Property” and so subject to its legislative authority.
Possibly the Privy Council wished to leave this open. Possibly, too, since the
Parliament of Canada, being restricted in its legislative authority, cannot
simply create in favour of the federal Crown any legal rights and remedies it
pleases, the Privy Council did not wish to broach the problems created by
proceedings which might be brought by the federal Crown in a federal Court
to enforce statutory provisions which proved to be ultra vires.42 In such
37 Supra, note 13, 521.
38 Ibid., 522.
39 See the argument for the Crown, ibid., 511 per Rowell, K.C., Frank Gahan, and
Plaxton, K.C. (who are mistakenly described as appearing for the”appellants”): “The bonds
being the property of the Dominion, the Dominion had exclusive power to legislate as to the
method of enforcing them: Burrard Power Co. v. The King, [1911] A.C. 87 (P.C.).” Tilley,
K.C., for the appellants, replied, ibid., 512: “The legislative power of the Dominion under
s. 91, head 1, of The British North America Act, 1867, with regard to ‘the public debt and
property’ does not extend to all property which it may acquire.”
40″The Public Debt and Property”, which appeared as item no. “I” in The British North
America Act, 1867, was renumbered “IA” by the British North America (No. 2) Act, 1949,
13 Geo. VI, c. 81 (U.K.), which added a new item or head, numbered “I”.
41 Ashby v. White (1704) 2 Ld. Raym. 938, (1702) 3 Ld. Raym. 320 (pleadings), 92 E.R.
126, 92 E.R. 710 (Q.B.); rev’d(1705) I Bro. P.C. 62, 1 E.R. 417 (H.L.). See also Ashbyv.
White (1704-05) 14 How. St. Tr. 695 (H. Com., H.L., Q.B.).
42 What, for example, was the effect of the dismissal by the Supreme Court of Canada of
in MacDonald v. Vapor Canada Ltd [1977] 2 S.C.R. 134? After a
the proceedings
statement of the nature of the proceedings, Laskin C.J.C., speaking for the Court, takes the
point about the jurisdiction of the Federal Court, and says at p. 139: “It is trite law that the
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[Vol. 27
cases, it might be that a very strict (if perhaps purist and even pedantic)
reading of s. 101 of the Act of 1867 would require that the proceedings be
dismissed, not on the merits, but for want of judicial jurisdiction to entertain
them at all! We can only speculate as to its reasons; but the Privy Council
stopped short of affirming, tout court, the constitutional validity of sub-
section (d) of s. 30 of the then Exchequer Court Act. Instead it affirmed its
validity with the qualification about legislative vires over the subject-matter
of the litigation.
Taken by itself, the Privy Council’s decision on the principal actions in
Consolidated Distilleries, whilst affirming that Parliament could create
courts to hear and determine “actions and suits in relation to some subject-
matter, legislation in regard to which is within the legislative competence of
the Dominion”,43 would not have established that Parliament could never go
any further. In the Board of Commerce Case,44 the Privy Council had held
ultra vires federal statutes creating a “Board of Commerce” with far reaching
powers to control trading. These statutes were held outside federal
legislative authority arising under the “residuary” power, as well as outside
the federal powers to regulate trade and commerce and to enact criminal law
(ss. 91.2 and 91.27 of the Act of 1867). This being once decided, s. 101 could
obviously avail nothing; and Lord Haldane, for the Board, said:
For analogous reasons their Lordships think that s. 101 of the British North America
Act, which enables the Parliament of Canada, notwithstanding anything in the Act, to
provide for the establishment of any additional Courts for the better administration of
the laws of Canada, cannot be read as enabling that Parliament to trench on Provincial
rights, such as the powers over property and civil rights in the Provinces exclusively
conferred on their Legislatures. Full significance can be attached to the words in
question without reading them as implying such capacity on the part of the Dominion
Parliament. It is essential in such cases that the new judicial establishment should be a
means to some end competent to the latter.45
These observations plainly show that Parliament has not unrestricted
authority, under s. 101 of the Act of 1867, to establish courts of any and every
kind. But they do not carry the matter very far. In particular, they give no
guidance as to how far, when Parliament does create a bonafide “judicial
establishment [as] a means to some end competent to the latter”, it may
Federal Court, being a Court established pursuant to s. 101 aforesaid ‘for the better
administration of the laws of Canada’, can only be endowed with such jurisdiction as flows
from laws competently enacted by Parliament.” His Lordship then points out that the
question of the validity of the impugned provisions would arise, at p. 140: “even if it were the
provincial superior Courts that were charged with enforcement of the substantive
provisions…. Legislation sought to be enforced in provincial Courts must, of course, be
legislation which it was competent for the enacting Legislature to pass”. The case then
proceeds with consideration of the construction and validity of the substantive provisions.
43Supra, note 13, 522.
“[1922] 1 A.C. 191 (P.C.).
45Ibid., 199.
1982]
CANADIAN FEDERAL COURTS
confer incidental jurisdiction, such as jurisdiction to hear and determine
pertinent counterclaims, issues amongst co-defendants, and claims against
third persons.
Before Quebec North Shore Paper, then, by what authority could it be
said that Parliament was constitutionally excluded from confiding to federal
courts the exercise, even incidentally to the disposition of litigation properly
before them, of jurisdiction over proceedings founded on laws lying under
exclusive provincial legislative authority?
in the third-party proceedings
The authority, such as it was, consisted essentially of the Supreme
Court’s decision
in the Consolidated
Distilleries case. In The King v. Hume; Consolidated Distilleries Ltd v.
Consolidated Exporters Corp.,46 decided about two years before it dealt with
the principal actions, the Supreme Court of Canada affirmed a judgment of
the Exchequer Court,47 dismissing third-party proceedings by Consolidated
Distilleries Ltd against Consolidated Exporters Corp.; the former claiming,
in virtue of an alleged contractual agreement, indemnity from the latter
against the Crown’s claim.
Undeniably the third party proceedings were dismissed by the Supreme
Court on constitutional grounds. But s. 101 was applied to the construction
of the Exchequer Court rules which allowed third parties to be impleaded;
and where constitutional limitations are adduced in aid of construction, the
resulting decision is not always treated as a conclusive precedent on the
matter of vires.48
Still, the third-party proceedings were dismissed on the basis of the
constitutional limitations upon Parliament’s power under s. 101 of The
British North America Act, 1867, and I am not concerned to quibble about
the status of the decision as a precedent. Anglin C.J.C. spoke for a majority
of the Supreme Court of Canada, consisting of himself and Rinfret, Lamont,
and Cannon JJ.; Newcombe J. dissented vigorously. The Chief Justice’s
reasons were these: I quote them fully because so much is made to turn on
them:
In construing the rules of the Exchequer Court, however, attention must always be paid
to s. 101 of the British North America Act (1867), which authorized the creation of that
Court, and to the terms in which Parliament has conferred jurisdiction on it. It is not
conceivable that, by mere rule of court, it should have been intended to enlarge the
jurisdiction thus conferred, so as to embrace matters which it would not be otherwise
competent for that Court to hear and determine. S. 101 of the British North America
Act reads as follows:
46 Supra, note 14.
47 The King v. Consolidated Distilleries Ltd and Consolidated Exporters Corp., supra,
note 14.
48See, e.g., Gregory & Co. v. The Quebec Securities Commission [1961] S.C.R. 584; it is
not clear that this necessarily depends on non-compliance with requirements to give notice
of constitutional questions.
Mc GILL LA W JOURNAL
[Vol. 27
The Parliament of Canada may, notwithstanding anything in this Act, from time
to time, provide for the constitution, maintenance, and organization of a general
court of appeal for Canada, and for the establishment of any additional courts for
the better administration of the laws of Canada.
It is to be observed that the “additional courts”, which Parliament is hereby authorized
to establish, are courts “for the better administration of the laws of Canada.” In the
collocation in which they are found, and having regard to the other provisions of the
British North America Act, the words, “the laws of Canada,” must signify laws enacted
by the Dominion Parliament and within its competence. If they should be taken to
mean laws in force anywhere in Canada, which is the alternative suggested, s. 101 would
be wide enough to conferjurisdiction on Parliament to create courts empowered to deal
with the whole range of matters within the exclusive jurisdiction of the provincial
legislatures, including “property and civil rights” in the provinces, although, by s. 91(14)
of the British North America Act,
The administration of justice in the province, including
the constitution,
maintenance, and organization of provincial courts, both of civil and of criminal
jurisdiction, and including procedure in civil matters in those courts
is part of the jurisdiction conferred exclusively upon the provincial legislatures. 49
After quoting s. 30 of the Exchequer Court Act (which, the Chief Justice
asserts “outlines [the Exchequer Court’s] general jurisdiction”, and as to the
validity of which, it may be remarked, he suggests no doubt) his Lordship
continues:
While there can be no doubt that the powers of Parliament under s. 101 are of an
overriding character, when the matter dealt with is within the legislative jurisdiction of
the Parliament of Canada, it seems equally clear that they do not enable it to set up a
court competent to deal with matters purely of civil right as between subject and
subject. While the law, under which the defendant in the present instance seeks to
impose a liability on the third party to indemnify it by virtue of a contract between
them, is a law of Canada in the sense that it is in force in Canada, it is not a law of
Canada in the sense that it would be competent for the Parliament of Canada to enact,
modify or amend it. The matter is purely one of exclusive provincial jurisdiction,
concerning, as it does, a civil right in some one of the provinces (s. 92(13)).
It would, therefore, in our opinion, be beyond the power of Parliament to legislate
directly for the enforcement of such a right in the Exchequer Court of Canada, as
between subject and subject, and it seems reasonably clear that Parliament has made no
attempt to do so. What Parliament cannot do directly, by way of conferring
jurisdiction upon the Exchequer Court, that court cannot itself do by virtue of any rule
it may pass. It follows that, even if, exfacie, rule 262 of the Exchequer Court might be
broad enough to include a third party procedure in a case such as that now before us, it
cannot have been intended to have any such effect, since so to construe it would be to
attribute to the Exchequer Court an intention, by its rules, to confer upon itself a
jurisdiction which it would transcend the power of Parliament to give to it.
On this short ground the present appeal should be dismissed.
While it might conceivably be convenient in some cases to have the Exchequer Court
exercise, by way of third party procedure, a jurisdiction such as that here invoked, it
certainly cannot be said that it is “necessarily incidental” [City of Montrealv. Montreal
49Supra, note 14, 534-5.
1982]
CANADIAN FEDERAL COURTS
Street Railway [1912] A.C. 333, 344-6 (P.C.)] to the exercise by that court of the
jurisdiction conferred upon it by Parliament, that it should possess power to deal with
such matters, even where they arise out of the disposition of cases within its jurisdiction.
On the other hand, in many cases, and not at all improbably in the present case, it would
be highly inconvenient that the Crown should be delayed in its recovery against the
defendant liable to it while that defendant litigated with the third party a claim-
possibly very contentious-
What, then, does the Supreme Court decide on the third-party
proceedings? I urge you to examine the Chief Justice’s words with the utmost
care. He begins by speaking in terms of two categories.
to be indemnified by it.50
Anglin C.J.C. contrasts (1) “laws enacted by the Dominion Parliament
and within its competence” with (2) “[laws on] the whole range of matters
within the exclusive jurisdiction of the provincial legislatures” [emphasis
added]. The obscurity of this passage comes chiefly from the ambiguity of
the word “and”: is it, here, conjunctive or disjunctive?
Matters (or laws on matters) within exclusive, or concurrent, federal
legislative authority are obviously, – are by hypothesis, – not in the latter
of two contrasted categories. For that which is federal cannot be exclusively
provincial. So laws on matters within exclusive or concurrent federal
authority must either fall into the former of Chief Justice Anglin’s two
categories, or else they are not contemplated at allin the passage making this
contrast. The first hypothesis seems more plausible if not demonstrable.
But when his Lordship goes on to speak of “a law of Canada in the sense
that it would be competent for the Parliament of Canada to enact, modify or
amend it”, the meaning of the Court’s judgment becomes much clearer. The
phrase “Laws of Canada” in s. 101 of the Act of 1867 must then, apart from
federal statutory enactments, embrace at least such “pre-Confederation”
laws as are continued, by s. 129 of the Act of 1867, under exclusive, or even
concurrent, federal legislative authority. The word “and”, in the first of the
two contrasted categories, must then be disjunctive.5′ “And” means that the
two classes are added: laws enacted by the Dominion Parliament and [laws
within] its competence. Alternatively, Anglin C.J.C. has simply restated his
criterion in wider terms, making “power to amend” the test of what is a law of
Canada.
The difference between the criterion laid down by the Privy Council in
1933, and that laid down by the Supreme Court in 1932 would then come to
this. The Privy Council holds that Parliament can empower Canadian
federal courts to hear and determine actions and suits “in relation to some
subject-matter, legislation in regard to which is within the legislative
competence of the Dominion”. The Supreme Court holds at least that
5 Ibid., 535-6.
51 “Or”, a word which can present similar difficulties, would perhaps have been more
suitable here.
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(Vol. 27
Parliament can empower Canadian federal courts to hear and determine
actions and suits founded upon “a law of Canada in the sense that it would be
competent for the Parliament of Canada to enact, modify or amend it”. It is
possible to interpret these two definitions in such a way that they are not
precisely co-extensive, but I do not think that exegesis of the opinions can
clarify the matter much further. If stress is laid on Anglin C.J.C.’s phrase
denying that “Laws of Canada” under s. 101 cover “the whole range of
matters within the exclusive jurisdiction of the provincial legislatures”
[emphasis added], the two definitions can be understood as covering more or
less the same ground.
On the assumption that “Laws of Canada” under s. 101 of the Act of
1867, whatever they include, do not include laws relied on in actions or suits
outside the Privy Council’s criterion, –
i.e., actions and suits in relation to
some subject-matter, legislation in regard to which is not within the
legislative competence of the Dominion, the following must be considered
for possible inclusion.
Each of the following categories is defined as including any rule or body
of rules, which expressly or impliedly, referentially or otherwise, is
incorporated therein or enacted or given force of law thereby; and, where
applicable, the old laws of New France can be treated as falling into
categories 2, 3 and 4:
1. Canadian federal statutory enactments
Acts of the Parliament of Canada and enactments competently made
thereunder.
2. Common law continued under federal legislative authority
Rules of the common law (including those of equity), insofar as these are,
by s. 129 of the Act of 1867, continued under federal legislative authority,
exclusive or concurrent.
3. Local pre-Confederation enactments continued under federal legislative
authority
Pre-Confederation statutory enactments of the predecessor provinces or
territories, insofar as these were, by s. 129 of the Act of 1867, continued
under federal legislative authority, exclusive or concurrent.
4. “Received” “English” statutes continued under federal legislative
authority
Statutory enactments of England, of Great Britain, or of the United
Kingdom, in force in Canada, not proprio vigore as exercises of the
supreme, Imperial, legislative power, but only “received” in virtue Qf
common law rules or statutory enactments (normally as part of the
corpus of “English law” in force) and subject to repeal or amendment by
local or “colonial” legislatures: –
the said
insofar as
the whole
1982]
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enactments were, by s. 129 of the Act of 1867, continued subject to federal
legislative authority, exclusive or concurrent.
5. Imperial statutes subject to federal legislative authority
Statutory enactments of England, of Great Britain, or of the United
Kingdom, in force in Canada proprio vigore, that is to say as direct
exercises of the authority of the “Imperial” Parliament, but which the
Parliament of Canada now has (or at some material time had) authority,
exclusive or concurrent with that of the Provinces, to amend, repeal or
alter by unilateral federal statute; such enactments being of two possible
classes:
(i) those enacted before Confederation, and accordingly contemplated
by the words in parentheses in s. 129; and
(ii) those enacted since Confederation.
6. Provincial enactments applying to matters within federal legislative
authority
Enactments of the legislatures of the Canadian provinces or made under
their authority, insofar as they apply to matters under exclusive or
concurrent federal legislative authority, (that is, save as the Parliament of
Canada, in virtue of any exclusive or concurrent legislative power,
provides otherwise).
There is a seventh category that I would include within “Laws of
Canada” under s. 101 of the Act of 1867, but which requires that this phrase
be read as covering at least every law in the Canadian constitutional system
which is not a law of a province (in the sense of a law which a province can
amend, repeal, or alter):
7. Imperial statutes and other rules of law subject to neither unilateral
federal nor unilateral provincial legislative authority
Statutory enactments of England, of Great Britain, or of the United
Kingdom, and other statutory or non-statutory rules of law, in force in
Canada,
(i) which cannot be repealed or altered either by the Parliament of
Canada or by the legislature of one or more provinces, or
(ii) which can be repealed or altered by the Parliament of Canada, but
only with the concurrence of the legislatures of one or more
provinces.
Let me make a few observations on this classification, which, I hope, is
one which can assist orderly analysis and discussion.
In particular, I am concerned to distinguish the question, What in truth
is provincial law?, from the question, Can provincial law ever be law “of
Canada” within s. 101 of the Act of 1867?
McGILL LAW JOURNAL
[Vol. 27
Even if the second question is to be answered in the negative, we should
have much less confusion than we do if more care and attention were
devoted to the first question, which seems to me to have been treated rather
too summarily. Indeed the first question seems to have been obscured by the
debate on the second.
As to the second question, then, when once the decision has been’itaken
to read the word “Canada” in s. 101 of the 1867 Act to mean thefederaljural
entity, not the sovereign nation state, I readily concede that he who proposes
to treat provincial laws as “Laws of Canada”, even for limited purposes only,
must admit that he has retreated at least from the core to the margins of the
concept of a law “of Canada”. Indeed, as we shall see, the Supreme Court of
Canada now takes the position that it is altogether impermissible to treat a
provincial law, when operating of its own force, as a law “of Canada” within
s. 101 even when the provincial law applies to federal matters (by which I
mean matters lying within the exclusive or concurrent legislative authority of
the Parliament of Canada, and as to which the Parliament of Canada can
legislate as it pleases). As we shall see, Quebec North Shore Paper decides, if
it decides anything, that the mere power of the Canadian Parliament to
displace a provincial law, –
to derogate from it, or to exclude its application
altogether, in some or all circumstances,- does not make it a federal law,
even in its application to those mattersfrom which the Parliament of Canada
can exclude it at will.
Yet even if this be so, -and
at this stage I am concerned neither to
approve nor to dispute the proposition, – we must still decide what is a
provincial law.
It is here, on the first question, that care and attention are more than ever
needed.
Whatever else the concept of “provincial law” may or may not embrace,
provincial statutory enactments are clearly the purest instances of provincial
law. For whatever else they may or may not be, provincial statutory
enactments are undeniably provincial law. I have put them in a category by
themselves, not only because they are the clearest instances of “provincial
law”, but because they are obviously the most sensitive vis-ei-vis s. 101 of the
1867 Act. In reading Quebec North Shore Paper, indeed, I find it difficult to
escape the feeling that the doctrine laid down in that case was addressed, at
least in intention, essentially to provincial statute law.52 In that case,
52 See, e.g., the observations in Quebec North Shore Paper, supra, note 11, 1065 per
Laskin C.J.C. that “when provincial law is applied to disputes involving persons or
corporations engaged in enterprises which are within federal competence it applies on the
basis of its independent validity”. This, and the subsequent discussion, is true of provincial
legislation. But the laws continued by s. 129 of the Act of 1867, and subsequent Imperial
statutes, are law independently of any kind of provincial action; and, indeed, in the case of
laws of the classes continued by s. 129, are anterior to the very existence of the provisions
1982]
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159
“provincial
law” and “provincial legislation” seem to be treated as
synonyms. 53 The Chief Justice writes as if he has it in mind to prevent
enforcement of provincial legislation ins. 101 courts, though if we look at the
result, rather than the reasons given,54 the case goes further.
We surely need to be able to decide what are “provincial” laws if we
propose to exclude their enforcement as such from Canadian federal courts.
In seeking to interpret s. 101 of the Act of 1867, we cannot even know what is
meant by the various suggested tests, still less choose amongst them, let alone
apply them in any coherent or intelligible manner, if we do not achieve a
satisfactory classification of laws.
Provincial statutory enactments, then, -that
is, laws in category 6,-
whatever else they may or may not be, are plainly “provincial laws”. Putting
aside the question whether or not they can ever be “Laws of Canada” within
s. 101 of the 1867 Act, what of the other classes of rules?
What of the common law? Local pre-Confederation enactments?
“Received” English statutes? Imperial statutes in force in Canada of their
own authority?
As you will see, my scheme of classification treats all of these four classes
of laws distributively, as “Laws of Canada” or “laws of the Provinces”
precisely in the measure that the Parliament of Canada, or the legislatures of
the provinces, as the case may be, can amend or alter them. A single rule of
law may thus, at the same time, be both federal and provincial law if both
lawmaking institutions, for some purposes or even for all purposes, have
authority to amend, repeal, or alter that rule. In short, I classify rules of these
four kinds, – all of them rules which the province never enacted as law, –
all of them rules which in no sense depend on provincial legislative action for
their initial jural existence or continuing legal force, as federal law precisely
to the extent of their application to federal matters. Indeed, s. 129 of the Act
of 1867 seems to me to impose this result for categories 2, 3 and 4.
What is more, I find it difficult to see what other coherent or workable
test could be found. The matter cannot, I think, properly be dealt with by
saying that ifa given rule, – be it a rule of the common law, or of a local pre-
Confederation enactment, or of a “received” English statute, or of an
Imperial statute in force proprio vigore,- applies to provincial matters in
themselves. These are laws of”unitary” jurisdictions, continued distributively under federal
and provincial authority, according to their respective jurisdictions.
53 1 mmediately after the words quoted, ibid., Laskin C.J.C. begins to speak of provincial
“legislation”. That word is twice used, and then the Chief Justice reverts to the word “law”.
54The cause of action could, it seems, have been made out completely on “pre-
Confederation” law continued under s. 129 of the Act of 1867. The case on its facts would
establish that that is insufficient, even where the transaction was one as to which Parliament
could have re-enacted the pre-Confederation law, which could accordingly be argued, with
great plausibility, to be law of Canada pro tanto.
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more circumstances than it applies to federal matters, the rule is, merely for
that reason, a rule of pure provincial law, and vice versa. Such an approach
seems to me to have little to commend it, and indeed to verge on the
unmanageable. Even where a rule, or set of rules, in categories 2, 3, 4 or 5, is
one which the provincial legislature could (but does not) wholly supersede by
means of a provincial enactment, which provincial enactment ifmade would
then apply to all matters, federal as well as provincial, it still does not seem to
me that such a rule, or set of rules, is on that account purely provincial (any
more than the converse would be true, and one tried to stamp laws in
categories 2, 3, 4 and 5 with a purely federal character). What is more, those
who insist that, even insofar as it applies to matters within federal legislative
authority, a provincial statutory enactment is not a law “of Canada” merely
because the Parliament of Canada abstains from superseding it, are in a
peculiarly unsuitable position to argue that, simply because a provincial
legislature could, if it chose, repeal a common law rule, – or a pre-
Confederation local enactment, or a “received” English enactment, or an
Imperial enactment, –
the rule of law in question is on that account pure
provincial law.
How, then, did my seven categories stand under the Consolidated
Distilleries cases?
For reasons upon which I shall elaborate in due course, and in which
practical considerations play a significant and (I think) legitimate part, –
I
would read Anglin C.J.C.’s 1930 judgment for the majority of the Supreme
Court in the third-party Consolidated Distilleries proceedings, in the sense
favourable to the wider scope for “Laws of Canada” under s. 101 of the 1867
Act: that is, as excluding constitutionally from the jurisdiction of Canadian
“federal courts” such matters and only such matters as lay, using his own
words, within “the whole range of matters within the exclusivejurisdiction of
the provincial legislatures”.
But however Chief Justice Anglin’s opinion in the third-party case be
interpreted, it cannot be over-emphasized that Lord Russell’s judgment in
the Privy Council in 1933 is in any event a wider, later, and (as far as it goes)
definitive statement of constitutionally permissible
judicial
jurisdiction. Surely, -if
one really is concerned with the effect of the
authorities as they stood immediately before the Quebec North Shore Paper
decision, –
statement prevails over anything
inconsistent to be found in the Supreme Court’s decision of 1930.
the Privy Council’s
federal
In sum, I submit, with respect, that under Lord Russell’s test for
constitutionally-permissible federal court jurisdiction, -“actions
and suits
in relation to some subject-matter, legislation in regard to which is within the
legislative competence of the Dominion”, –
a Canadian federal court could,
by the Parliament of Canada, constitutionally be authorized to hear and
determine proceedings founded on laws in all or any of my first six
1982]
CANADIAN FEDERAL COURTS
categories. As to the seventh, its inclusion, I concede, would require an
extension of Lord Russell’s test for constitutionally permissible federal
judicial jurisdiction, though not necessarily an extension of Chief Justice
Anglin’s test for “Laws of Canada” in its last-stated form (i.e., laws on
matters not within exclusive provincial jurisdiction).
That this was the effect of the authorities as they stood immediately
before the decision of the Supreme Court of Canada in the Quebec North
Shore Paper seems to me as clear as can be. In essentials, at least, it was the
premise on which the Federal Court Bill was passed. 55 It was also a thesis
accepted and cogently stated by the learned judges of the Federal Court of
Canada 56 until they were overruled by the Supreme Court of Canada, which
has rejected it to a substantial degree and replaced it with a new doctrine
which, to me, remains unclear in important respects, and unsatisfactory in
all.
Speaking as one who defended the former thesis in parliamentary
hearings on the Federal Court Bill,57 I remain, despite and even because of
the Quebec North Shore Paper decision and its offspring, a devoted
adherent of the old position, which I think correct in principle and sound in
practice. But we must now turn to the new one.
II. The Quebec North Shore Paper Doctrine: The Constitutional
Requirement of an Elusive Substantive “Federal Law”.
On 29 June 1976, the Supreme Court of Canada, 58 reversing the Federal
Court of Appeal,59 dismissed, for want ofjurisdiction in the Federal Court of
Canada, an action by Canadian Pacific Ltd and Incan Ships Ltd against
Quebec North Shore Paper Co. and Quebec and Ontario Transportation
Co. seeking damages for breach of a contractual obligation to build a rail
car marine terminal at Baie Comeau, Quebec. The action had been
instituted under s. 23 of the Federal Court Act:
23. The Trial Division has concurrent original jurisdiction as well between subject and
subject as otherwise, in all cases in which a claim for relief is made or a remedy is sought
under an Act of the Parliament of Canada or otherwise in relation to any matter coming
within any following class of subjects, namely bills of exchange and promissory notes
55 See The Senate of Canada, Proceedings of the Standing Senate Committee on Legal
and Constitutional Affairs. Second Proceedings on Bill C-172, intituled An Act Respecting
the Federal Court of Canada, 26 November 1970, 3d Sess., 28th Pan.
56 Robert Simpson Montreal Ltdv. Hamburg-Amerika Linie Nord-deutscher[1973] F.C.
1356 (C.A.); The Queen v. Canadian Vickers Ltd[1976] I F.C. 77 (T.D.) (motion to dismiss
third-party notice). Other proceedings in the latter case were decided and subsequently
reported in McNamara Construction, supra, note 35.
57 Supra, note 55.
58 Quebec North Shore Paper, supra, note 11.
59[1976] I F.C. 646 (C.A.).
McGILL LA W JOURNAL
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where the Crown
is a party to the proceedings, aeronautics, and works and
undertakings connecting a province with any other province or extending beyond the
limits of a province, except to the extent that jurisdiction has been otherwise specially
assigned. 60
The ground of dismissal was that there was no “existing and applicable
federal law… upon which the jurisdiction of the Federal Court can be
exercised”, 6′ this being, in the Court’s opinion, a constitutional requirement
under s. 101 of the Act of 1867. It rejected the argument “that judicial
jurisdiction under s. 101 is co-extensive with le,’slative jurisdiction under
s. 91 and, therefore, s. 23 must be construed as giving the Federal Court
jurisdiction in respect of the matters specified in the latter part of the section,
even in the absence of existing legislation, if Parliament has authority to
legislate in relation to them.” 62 Chief Justice Laskin, having stated the
circumstances in which the Consolidated Distilleries cases arose, quotes
extensively from them. Lord Russell’s famous phrase constitutionally
sustaining s. 30 (d) of the then Exchequer Court Act as to “actions and suits
in relation to some subject matter, legislation in regard to which is within the
legislative competence of the Dominion” is read by Laskin C.J.C. as not
“doing anything more than expressing a limitation on the range of matters in
respect of which the Crown in right of Canada may, as plaintiff, bring
persons into the Exchequer Court as defendants. It would still be necessary
for the Crown to found its action on some law that would be federal law
under that limitation.”63 Even if the Privy Council’s 1933 opinion itself, on
its face, allowed this reading, which I think it does not,64 the facts of
Consolidated Distilleries present a major, – perhaps insurmountable,-
obstacle to the Chief Justice’s reading of that case. The Chief Justice, in
Quebec North Shore Paper, does not seem to address the question how,
consistently with his explanation of the case, the Privy Council could, in
Consolidated Distilleries, have sustained the jurisdiction of the Exchequer
Court: unless it be in a passage in which he distinguishes “Crown law”:
It would still be necessary for the Crown to found its action on some law that would be
federal law under that limitation. It should be recalled that the law respecting the
Crown came into Canada as part of the public or constitutional law of Great Britain,
and there can be no pretence that that law is provincial law. In so far as there is a
common law associated with the Crown’s position as a litigant it is federal law in
relation to the Crown in right of Canada, just as it is provincial law in relation to the
Crown in right of a Province, and is subject to modification in each case by the
competent Parliament or Legislature. Crown law does not enter into the present case. 65
60 R.S.C. 1970, Supp. II, c. 10.
61 Supra, note 12, 1066.
62 Ibid., 1058.
63Ibid., 1063.
64See, supra, Part I.
65Supra, note 12, 1063.
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CANADIAN FEDERAL COURTS
Difficult as it is to see why the common law should be federal law when
the Crown is concerned, but not in other cases, this explanation seems, in any
case, quickly to have broken down. In the second of the new line of Supreme
Court decisions, McNamara Construction (Western) Ltd v. The Queen,66
the Crown in right of Canada had, in the Federal Court of Canada sued three
defendants: a contractor on a construction contract to build a Young
Offender’s Institution in Drumheller, Alberta; an Alberta firm of architects
which had prepared the plans, specifications, and tender documents upon
which the construction contract was based; and also the Fidelity Insurance
Co. of Canada, which had provided a surety bond to the Crown in respect of
McNamara’s obligations under the construction contract. I am at a loss to
see how the jurisdiction of the Federal Court of Canada on this last claim
could in any plausible way be distinguished, on the facts, from the
jurisdiction of the Exchequer Court of Canada, under the corresponding
provision of its Act, to enforce a surety bond exacted to ensure due export of
latter upheld constitutionally by the Exchequer Court
bonded spirits, -the
itself, by the Supreme Court of Canada, and by the Privy Council.67 Yet, in
McNamara Construction, all three claims were dismissed on the basis that
there was no “applicable federal law involved in the cases in appeal to
support the competence of the Federal Court to entertain the Crown’s
action”. 68 The Chief Justice distinguished Consolidated Distilleries in this
way:
I take the same view of the Crown’s claim on the bond as I do of its claim against
MeNamara for damages. It was urged that a difference existed because (1) s. 16(1) of
the Public Works Act, now R.S.C. 1970, c. P-38 obliges the responsible Minister to
obtain sufficient security for the due performance of a contract for a public work and (2)
Consolidated Distilleries v. The King … stands as an authority in support of the
Crown’s right to invoke the jurisdiction of the Federal Court where it sues on a bond.
Neither of these contentions improves the Crown’s position. Section 16(1) of the Public
Works Act stipulates an executive or administrative requirement that a bond be taken
but prescribes nothing as to the law governing the enforcement of the bond. The
Consolidated Distilleries case involved an action on a bond given pursuant to the
federal Inland Revenue Act and, as the Privy Council noted “the subject matter of the
actions directly arose from legislation of Parliament in respect of excise” [See [1933]
A.C. 508, 521 (P.C.) per Lord Russell].9
To me, this is simply to draw a distinction where no difference has been
shown to exist. Simply stated, both statutes required exaction by the Crown
of a bond from the subject as a condition of the Crown’s doing something it
need not, or even could not otherwise do. I am aware of not a single particle
of legislation which gave a stronger statutory basis to the Crown’s claim in
66Supra, note 35.
67Supra, notes 13 and 14.
68 Supra, note 35, 662.
69 Ibid., 663.
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the Distilleries case than to its claim in McNamara. Certainly none is cited or
relied on in the reported judgments.
So much for the Privy Council’s decision in the Consolidated Distilleries
Case. I leave it to you to say whether it is still good law; and, if so, whether it
stands for more than the jurisdiction of the Federal Court constitutionally to
enforce the right of the Crown to recover on bonds given pursuant to revenue
legislation for the due export of liquor removed from warehouses. Stet pro
ratione voluntas.
My purpose in Part II is to try to ascertain the basic nature of the Quebec
North Shore Paper doctrine, from the decisions of the Supreme Court of
Canada itself. In later sections I shall try to examine, in some detail, what is
the nature of a substantive enactment; what are “Laws of Canada”; and what
is a “Court for the better Administration” of those laws, and to consider the
case-law of the Federal Court of Canada on these points. For the moment,
however, I wish to try to ask and answer some basic questions about the
doctrine as the Supreme Court itself has stated it.
What may compendiously be described as the Quebec North Shore
Paper doctrine, as the Supreme Court of Canada has laid it down, may be
found, at my latest reckoning, in six cases, whose dates (which are important
in considering the authority of Federal Court decisions) are these:
1. Quebec North Shore Paper v. Canadian Pacific Ltd,70 29 June 1976;
2. McNamara Construction (Western) Ltd v. The Queen,71 25 January
1977;
3. Tropwood A.G. v. Sivaco Wire & Nail Company,72 6 March 1979;
4. Antares Shipping Corp. v. Ship Capricorn,73 13 December 1979;
5. R. v. Thomas Fuller Construction Co. (1958),74 21 December 1979;
6. Aris Steamship Co. v. Associated Metals & Minerals,75 22 April 1980.
In this Chapter I wish to ask four basic questions as to the essential
nature of the Quebec North Shore Paper doctrine requiring that a federal
court proceeding be based upon some substantive federal law, as the
Supreme Court of Canada has enunciated that doctrine.
A. Can common law, local pre-Confederation enactments, “received”
English statutes, and Imperial statutes ever constitute substantive
‘federal law”?
7 Supra, note 12.
71 Supra, note 35.
72[1979] 2 S.C.R. 157.
73Supra, note 2.
74 Supra, note 11.
75[1980] 2 S.C.R. 822.
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CANADIAN FEDERAL COURTS
The statements of the Court are conflicting. In Quebec North Shore
Paper, the Chief Justice, delivering judgment for the Court, referred to
“common law” as federal law in the passage, quoted above, dealing with so-
law”.76 Again, towards the end of his judgment, in
called “Crown
interpreting the pertinent phrase in s. 101 of the Act of 1867, he said:
The word “administration” is as telling as the plural word “laws”, and they carry, in my
opinion, the requirement that there be applicable and existing federal law, whether
under statute or regulation or common law, as in the case of the Crown, upon which the
jurisdiction of the Federal Court can be exercised. 77
Another reference to the adequacy of common law rules as “federal.” law is
found in the Chief Justice’s reasons for the Supreme Court in McNamara
Construction:
In the Quebec North Shore Paper Company case, this Court referred to what I may for
convenience call Crown law as follows: … [His Lordship now quoted all save the first
sentence of the passage, reproduced above, concluding, “Crown law does not enter the
present case.”]
This passage cannot be taken as saying that it is enough that the Crown is a party to a
contract, on which it is suing as a plaintiff, to satisfy the requirement of applicable
federal law. The situation is different if Crown liability is involved because in that
respect there were existing common law rules respecting Crown liability in contract and
immunity in tort, rules which have been considerably modified by legislation. Where it
is not the Crown’s liability that is involved but that of the other party to a bilateral
contract, a different situation prevails as to the right of the Crown to compel that person
to answer process issued out of the Federal Court.
It was the contention of the Attorney-General of Canada on behalf of the Crown that
the construction contract, being in relation to a public work or property, involved on
that account federal law. What federal law was not indicated. Certainly there is no
statutory basis for the Crown’s suit, nor is there any invocation by the Crown of some
principle of law peculiar to it by which its claims against the appellants would be
assessed or determined. 78
So, in the context of Crown liability, the common law may (it seems) be
“federal” law. Crown liability, it must be remembered, is largely liability at
common law. That is the case, notably, with most claims for recovery of
specific property, restitutionary claims, and claims in contract. To argue
that such claims are statutory merely because federal statute removed the
need of the Crown’sfiat to allow proceedings to be brought against it by way
of petition of right, 79 or because federal statute substituted simplified modes
76Supra, note II, 1063.
77Ibid., 1065-6.
78Supra, note 35, 662-3.
79 See Petition of Right Act, R.S.C. 1970, c. P-12, a procedural enactment. See especially
s. 3 (form of petition of right, read with Schedule to the Act); s. 9 (consequences of failure by
the Crown to defend or demur); and s. 10 (read with the definition of “relief’ in s. 2).
McGILL LAW JOURNAL
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of procedure for petition of right,80 would simply mean resort to one more
desperate expedient.
By contrast with the Chief Justice’s indication for the Court that (at all
events in some circumstances) the common law may be “federal” law, Pigeon
J., speaking for a majority of six judges in Thomas Fuller Construction8′
(Martland J., being dissentient), declared: “It is settled that in s. 101 the
expression “Laws of Canada” means laws enacted by Parliament.”8 2
Perhaps this was not meant to be exhaustive. It is interesting to note that the
Chief Justice was absent from the hearing and decision of this case.
My own view of the matter is, of course, set out above in Part I, notably
in connection with my seven-category classification.
I suspect that the
Supreme Court means, or will decide that it means, that, in appropriate
circumstances, the common law should be treated as “federal law”. The
problem is that the appropriate circumstances, as the Supreme Court sees
them, so far seem exceedingly restricted.
The Federal Court of Appeal, in at least one case which did not involve
what Laskin C.J.C. calls “Crown law”), has clearly held the common law to
be “federal law”. In The Queen v. Prytula 3 it affirmed the jurisdiction of the
Federal Court to entertain an action brought by the Crown in right of
Canada as guarantor subrogated in the rights of a lender (a bank) against a
borrower who had defaulted in his obligations under an agreement of loan
contracted pursuant to the Canada Student Loans Act. Heald J., speaking
for the Court (Heald and Urie JJ., and MacKay D.J.), wrote this:
The question is, therefore, whether adjudicating on the rights so conferred on Her
Majesty as against the borrower is the administration of a “provincial” or a “federal”
law.
Primafacie, when a person, whether Her Majesty or not, loans money to another, the
right of the lender to enforce repayment depends on the proper law of contract that
governs contractual relations between ordinary persons [See The Queen v. Murray’
[1967] S.C.R. 262, and Her Majesty in right ofAlberta v. C. T C. [1978]1 S.C.R. 61,72-3
per Laskin C.J.C.]; and that law is a “provincial” law, which can only be changed, as
such, by a provincial legislature.
Parliament, however, has exclusive legislative jurisdiction to make laws in relation to
“banking’ and a law, the purpose of which is to change the rights under a contract
falling within that field, is within the legislative power of Parliament and not within the
legislative power of a provincial legislature. [See A.-G Canada v. A.-G. Quebec (Bank
Deposits Case) [1947] A.C. 33 (P.C.)] Any law so made would be a “federal” law.
Moreover, if there was, at the time as of which sections 91 and 92 of The British North
America Act, 1867 became applicable in relation to Manitoba, a body of law in relation
choice of style: “Statement of Claim” or “Declaration”).
80 See Federal Court Act, R.S.C. 1970, Supp. II, c. 10, s. 48 and Schedule I (offering the
8t Supra, note II.
82 Ibid., 707.
83[1979] 2 F.C. 516 (C.A.), aff’d(1980) 116 D.L.R. (3d) 385 (S.C.C.).
1982]
CANADIAN FEDERAL COURTS
to “banking” (separate from the ordinary law of contract) on which the Bank’s right to
recover from a borrower depended, such body of law would be”federal” law. Similarly,
if Parliament has, since Confederation enacted such a law it is, of course, a federal law.
Here, assuming the validity of the Canada Student Loans Act, it would seem clear that
the law that makes Her Majesty the successor to the Bank in its claim against the
borrower is “federal” law. However, unless that law impliedly creates a new statutory
liability by the borrower to Her Majesty in an amount to be determined by reference to
the loan contract, as opposed to merely conferring on the Crown the rights of the Bank
under the contract of loan, it is open to question as to whether that statute can be said to
be the law that is being administered by a court when it is adjudicating on the claim by
Her Majesty against the borrower from the Bank. In view of the conclusion which I
reach subsequently herein, it is not necessary to answer that question in order to
determine the issue raised in this appeal.
To be more specific, the question here is whether the law of contracts continued in
Manitoba by section 129 is a “provincial” law or a “federal” law in so far as it related to
“banking” contracts.
The relevant parts of sections 91 and 92 read as follows:84
His Lordship now quotes s. 91, introductory words and item 15, and s. 92,
introductory words and item 13, and continues:
It would seem to be clear that a contract whereby a banker makes a loan to a customer is
a matter coming within the subject “banking”. [See A.-G. Alberta v. A.-G. Canada
(Alberta Bill of Rights Case) [1947] A.C. 503, 516et seq. (P.C.)per Viscount Simon]. If
that is correct, the concluding words of section 91 require that such a bank loan contract
“shall not be deemed” to come within section 92(13) whether or not Parliament has
enacted any law with regard thereto under section 91(15). In such a case, if full play be
given to the concluding words of section 91, a post-Confederation provincial law of
general application does not alter law continued by section 129 in so far as it applies to a
matter coming within the section 91 class of subjects…. In so far as a law is applicable to
a matter coming within “banking”, it can, therefore, only be “repealed, abolished or
it cannot be “repealed, abolished or altered”
altered” by Parliament and
by a provincial legislature (section 129 of The British North America Act,
1867)…; and it is, therefore, a “federal” law and not a “provincial” law for the
purposes of section 101 of The British North America Act, 1867, even though it is part
of a general law in relation to property and civil rights that was continued in the
province by section 129.
Provincial legislative authority over civil obligation, – more particular-
ly over contractual obligation, – not excluding the relations inter se of
is, of course, the general rule. And provincial
lender and borrower, –
authority is normally exclusive. But there are important exceptions- one
being legislative jurisdiction with respect to “Banking”. Here the authorities
appear conclusive: the essential cause of action of lender against borrower
for repayment of money lent is, where the loan flows from banker to
customer or from customer to banker, indestructible by provincial
legislation.85 The province, it seems clear (putting aside competent laws of
8Ibid.,
523-5.
85A.-G. Canada v. A.-G. Quebec (Bank Deposits Case) [1947] A.C. 33, 46 per Lord
Porter: “In their [Lordships’] view, a Provincial legislature enters on the field of banking
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general application such as laws ofjudicial procedure, or laws of inheritance)
can neither prevent such obligations from being contracted; nor prevent
them, once having been contracted, from being enforced even in the
provincial courts. To that extent common law rules, dealing with the
obligations inter se of lender and borrower, are under exclusive federal
legislative authority. Pre-Confederation statutory rules, such as those in the
Civil Code of Lower Canada (now Quebec), must of course stand on the
same footing.
In these circumstances, then,- where provincial authority is absolutely
excluded, –
it seems especially bizarre to deny that common law, or pre-
Confederation statutory, rules are “Laws of Canada” within the meaning of
s. 101 of the 1867 Act.
So,- although my argument, as elaborated in Part I, is of course more
general, –
it seems to me that the reasoning of the Federal Court of Appeal
is specially apt (and deserving of acceptance by the Supreme Court of
Canada) where the federal legislative jurisdiction is exclusive. (In any case, I
shall shortly offer alternative grounds for reaching the same result on the
facts in Prytula’s Case.)
Indeed, because the reasoning of the Federal Court of Appeal addresses
itself to cases where federal legislative authority to alter the common law is
exclusive, it is possible to distinguish Prytula’s Case from those, like
McNamara Construction, where (though Parliament if it chose could
presumably re-enact or alter the law applicable as between the subject and
the “federal Crown”) provincial legislation of general application, if enacted,
would apply until excluded: federal jurisdiction thus being demonstrably
concurrent only. Similarly, Quebec North Shore Paper could be
distinguished in the same way, though it involved not common law but local
pre-Confederation statute law (and even the pre-Confederation character of
the law was overlooked or assumed to be irrelevant). I would not willingly
distinguish, for purposes of s. 101 of the 1867 Act, exclusive federal
jurisdiction from concurrent federal jurisdiction. But I concede that the
distinction is a possible one; and indeed that it is at this point that the
when it interferes with the right of depositors to receive payment of their def~osits, as in their
view it would if it confiscated loans made by a bank to its customers. Both are in a sense
matters of property and civil rights, but in essence they are included within the category of
banking.”
A.-G. Alberta v. A.-G. Canada (Alberta Bill of Rights Case)[1947]A.C. 503,518 (P.C.)per
Viscount Simon for the Board: “But in any event, it appears to their Lordships to be
impossible to hold that it is beyond the business covered by the word “banking” to make
loans which involve an expansion of credit. Legislation which aims at restricting or
controlling this practice must be beyond the powers of a provincial legislature. It is true, of
course, that in one aspect provincial legislation on this subject affects property and civil
rights, but if, as their Lordships hold to be the case, the “pith and substance” of the legislation
is “banking”… this is the aspect that matters.”
1982]
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argument for affirming s. 101 jurisdiction becomes (as I think) quite
unanswerable.
By accident or by design, in sum, a very restrictive view has since 1976
prevailed, in the Supreme Court of Canada, as to what are “Laws of
Canada” within the meaning of s. 101 of the 1867 Act. More particularly, a
very restrictive view as to what common law rules, and what local pre-
Confederation enactments, are to be treated as having been continued under
federal authority by s. 129 so as to be “Laws of Canada” under s. 101.
Perhaps s. 101 is indeed being read independently of s. 129. The restrictive
is apparent, at any rate, when common law rules and pre-
view
Confederation enactments concern matters as to which legislation of a
liability, – could be enacted only by
general nature, – notably civil
provincial legislatures. These laws, it seems, are then treated as purely
provincial regardless of the circumstances of their operation. A distinction
has, it is true, been drawn in cases involving the Crown. Common law
liability of the Crown is distinguished from common law liability to the
Crown. The rules imposing the former, but not the rules imposing the latter,
are said to be “federal law”. This distinction is one I cannot fathom at all, just
as I do not see how “Crown law” differs from other law in any way pertinent
to s. 101. It seems to me arbitrary, and to underscore what I consider the
bizarre nature of the whole Quebec North Shore Paper doctrine. No
coherent or comprehensive analysis seems to me ever to have taken place.
Nevertheless, whatever be the fate of common. law rules, “received”
English statutes, if “received” under common law rules, must stand on the
same footing and share the same fate. If “received” instead under localpre-
Confederation enactments, English statutes should stand on the same basis
as the latter. (That, I have argued, is in principle the same basis as the
common law.) If “received” under federal legislation, they would stand on
the same basis as the latter. Indeed, these would in substance be cases of
referential enactment, considered below.
Pre-Confederation Imperial statutes will, I should imagine, – as the
dealt with by the Court on more or less the
current doctrine stands, -be
local
same basis as that upon which it deals with pre-Confederation
In other words, as things stand, it will look at general
enactments.
jurisdiction over the subject-matter of the legislation, without too much
attention to particular applications (unless possibly when this would result in
in a particular case where the
giving the federal court jurisdiction
underlying subject matter happens exceptionally to be purely provincial).
Post- Confederation Imperial statutes (in force proprio vigore) should, but
may not, stand in the same position as those enacted before Confederation.
Under the Quebec North Shore Paper doctrine, more than ever, our
intricate body of law on the constitutional foundations of our legal system
interwoven with the
(concerning “reception” and
like matters, and
McGILL LAW JOURNAL
(Vol. 27
constitutional and territorial history of each province and territory) must be
rescued from neglect and misunderstanding and kept at the fingertips of bar
and bench. To illustrate this point, let me reproduce s. 4 of the Manitoba
Supplementary Provisions Act, being chapter 124 of the Revised Statutes of
Canada, 1927; this provision remains
in force, unconsolidated and
unrepealed:
Subject to the provisions of this Act, the laws of England relating to matters within the
jurisdiction of the Parliament of Canada, as the same existed on the fifteenth day of
July, one thousand eight hundred and seventy, were from the said day and are in force
in the Province, in so far as applicable to the Province, and in so far as the said laws have
not been or are not hereafter repealed, altered, varied, modified or affected by any Act
of the Parliament of Great Britain applicable to the Province, or of the Parliament of
Canada.
The common law, and English statute law as at the prescribed date, are, by
direct enactment of the Parliament of Canada, put into force in the Province
of Manitoba as they relate to matters within the jurisdiction of the
Parliament of Canada. This, of course, was done as part of a post-
Confederation scheme of concurrent federal and provincial legislation to
make more contemporary the Manitoba reception date. But within the
scope of “matters within the jurisdiction of the Parliament of Canada”, the
Province could not constitutionally vary the operation of s. 4 in any way.
The language of s. 4 seems quite wide enough to effect an enactment, by
reference, of the common law rules entitling a lender to recover judgment
against a borrower for a sum of money lent, when the lender is a banker and
the borrower is his customer, or vice versa.86 If so, the causes of action stand
ultimately on afederal statutory basis, and can, consistently with s. 101 of the
1867 Act, be confided by Parliament to the Federal Court of Canada. Since
the report of Prytula’s Case suggests that the loan was governed by the laws
of Manitoba, it would appear that Prytula’s Case independently of any other
ground, can be affirmed by the Supreme Court of Canada on the basis of
Tropwood A.G. v. Sivaco Wire & Nail Co. 87
B. Must the federal law give a complete right of action, or title
to the remedy sought, or power in the court to give it?
As a matter of common sense, if a federal court can administer only
federal law, it should be necessary to show that the federal law gives a
complete right or legal basis to whatever is claimed. Some useful definitions
are given by Lord Diplock in another context:
The existence of the two separate summonses and judgments makes it necessary to
distinguish between absence of jurisdiction in the court and absence of cause of action
in the plaintiff. It is helpful to start by defining some relevant terms for the purposes of
86See authorities cited, ibid.
87Supra, note 72; see, infra, note 94 and accompanying text.
1982]
CANADIAN FEDERAL COURTS
this case. “An action” is an application to a court by a plaintiff for the grant of specified
relief against the defendant. “A cause of action’ is a state of facts the existence of which
entitles the court to grant to the plaintiff the relief applied for in the action.
“Jurisdiction” is the right of the court to enter upon the inquiry as to whether or not a
cause of action exists in the plaintiff and, if a cause of action does exist, to grant or, if the
relief is discretionary, to withhold the relief applied for. Conversely, lack ofjurisdiction
is absence of any right in the court to enter upon such an inquiry at all.88
Certainly much language is used in the Supreme Court which would
suggest this natural formulation of the Quebec North Shore Paper rule: that
is, that a complete title tnder federal law to the remedy sought is a condition
precedent, under s. 101 of the Act of 1867, to the due exercise of federal court
jurisdiction. In Quebec North Shore Paper, for instance, it is stated 89 that
“there is no Act of Parliament of Canada under which the relief sought in the
action is claimed”. In McNamara Construction90 it is said that “there is no
statutory basis for the Crown’s suit.” Still, Consolidated Distilleries is
treated as good law, and, unconvincing as the proffered interpretation of it
may be, the Supreme Court never quite explains it as being a case where
jurisdiction was affirmed because “federal law” actually created the Crown’s
cause of action on such bonds. Laskin C.J.C., indeed, quoting Lord Russell,
is content to say that “the subject matter of the actions directly arose from
legislation of Parliament in respect of excise”. 91 Again, in an effort to explain
why the common law liabilities of the Crown arose from federal law, whilst
its common law rights did not, Laskin C.J.C., refers to the fact of legislative
interventions on the subject of Crown liability – not going so far as to assert
(what could not fairly be asserted) that all such liability (notably contractual
In the passage explaining his above-quoted
liability) was statutory.
observations in Quebec North Shore Paper concerning “Crown law” he says:
This passage cannot be taken as saying that it is enough that the Crown is a party to a
contract, on which it is suing as a plaintiff, to satisfy the requirement of applicable
federal law. The situation is different if Crown liability is involved because in that
respect there were existing common law rules respecting Crown liability in contract and
immunity in tort, rules which have been considerably modified by legislation. Where it
is not the Crown’s liability that is involved but that of the other party to a bilateral
contract, a different situation prevails as to the right of the Crown to compel that person
to answer process issued out of the Federal Court.92
It may be, then, that in some circumstances enough admixture of federal
statute law in the common law soup, so to speak, will suffice to give the
whole a federal flavour. There are already decisions in the Federal Court to
8BRediffusion (Hong Kong) Ltd v. A.-G. Hong Kong [1970] A.C. 1136, 1151 (P.C.
(H.K.)).
89 Supra, note 11.
90Supra, note 35, 663.
91 Ibid., quoting, supra, note 13, 521 [emphasis added].
92 Ibid., 662.
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[Vol. 27
this effect. 93 But, in the nature of things, no. one can tell for sure till the
tasting is finished – at the Supreme Court level, and on a case by case basis,
with a maximum of insecurity to the litigant.
C. What is needed for enactment by referential incorporation?
Referential enactment has enormous potential to create legal rights, as
you will have discovered from the Tropwood Case,94 an action for damage to
goods shipped by sea to Canada. Vast bodies of law can be enacted at a
single stroke. First, of course, it is necessary to find the provision purporting
to incorporate by reference and to enact what is so incorporated. An
unconditional affirmation that a given body of rules has the force of law
suffices. Thus I am prepared to accept that s. 42 of the Federal Court Act
uses language which fairly enacts law. Section 42 reads as follows:
“Canadian maritime law as it was immediately before the 1st day of June
1971 continues subject to such changes therein as may be made by this or any
other Act.”
The difficulty with s. 42, of course, is that exfacie it affirms nothing more
than the continued existence of what was the law immediately before 1 June
1971. But no adequate body of substantive “federal” maritime law, – as the
Supreme Court understands “federal” law, – appears to have been actualy
in force at that date: if by an “adequate” body of law we mean a body of law
capable of providing, coherently and consistently, for the disposition of the
cases on the merits. So some expedient is made necessary if the requisite
substantive federal law is to be provided.
93 See Bensol Customs Brokers Ltdv. Air Canada [1979] 2 F.C. 575 (C.A.)per Pratte and
Le Dain JJ., and Hyde D.J. The appellants’ claim had as its legal foundation both a federal
statutory cause of action and, as an additional necessary element, the law concerning
subrogation. See, generally, the reasons of Pratte J. (Hyde D.J. and Le Dain J., concurring),
and the additional reasons of Le Dain J. who, after quoting from the Supreme Court’s
reasons in Quebec North Shore Paper, supra, note 11, and McNamara Construction, supra,
note 35, continued at pp. 582-3: “There is nothing in this language to suggest that the claim
must be based solely on federal law in order to meet the jurisdictional requirement of s. 101
of the B.N.A. Act, and I do not think we should apply a stricter requirement to the words
“made under” or “sought under” in section 23 of the Federal Court Act. There will inevitably
be claims in which the rights and obligations of the parties will be determined partly by
federal law and partly by provincial law. It should be sufficient in my opinion if the rights
and obligations of the parties are determined to some material extent by federal law. It
should not be necessary that the cause of action be one that is created by federal law so long
as it is one affected by it.”
See also The Queen v. Saskatchewan Wheat Pool [1978] 2 F.C. 470 (T.D.) per Smith
D.J., where, though the duty was one created by federal statute, the learned trial judge
appears to have accepted the proposition that the remedy in damages for its breach was
created by the common law; his Lordship nevertheless affirmed the jurisdiction of the
Federal Court to hear and determine the damage claim.
94 Tropwood A.-G. v. Sivaco Wire & Nail Co., supra, note 72.
1982]
CANADIAN FEDERAL COURTS
A workable solution could, I think, have been found with a little
ingenuity.
Since the definition, in s. 2, of “Canadian maritime law”, includes the law
that “would have been… administered” by the Exchequer Court “if that
Court had had, on its Admiralty side, unlimited jurisdiction in relation to
maritime and admiralty matters”, it would be grammatically possible to read
s. 42 as pointing outside the narrow compass of English and Canadian
sources (common law and statutory) of traditional maritime law. Instead,
s. 42 could be read as including and enacting, – on a province-by-province
basis, -the whole body of provincial law (however defined), as that law
stood immediately before 1 June 1971, for application to maritime and
admiralty matters. What is more, the concluding words of s. 42, which make
the referential enactment which it effects “subject to such changes therein as
may be made by this or any other Act”, would admit of a construction which
would subject the corpus of law so enacted subject to changes madefrom
time to time by competent legislation: not only federal legislation, but
provincial as well. (Contrast the words “any other Act” in s. 42 with the
words “any other Act of the Parliament of Canada” in the definition of
“Canadian maritime law” (s. 2).) The result would be to apply, to a case in
the Federal Court, the same comprehensive corpus of law as would apply if
the litigation occurred in a provincial court. That corpus would include,
apart from any pertinent federal legislation, – and any laws continued
under federal authority by s. 129 of the 1867 Act or otherwise, –
all relevant
valid and applicable provincial law, as it may stand from time to time. [The
emphasis in the foregoing quotations is of course mine.]
Faute de mieux (mieux being the repudiation of Quebec North Shore
Paper with its concomitant problems), or even in company with mieux (so
long as anything short of the Privy Council’s solution prevails), such a
construction would have enormous advantages for the Canadian legal
system in terms of predictability, simplicity, and consistency: these solutions
being of course limited to matters governed by “Canadian maritime law”.
In any case, the Supreme Court of Canada does not take that course. In
Tropwood, it proceeds directly to the definition of “Canadian maritime law”
found in s. 2 of the Federal Court Act:
In this Act…
“Canadian maritime law” means the law that was administered by the Exchequer Court
of Canada on its Admiralty side by virtue of the Admiralty Act or any other statute, or
that would have been so administered if that Court had had, on its Admiralty side,
unlimited jurisdiction in relation to maritime and admiralty matters, as that law has
been altered by this or any other Act of the Parliament of Canada ….
Let me emphasise that by itself this is merely a definition, and nothing
more. No law is enacted except a definitional provision. Section 2 merely
says what “Canadian maritime law” will mean when the term is used
Mc GILL LA W JOURNAL
[Vol. 27
elsewhere, as it is for instance in s. 22(1) to define the scope of a grant of
jurisdiction to the Federal Court of Canada. Section 2, by itself, can enact no
substantive law. The Supreme Court, in Tropwood, is not explicit as to the
means by which, “Canadian maritime law” as defined in s. 2, is enacted as a
substantive body of law. The Chief Justice, curiously enough, refers to the
definition in s. 2 as being “supplemented” by s. 42. That seems to me the
wrong way round. Section 42 is the substantive provision, and s. 2 contains
the definition. Section 2 supplements s. 42 and not vice versa. At all events,
though the Chief Justice never explicitly says how “Canadian maritime law”
was enacted, the best inference from his judgment seems to me that this
occurred through s. 42.
Let us turn, then, to the definition of “Canadian maritime law” to see just
what has been enacted by s. 42. As to this, the Chief Justice, for the Court,
comes to this conclusion:
This definition of Canadian maritime law in s. 2 refers to the law that was administered
by the Exchequer Court “by virtue of the Admiraltv Act or any other statute”. The
reference to the Admiralty Act is undoubtedly to the Act of 1934, but the Adniralty Act
of 1891, although it was repealed, may certainly be considered as “any other statute” by
virtue of which law was administered by the Exchequer Court on its admiralty side. If
therefore there was a deficient incorporation of admiralty law by the Act of 1934, the
same cannot be said of the Act of 1891. 95
In order to reach back to The Admiralty Act, 1891, of Canada, 96 and,
through it, to the substantive provisions of the Imperial statute, the Colonial
Courts of Admiralty Act, 1890, 97 the Supreme Court of Canada thus reads
“law that was administered by the Exchequer Court of Canada on its
Admiralty side” as “law that has at any time been administered by the
Exchequer Court on its admiralty side”. An unnatural reading is given to
words in the imperfect tense; and, what is worse, we are told in effect that all
the statutes ever administered by the Exchequer Court are re-enacted as
substantive law by the Federal Court Act. This bizarre result is of course
really meant to result in implied re-enactment only of a few useful provisions,
notably ss. 3 and 4 of the Canadian Act of 1891, which give us our needed
basic body of substantive maritime law:
3. In pursuance of the powers given by “The Colonial Courts ofAdmiralty Act, 1890,”
aforesaid, or otherwise in any manner vested in the Parliament of Canada, it is enacted
and declared that the Exchequer Court of Canada is and shall be, within Canada, a
Colonial Court of Admiralty, and as a Court of Admiralty shall, within Canada, have
and exercise all the jurisdiction, powers and authority conferred by the said Act and by
this Act.
4. Such jurisdiction, powers and authority shall be exercisable and exercised by the
Exchequer Court throughout Canada, and the waters thereof, whether tidal or non-
95Ibid., 163.
96 S.C. 1891, c. 29.
9743 & 54 Vict., c. 27 (U.K.).
1982]
CANADIAN FEDERAL COURTS
tidal, or naturally navigable or artificially made so, and all persons shall, as well in such
parts of Canada as have heretofore been beyond the reach of the process of any Vice-
Admiralty court, as elsewhere therein, have all rights and remedies in all matters,
(including cases of contract and tort and proceedings in rem and in personam), arising
out of or connected with navigation, shipping, trade or commerce, which may be had or
enforced in any Colonial Court of Admiralty under “The Colonial Courts ofAdmiralty
Act, 1890.”
This entire result, I point out, seems to be founded on s. 42 of the Federal
Court Act, which, ex facie, and in its normal and natural sense, simply
continues maritime law as it existed immediately before 1 June 1971.
The scope of the “Canadian maritime law” enacted as substantive law, by
reference through s. 42 of the Federal Court Act, has arguably been held by
the Federal Court of Canada to go beyond any rule of law that ever was
actually administered by the Exchequer Court of Canada to include those
that (using the language of the definition of “Canadian maritime law”)
“would have been administered if that Court had had, on its admiralty side,
unlimited jurisdiction in relation to maritime and admiralty matters”.98
Furthermore, the classes of matters enumerated in the jurisdictional grants
of s. 22(2) are now held to have been conclusively declared by Parliament to
98See Benson Bros Shipbuilding (1960) Ltd v. Mark Fishing Co. (1978) 89 D.L.R. (3d)
527 (F.C.A.) per Pratte and Urie JJ., and MacKay D.J., and The Queen v. Canadian Vickers
Ltd [1980] 1 F.C. 366 (C.A.) per Jackett C.J., Pratte J. and Lalande D.J.
In Benson, 531 per Pratte J., for the Court: “The admiralty jurisdiction of the Exchequer
Court, therefore, extended to a claim for building a ship on the condition that the ship be
under arrest at the time of the commencement of the action. If the Court had had unlimited
jurisdiction in maritime matters, it appears to me that its jurisdiction in such a matter would
not have been limited to the cases where the ship was under arrest at the time of the
institution of the action.” His Lordship went on to offer alternative grounds for the result.
In Canadian Vickers, 370-1 per Jackett C.J., for the Court:
“As I read section 42, what is, subject to statutory changes, “continued” is
(a) the law that was administered by the Exchequer Court by virtue of The Admiralty Act,
1934,
(b) the law that was administered by the Exchequer Court on its Admiralty side by virtue of
any other statute, and
(c) the law that would have been administered by the Exchequer Court if it had had, on its
Admiralty side, unlimited jurisdiction in relation to maritime and admiralty matters.
It is clear from the decision of the Supreme Court of Canada in Tropwood that item (b) is
not restricted to a law that was so administered immediately before the enactment of the
Federal Court Act. What this Court held in Benson is that section 42 operates to continue a
law that was administered by the Exchequer Court and does not merely operate to continue
such a law to the extent that the Court had jurisdiction to apply it at some time in the past. In
my opinion, this is the plain meaning of section 42 when the substantive provisions of the
Federal Court Act are read independently of the jurisdiction provisions, as in my view they
should be.”
His Lordship went on to support his result on other grounds. It will be remarked that,
though there is some suggestion that the law to be continued under item (b) must have had at
least some prior administration in the Exchequer Court – even if not in the cases to which it
will now be applied -such
a restriction is hard to justify.
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[Vol. 27
be matters of “Canadian maritime law” for the purposes of ascertaining the
scope of substantive “federal law” enacted by s. 42.99
An enormous body of substantive law, necessarily uncertain in extent
and in content, has thus been held to have been enacted by Parliament by
these extraordinarily tortuous methods. If it has been enacted generally as
Canadian law, it should be generally enforceable in provincial courts; and
the impact on the laws otherwise applicable in any given province must be
serious. 100 If per contra this body of substantive law is held to have been
enacted only for administration in the Federal Court, the results of litigation
will often depend upon whether proceedings are brought in the Federal
Court or in provincial courts. The potential for forum shopping seems
enormous.
Any port in a storm. The consequences of Quebec North Shore Paper
have evoked what I consider to be desperate expedients whose full cost to the
legal system are very far from fully revealed. The interests of the legal system
lie in the greatest possible certainty, simplicity, and economy. Quebec North
Shore Paper maximizes uncertainty, complexity, and cost.
And if its object was to minimize interference with the provincial legal
systems, will it have achieved even that? For it will invite actual federal
legislation, and has already induced the courts to find massive legislation by
implication, both in order to enable the exercise of federal judicial
jurisdiction.
Before leaving the topic of enactment by referential incorporation, I
would merely underscore the inherent vagueness of such phrases, found in
Tropwood,’0′ as “a body of federal law, be it statute, common, or other,
99 Skaarup Shipping Corp. v. Hawker Industries Lid, supra, note 2, perhaps explains the
finding, in Antares Shipping Corp. v. Ship Capricorn, supra, note 2, that s. 22(2)(a) of the
Federal Court Act was “existing federal statutory law coming within the class or subject of
navigation and shipping and expressly designed to confer jurisdiction on the Federal Court
for claims of the kind here advanced by the appellant.”
100 This would be the case especially if s. 42 enacts a uniform Canadian law, superseding
provincial laws where it is applicable. Without attempting a definitive assessment of s. 42,
one might suggest the following for discussion. (1) Section 42 ought to be read as continuing
“Canadian maritime law” as defined in s. 2, but only exactly “as it was in force immediately
before the 1st day of June 1971”. (2) It is continued “subject to such changes therein as may
be made by this orany other Act.” This of course includes later Federal statutes. (3) Sections
include, on admiralty and maritime matters, provincial laws as they stand from time to time.
Note that the definition of “Canadian maritime law” concludes: “as that law had been altered
by the Act or any other Act of the Parliament of Canada”, while s. 42 continues Canadian
maritime law, as it was before 1 June 1971 “subject to such changes therein as may be made
by this or any other Act”. Why not read this last as including provincial statutes? The
Interpretation Act, R.S.C. 1970, c. 1-23, s. 28, seems to contemplate the possibility of such a
reading. One might achieve the result that the identical law would prevail wherever the
litigation occurred -in
the Federal Court of Canada or in provincial courts.
10 1Supra, note 72, 161 and 163.
1982]
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competently enacted or recognized by Parliament, upon which the
jurisdiction could be exercised”, or”a body of law, which can be attributed to
federal competence, upon which the jurisdiction can operate” [emphasis
added]. Bodies of substantive law may, on quite tenuous grounds, be found
to have been adopted by Parliament as federal law. For example, almost
anything can be said to be “recognition”. The law, on any view, is wholly
unpredictable. Still, through Tropwood, most traditional maritime law
business is back in the Federal Court of Canada. Tropwood now is the
leading case on Federal Court jurisdiction in maritime law matters, but it
must be read with a growing list of other decisions.
D. What is a “substantive” enactment?
The predictable process of straining
Under the Quebec North Shore Paper doctrine there can be no exercise
of Canadian federal court jurisdiction unless in conjunction with substantive
federal law. Obviously this invites counsel and courts to strain the language
of statutes, to find creation of the necessary substantive law. Of that we have
already seen some evidence. The logical conclusion of the process is to treat
all jurisdictional grants as enactments of substantive law. That would be a
sort of “Catch 101”: no exercise of jurisdiction without substantive law; but
every grant of jurisdiction is substantive law. The result would be to get rid
of the jurisdictional difficulties created by the Quebec North Shore Paper
doctrine, but at the cost, to the legal system, of multiplying causes of action,
with the problems I raised earlier. If you are going to say the grants of
jurisdiction to entertain claims are, in themselves, creations of substantive
law to govern those claims, why bother to ask for the substantive law at all?
into
substantive enactments may have begun with Antares Shipping Corp. v.
Ship Capricorn,10 2 where Ritchie J., speaking for the Supreme Court, held
that both on the true construction of the Federal Court Act, and
constitutionally, the Federal Court could hear and determine an action for a
declaration that the purported sale of a ship by one defendant to another was
void, a declaration that a concluded sale to plaintiff existed, and orders for
specific performance by delivery and by execution of a bill of sale. Whether
this result can be explained as following from the enactment of substantive
“Canadian maritime law” found in Tropwood, I do not presume to say. The
Federal Court of Appeal has proposed such an explanation. 10 3 Moreover,
s. 44, partly relied on by the Court, is pertinent. What is of great interest was
that Ritchie J. explicitly said that s. 22(2)(a) of the Federal Court Act had
enacted the necessary federal substantive law. Overruling Le Dain J., he said
for the Supreme Court:
jurisdictional grants
’02Supra, note 2, 566.
103 Skaarup Shipping Corp., supra, note 2. “Canadian maritime law” thus becomes
independent of its historical scope.
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[Vol. 27
With all respect, I am on the contrary of opinion that the provisions of s. 22(2) (a) of the
Act constitute existing federal statutory law coming within the class of subject of
navigation and shipping and expressly designed to confer jurisdiction on the Federal
Court for claims of the kind here advanced by the appellant.104
I quote s. 22(2)(a), and submit, with respect, that its terms afford not the
slightest basis for treating it as an enactment of substantive law:
22(l) The Trial Division has concurrent original jurisdiction as well between subject and
subject as otherwise, in all cases in which a claim for relief is made or a remedy is sought
under or by virtue of Canadian maritime law or any ot:!,r law of Canada relating to any
matter coming within the class of subject of navigation and shipping, except to the
extent that jurisdiction has been otherwise specially assigned.
(2) Without limiting the generality of subsection (I), it is hereby declared for greater
certainty that the Trial Division has jurisdiction with respect to any claim or question
arising out of one or more of the following:
(a) any claim as to title, possession or ownership of a ship or any part interest
therein or with respect to the proceeds of sale of a ship or any part interest
therein….
To me, this is no more nor less than a grant of judicial jurisdiction. What is
more, if s. 22(2)(a) creates substantive law, why not the rest of the
jurisdictional provisions in the Federal Court Act, including the ones
considered in Quebec North Shore Paper and McNamara Construction? If
we embark upon such a course of statutory construction, the result,
obviously, must be complete uncertainty as to what is and what is not
substantive law in this country. Words cease to mean anything; we are in an
Alice in Wonderland world. Perhaps Ritchie J. merely meant to rely on the
substantive maritime law found, in Tropwood, to have been enacted by
reference. Section 22(2)(a) is, after all, a particularization of s. 22(1), which
covers, generally, claims for relief under “Canadian maritime law”. 105 That
may have been meant: it was not said.
There is in the Tropwood Case, this obscure passage:
Since the present case is admittedly governed by the Federal Court Act, it is that Act to
which we must look to determine whether the jurisdiction now reposed in the Federal
Court to try what I may compendiously call admiralty matters relates to a body of law,
which can be attributed to federal competence, upon which the jurisdiction can
operate. 106
It is given emphasis by Ritchie J. in Antares’07 at the outset of his remarks to
the effect that s. 22(2)(a) creates substantive law. I should have thought that,
to find the grant ofjurisdiction to the Federal Court one looks first to the
Federal Court Act (though other federal statutes may of course confer
judicial jurisdiction, and other legal sources may amplify the terms of all or
0 4 Supra, note 2, 110.
1
105 Ibid.
06Supra, note 72, 163.
10 7 Supra, note 2, 111.
1982_]
CANADIAN FEDERAL COURTS
any of the grants). But tofind Canadian substantive law, one looks to the
whole of Canadian statute law and other sources of federal law (depending
on one’s view of the scope of “federal law”). The Federal Court Act is
primarily, not a source of substantive law, but an Act which constitutes a
court and defines the kinds of claims it is to deal with. Exceptional cases
(e.g., s. 42) apart, it is only in this sense that the Federal Court Act has
anything to do with substantive law. Essentially the Act says what are the
subjects with which the Federal Court is to concern itself, and the procedural
manner of so doing. And there is nothing remarkable about that. It is what
we should expect.
With this general notion of the Quebec North Shore Paper doctrine, let
us then continue a systematic examination of the position of Canadian
federal courts.
III. What are federal courts, and whence comes the legislative authority
to constitute them?
Courts constituted by the legislatures of the provinces, or continued
under their legislative authority by s. 129 of The British North America Act,
1867, or otherwise, are properly described as “provincial courts”; the
terminology results directly from the Act of 1867 itself. 108 That is so even
though the power to appoint the judges of some of them-and those
is by s. 96 of the Act of 1867 confided to the
doubtless the most important –
i.e., to the federal executive government; a
Governor-General of Canada –
if it does not excuse, the unfortunate
situation which it explains,
colloquialism whereunder provincial courts subject to s. 96 are sometimes
referred to as “federal courts”.
At the outset of my discussion I offered a working definition of a
“Canadian federal court”: simply, a court created by or under an Act of the
Parliament of Canada. For most purposes,-
this definition (which we may call the strict, or narrow, definition) is
satisfactory. It can be employed if we are prepared to work with a tripartite
classification of “Canadian” courts, – by which I mean the aggregate of all
the courts within the Canadian constitutional system. Under a tripartite
scheme there would be “federal” courts; “provincial” courts; and “other”
courts.
for almost all purposes, –
The possibility of courts which are neither “provincial”, nor “federal”
under the strict or narrow definition, cannot be excluded. Before the
abolition of the Privy Council appeal, the judicial jurisdiction of the Queen
in Council was certainly not constitutionally that of a “provincial” court.
Through most of its history it would have been regarded neither as “federal”
nor provincial but as “Imperial”. Yet, from the time of the Statute of
108 The British North America Act, 1867, 30 & 31 Vict., c. 3, ss. 92.14, 96 et seq. (U.K.).
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[Vol. 27
Westminster, 1931, as events proved, its authority (as long as it lasted)
continued (to all intents and purposes) subject to the legislative authority of
the Parliament of Canada. 19 Again, the original judicial jurisdiction of the
Queen in Council” 0 to settle boundary disputes has never, so far as I am
aware, been formally abolished; if it survives, its jurisdiction is not that of a
“provinciar’ court. So too, it is at least arguable that the Governor-General
in Council is granted power of a judicial character by s. 93(3) of the Act of
1867, when an appeal is taken to him. If on such occasions the Governor-in-
Council, is by direct operation of Imperial statute, generically, a court (for
the purposes of the rules of natural justice, for instance, or for the purposes of
certiorari and prohibition), what is the nature of that court? Other cases can
be envisaged.
As I have said, a tripartite classification of courts is workable. But
cogent arguments can be advanced for a bipartite classification, in which all
courts not ‘provincial” are federal.
In 1912, Earl Loreburn, when in A.-G. Ontario v. A.-G. Canada”‘ he
spoke for the Privy Council on the subject of legislative authority to require
the courts to give opinions on reference cases, wrote of the Act of 1867 that
“there can be no doubt that under this organic instrument the powers
distributed between the Dominion on the one hand and the provinces on the
other hand cover the whole area of self-government within the whole area of
Canada. It would be subversive of the entire scheme and policy of the Act to
assume that any point of internal self-government was withheld from
Canada.”1 2 Even the appellate judicial jurisdiction of the Queen in Council
was, in the 1947 reference on abolition of appeals,” 3 effectively classified as a
matter concerning what we may call “ultimate appellate jurisdiction”; and
this subject, in turn was treated as falling within s. 101 of the Act of 1867, the
Imperial legislation being simply “an external constitutional limitation.”” 14
The “residuary” authority of the federal Parliament, under s. 91 of the
Act of 1867, embraces all legislative jurisdiction not conferred upon the
provinces, at all events if the federal authority in question
is not
independently conferred upon Parliament by other distinct provisions.
Therefore a “court” not within provincial legislative authority (in virtue of
109A.-G. Ontario v. A.-G. Canada, supra, note 3.
10 “It is certain that the original jurisdiction in cases of this kind relating to boundaries
between provinces.., is in the King and Council”: in Penn v. Baltimore (1750) 1 Ves. Sen. 444,
27 E.R. 1132, 1134 (H.L.)per Lord Hardwicke. It is not clear from the report whether, e.g.,
Re Labrador Boundary [1927] 2 D.L.R. 401 (P.C.), was litigation in the Privy Council by
virtue of its original jurisdiction, or a mere reference to the Judicial Committee for its
opinion, under s. 4 of the Judicial Committee Act, 1833, 3 & 4 Wm. IV, c. 41 (U.K.).
I’ [1912] A.C. 571 (P.C.).
112 Ibid., 581.
” A.-G. Ontario v. A.-G. Canada, supra, note 3.
1’4Ibid., 153.
1982]
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s. 92.14 of the Act of 1867, or in virtue of s. 129 read with s. 92.14, or
otherwise), would, it seems, fall within federal legislative authority. That
authority, if not s. 101 of the 1867 Act, might perhaps be some other specific
grant of substantive authority; but very likely it would be the federal
residuary power. So a cogent case can be made for a bipartite classification
of “Canadian” courts; even, I think, if some outside provincial authority are
not subject to alteration by unilateral federal act. 15
If we prefer a bipartite classification, it would be convenient to define a
“federal court” as a “Canadian” court other than a “provincial” court. This
definition I shall call the wider or “liberal” definition of “federal court”.
I propose, in this part of my discussion to establish, if I can, the
following.
– First, unless for some reason it must be construed otherwise, any
substantive legislative power includes the power to provide for adjudication
on matters within its scope – whether by creating institutions called “courts”
or otherwise.
Second, with the sole exception of s. 91.27 (which excludes “the
–
Constitution of Courts of Criminal Jurisdiction” from Parliament’s power
with respect to “The Criminal Law”), the enumerated heads of s. 91 and all
other grants of federal legislative authority, are at least prima facie apt to
confer authority to provide for adjudication.
Third, s. 92.14 of The British North America Act, 1867 does not, by itself
–
and without more, suffice to prevent Parliament from so employing any part
of its legislative power as to create courts.
– Fourth, s. 101 of the Act of 1867 may indeed exclude the creation of
courts from Parliament’s powers of substantive legislation under the Act of
1867; but it can only have that effect if it is read as exhausting Parliament’s
powers, under the Act of 1867, to create courts.
Fifth, in construing Parliament’s substantive powers it will almost
–
inevitably be necessary to reject any interpretation which would lead to the
conclusion that s. 101 serves no purpose,-adds nothing,-when it
empowers Parliament to provide “for the Establishment of any additional
Courts for the better Administration of the Laws of Canada.” In other
words, Parliament’s substantive powers probably cannot enable it to create
courts if the result will be that the relevant part of s. 101 is thereby rendered
superfluous. The reason why (it is submitted) the relevant part of s. 101 is not
superfluous, even when substantive powers are read to permit the creation of
courts, is (at least) this: Parliament is by s. 101 empowered to create courts of
criminal jurisdiction, which otherwise it could not do, by reason of the
exception in s. 91.27.
15 Consider, e.g., the appellate tribunal established by s. 93(3) of the Act of 1867.
Mc GILL LAW JOURNAL
[Vol. 27
–
Sixth, in any event, there are, outside the Act of 1867, certain powers
which enable the Parliament of Canada to create courts or otherwise confer
judicial jurisdiction.
You will, I think, appreciate that to the extent that Parliament can create
courts in virtue of its substantive legislative powers, it becomes altogether
unnecessary to rely on s. 101 -whatever
its scope may be held to be.
Let me, then, begin.
The Parliament of Canada,
in constituting or authorising
the
constitution of a court of law, does not always, and need not, point to the
alleged source of its authority. Even if it does point specially to some power,
in law Parliament must normally be taken to rely on all authority enabling it
to enact what it purports to enact. Ordinarily it is taken for granted that
Parliament’s authority to create courts lies in s. 101 of the B.N.A. Act, 1867:
The Parliament of Canada may, notwithstanding anything in this Act, from Time to
Time provide for the Constitution, Maintenance and Organization of a General Court
of Appeal for Canada, and for the Establishment of any additional Courts for the better
Administration of the Laws of Canada.
As a rule, that is quite sufficient. But it is well worth asking whether s. 101 is
the only source of Parliament’s authority to constitute courts.
What of the various grants of authority to make substantive laws on
either in virtue of specific sources of legislative
particular subjects –
authority (under s. 91 or otherwise), or in virtue of the residuary authority in
s. 91?
Do these “substantive powers” permit the Parliament of Canada to
create courts having jurisdiction to deal with matters coming within those
classes?
At first sight Parliament’s claim to create courts under its substantive
powers seems irresistible. (Indeed the same may be said of a similar claim by
the legislatures of the provinces.) The power to enact substantive laws is the
power to create rights and obligations; whether these be absolute or sub
modo. Thus in Dupont v. Inglis,16 the Supreme Court of Canada held intra
vires provincial
legislation defining mining rights, and providing for
adjudication by provincial officers (at first instance and on appeal) of certain
disputes regarding the staking of claims. Mr Justice Rand, speaking for the
Court, made the following observations:
I think it desirable to enquire first into the real character and content of the rights which
the statute creates and the means it furnishes to give them recognition. The statute is
dealing primarily with Crown lands; it would, in my opinion, be within provincial
power to dispose of such land, over which legislative jurisdiction is exclusive, on any
terms or conditions to be determined by, or in the absolute judgment or discretion of,
116[1958] S.C.R. 535.
1982]
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any functionary whatever; the award or adjudication, in that case, would itself be a
in the rights created: does the Act here evidence such an
constituent element
intendment? Its language creates rights, but sub modo; consistently with equality of
treatment, tribunals have been set up with officers, ex officio justices of the peace, to
make determinations while the land still remains within the title of the Crown. The
recorder is an officer of the Department; the Commissioner, although not declared a
departmental officer, is a statutory officer. His decisions on disputes are only part of a
general supervising function. This comprehensive administration taken with the
provisions expressly excluding resort to the ordinary Courts, except by appeal under s.
144, indicates that the determinations by the statutory officers are integrated in the rights
provided, that, including those given by the Court of Appeal, they inhere in the rights as
conditions of their creation.] 7
This can, I think, be no less applicable to the Parliament of Canada.
Moreover, (quite apart from the integration of adjudication
in
substantive rights) power to enact substantive laws prima facie includes
power to constitute officers and other public authorities to administer
those laws. That is settled in Canada beyond discussion. As regards the
power to “delegate” even legislative authority itself, I need only quote the
famous phrase of Sir Barnes Peacock, when giving the judgment of the Privy
Council in Hodge v. The Queen,118 insisting, as regards a provincial
legislature, that within its “limits of subject and area, the local legislature is
supreme, and has the same authority as the Imperial Parliament or the
Parliament of the Dominion, would have had under like circumstances to
confide to a municipal institutional body of its own creation authority to
make by-laws or resolutions as to subjects specified in the enactment, and
with the object of carrying the enactment into operation and effect.” Again,
his Lordship remarked that “how far it shall seek the aid of subordinate
agencies, and how long it shall continue them, are matters for each
legislature, and not for Courts of Law, to decide.”” l9 What then of
conferring judicial power? One thing at least seems beyond dispute. It is
manifestly impossible to deny to the Parliament of Canada the authority to
impose upon its officers and other public authorities the obligation to act
judicially in the exercise of all or any of the powers conferred by Parliament
upon them. It is clear also that Parliament when creating courts is free to do
so without designating them by that very word. Thus when legislation, either
expressly or inferentially, grants a power with the obligation to exercise it
judicially, the legislature is, in contemplation of law, creating a body which is
in substance a court, even if the term “court” is nowhere employed. Hence,
for example, the amenability of such a statutory body to certiorari; a remedy
designed to control inferior “courts”. Certiorari, I submit, properly lies to
control inferior judicial tribunals because in law they are courts -not
despite the fact that they are not.
1 Ibid., 539-40.
18(1884) 9 App. Cas. 117, 132 (P.C.).
19 Ibid.
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[Vol. 27
Denying that substantive legislative powers may be employed to create
courts must therefore involve highly embarrassing consequences. To admit
constitutionally the use of substantive legislative authority to create bodies
endowed with statutory powers and obliged to exercise them judicially (with
a procedure perhaps indistinguishable from that of any superior court), –
whilst at the same time denying that the very same substantive authority
consitutionally permits the creation of “courts”, -involves
a distinction
which, if not completely artibrary, will become little more than a matter of
nomenclature.
But though, atfirst sight, power to create courts resides in every grant of
substantive powers of legislation, the difficulty is that certain provisions
specifically deal with the creation of courts, by the Parliament of Canada
(s. 101) and by the provincial legislatures (s. 92.14) respectively. Expressio
unius est exclusio alterius. It is a permissible (though a rebuttable) inference
that these provisions deal exhaustively with the power to create courts, so far
at least as the Act of 1867 is concerned. That I would concede without
hesitation.
I would however emphasize immediately, that even ifs. 101 is exhaustive
of Parliament’s powers under the Act of 1867 we shall still be obliged to
consider the possibility, or indeed the actuality, that powers to create courts,
or to confer judicial jurisdiction, derive from sources outside the Act of 1867.
The Colonial Courts of Admiralty Act, 1890120 conceivably offers an
instance, though on balance it seems to me that it simply confers jurisdiction
on courts independently created. Or again, take The British North America
Act, 1871, which inter alia provides, by s. 4: “The Parliament of Canada may
from time to time make provision for the administration, peace, order, and
good government of any territory not for the time being included in any
Province.” As this is a later enactment, s. 101 of the Act of 1867, taken by
itself, offers no conclusive answer to those who would read s. 4 of the Act of
1871 as conferring an independent power to create courts. Indeed, in Riel v.
The Queen,121 Lord Halsbury, L.C. relied on the Act of 1871 as the
constitutional basis of the federal legislation governing the judicial system of
the North-West Territories. (That does not, of course, prove that the
legislation could not have been sufficiently supported by s. 101 of the Act of
1867, read either with s. 91.27 thereof (“Criminal Law” and “Procedure in
Criminal Matters”) or with s. 4 of the Act of 1871.) Section 5 of the Colonial
Laws Validity Act, 1865122 was suggested as a possible source of provincial
legislative authority in Fielding v. Thomas.23
12053 & 54 Vict., c. 27 (U.K.).
121(1885) L.R. 10 App. Cas. 675 (P.C.).
12228 & 29 Vict., c. 63 (U.K.).
123[1896] A.C. 600, 610 (P.C.) per Lord Halsbury.
1982]
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In sum, it is a very bold assumption that the only federal legislative
authority to create courts is that which resides in s. 101 of the Act of 1867.
But is s. 101 exhaustive so far as the Act of 1867 is concerned? In this
connection, it is worth recalling that one “substantive” head of federal
legislative power does explicitly exclude the power to create courts. That is
head 27 of s. 91: “The Criminal Law except the Constitution of Courts
Criminal Jurisdiction, but including the Procedure in Criminal Matters.”
This at least arguably invites (I do not say conclusively imposes) the inference
that there is no such exclusion as regards the other heads of federal legislative
authority.
In any event, if the power to create courts is to be excluded from the
various federal legislative powers to enact substantive law, that must (it
seems) be a result which flows from s. 101 of the Act of 1867. The provisions
of s. 92.14 conferring on the provincial legislatures exclusive authority with
respect to: “The Administration of Justice in the Province, including the
Constitution, Maintenance, and Organization of Provincial Courts, both of
Civil and Criminal Jurisdiction, and including Procedure in Civil Matters in
those Courts” do not seem, by themselves, sufficient to accomplish this
result; and this is so for various reasons. I think them important.
First, the powers enumerated in s. 91 are granted “notwithstanding
anything in this Act”. 124
Second, if s. 92.14 is by itself sufficient to deny Parliament power to
create courts of civil jurisdiction, it should also suffice by parity of reasoning
to deny the power to create courts of criminal jurisdiction; yet special words
are included in head 27 of s. 91 to produce this result: “except the
Constitution of Courts of Criminal Jurisdiction”. It is an elementary canon
of statutory interpretation that these words ought, if possible, be given some
effect, and not held to be superfluous. What purpose can they serve unless it
be to ensure the creation of criminal courts is prima facie, left to the
provincial legislatures, and (subject to s. 101) exclusively to them?
There is a third reason. To hold s. 92.14, by itself and without more,
capable of excluding the power to create courts from the grants of
legislative authority (especially from those in the
substantive federal
124 The words of s. 91 are explicit and should need no gloss. But if any judicial authority be
required, it is provided by Lord Atkin speaking for the Privy Council in Proprietary Articles
Trade Assoc. v. A.-G. Canada [1931] A.C. 310, 326-7 (P.C.): “If then the legislation in
question is authorized under one or other of the heads specifically enumerated in s. 9 1, it is
not to the purpose to say that it affects property and civil rights in the Provinces. Most of the
specific subjects in s. 91 do affect property and civil rights but so far as the legislation of
Parliament in pith and substance is operating within the enumerated powers there is
constitutional authority to interfere with property and civil rights. The same principle would
apply to s. 92.14, “the administration of justice in the Province”, even if the legislation did, as
in the present case it does not, in any way interfere with the administration of justice.”
McGILL LAW JOURNAL
[Vol. 27
enumerated heads of s. 91) proves too much. It might well be taken to prove
not only that the Parliament of Canada cannot employ its substantive
legislative powers to create new courts, but to prove also that it cannot
regulate the procedure in federal matters in the provincial courts. After all,
s. 92.14 includes amongst provincial legislative powers not merely “the
Constitution, Maintenance, and Organization of Provincial Courts, both of
Civil and Criminal Jurisdiction”, but also “Procedure in Civil Matters in
those Courts”. So far as s. 92.14 is concerned, both these matters, -the
constitution of courts on the one hand and civil procedure therein on the
other, -stand on an equal footing. The result would be hard to avoid, that
if s. 92.14, by itself, is held to exclude from the grants of federal legislative
authority the power to create new courts, it would at the same time and on
legislation regulating procedure in
same reasoning, exclude federal
provincial courts, even as regards proceedings where the subject matter is
federal in the strictest sense. Such a result would be repugnant to a consistent
jurisprudence of the highest authority and of the longest standing. 125
Moreover, to deny the Parliament of Canada power to regulate proceedings,
albeit in provincial courts, upon laws enacted by it (and even those continued
under its legislative authority), would be a step not merely novel but
repugnant to the plainest principle. Permit me to digress for a moment on
this subject.
The power to enact law on a given subject is in its very essence the power
to define rights and obligations, liabilities, privileges, powers and immunities
on that subject. It cannot possibly be maintained with the least plausibility
that an attempted exercise of such a power is a priori either within, or
outside, the authority conferred, accordingly as the law made is general, or
specific, in its terms. An enactment which (say) imposes upon a carrier a
specified liability to the holder of a bill of lading, does not alter its
constitutional character merely by the degree of detail by which it spells out
his obligations. It is of the same constitutional character, whether it contents
itself with providing merely in general terms that the carrier shall in certain
cases be liable in damages, or whether it defines the right in the utmost detail,
giving all the circumstances in which, methods by which, and officers by
even the goods or other property
whom the obligation shall be enforced-
answerable for the obligation – and even (it may be) with all the specificity
of a code of procedure. In the enactment of rights and obligations,
extremism in the pursuit of specificity is no constitutional vice; moderation
in the pursuit of specificity is no consitutional virtue. One may gladly accept
the convenience of establishing comprehensive procedural rules, and even of
125 See, e.g., Cushing v. Dupui (1880) L.R. 5 App. Cas. 409,415 (P.C.); and, for a modern
case, Proprietary Articles Trade Assoc. v. A.-G. Canada, ibid.
It is also implicit or explicit in the cases upholding the power of Parliament to confer new
jurisdictions and impose new duties on the provincial courts; see, e.g., the cases collected in 7
Can. Abr. (2d) Nos 962-7, and Nos 1081-92.
1982]
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enacting them separately from so-called “substantive” rules. One may also
acknowledge that the provincial legislatures have been entrusted with the
power to make procedural rules as regards all civil actions in provincial
courts whatever the source of the substantive law -and
concede that this
power will on occasion oblige the courts to decide whether or not the limits
appropriate to “procedure” have been exceeded. None of this, however,
detracts from this essential truth: an authority entrusted with the power to
enact laws on a given subject cannot be taken to have been limited impliedly
as to the specificity of its enactments. Indeed, where procedural and
substantive enactments are separately made, it is often a matter of arbitrary
decision whether given provisions are included in the one or in the other. To
take an example, the provisions respecting the privilege for law costs in
Quebec are divided between the Civil Code and the Code of Civil Procedure;
and yet they might just as readily all have been included in the one or the
other. As the Privy Council observed in Exchange Bank of Canada v. The
Queen,126 in 1886, in discussing the relationship of the provisions of the Civil
Code, and of the then Code of Civil Procedure (i.e., that of 1867), concerning
privileges:
The appellants at the Bar have pressed somewhat too absolutely the argument that a
Procedure Code is not intended to enact substantive law, and that this part of the
Procedure Code is only intended to give directions to the Courts how to carry the rules
of the Civil Code into effect. Some of the articles of the Procedure Code (e.g., art. 610)
do create or establish rights not touched by the Civil Code. The two Codes should be
construed together in this part just as if the articles of the Procedure Code followed the
corresponding articles of the Civil Code.
So reading them, we find that the main purpose of this part of the Procedure Code is to
carry into detail the principles laid down in the Civil Code, which are repeated in the
form of directions how money is to be distributed. And where fresh classes of priorities
are established, they are subordinate classes not interfering with the larger classification
of the Civil Code. Of course it could be no part of the Procedure Code to contravene the
principles of the Civil Code, and it is clear from art. 605 that the two were believed to be
working in harmony. And when the Procedure Code is found to overlap the Civil
Code, and so it becomes necessary to modify the one or the other, the fact that the
function of the Procedure Code is in this part of it a subordinate one favours the
conclusion that it is the one to be modified. 127
If, then, Parliament can, to the extent it thinks fit, controlprocedure and
jurisdiction 28 in federal matters in provincial courts, I cannot see (unless in
consequence of the argument with which I shall deal in a moment) why its
“substantive” legislative powers should not, with equal legitimacy, be
employed to create new courts outright to deal with the same matters.
Indeed in Valin v. Langlois, 29 the Privy Council seems to have thought
federal control of the jurisdiction and procedure of provincial courts in
126(1886) L.R. II App. Cas. 157 (P.C.).
127 Ibid., 169.
128 Supra, note 125.
129(1879) L.R. 5 App. Cas. 115 (P.C.).
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[Vol. 27
federal matters, and federal establishment of new courts with respect to
federal matters, to stand on the same footing.130
I have defended, at some length, the power of the Parliament of Canada
to employ its substantive legislative authority to regulate jurisdiction and
procedure in federal matters in provincial courts. I have done so not only
because of the intrinsic importance of the question (and its potential use as
regards maritime matters) but also because it seems to me that if this power
exists despite the provincial authority defined in s. 92.14 of the Act of 1867,
so equally does Parliament’s power to employ the like substantive authority
to create federal courts outright – unless of courses. 101 is taken to exhaust,
so far as the Act of 1867 is concerned, the federal legislative authority to
create courts. That really is decisive.
The decisive question is then whether or not s. 101 is to be held to cover
the whole ground of Parliament’s court-creating power under the Act of
1867.
Is s. 101 properly to be construed as exhaustive? The Quebec North
Shore Paper Case and its offspring assume, rather than decide, that it is. If
s. 101 is not exhaustive, and if federal courts can be created under the
substantive grants of federal legislative power, very important consequences
indeed must follow. The phrase “Courts for the Better Administration of the
Laws of Canada” becomes irrelevant whenever another power can be relied
on. The “other” power must normally be a grant of substantive authority,
and in deciding whether any given grant will support Parliamentary
conferral of any given judicial jurisdiction, the only question is one which is
the same as that which applies to any federal statute: is the statute enacted in
relation to some subject matter within federal legislative authority? In
deciding the latter question, it seems plain that a law which says (for
example) who is to hear claims arising from collisions of ships is no less a law
in relation to such collisions than is a law which specified the parties who are
to be liable for such collisions and the measure of their liability. Similarly a
law which says who is to hear disputes as to contracts to construct terminals,
is no more, and no less, a law “in relation to” such terminals than is a law
prescribing the liability on such contracts. Both laws are within the
substantive federal legislative power, – or neither is. If so, the Quebec North
Shore Paper doctrine seems to me to depend first and primarily, on the
correctness of its “threshhold” assumption that s. 101 of the Act of 1867 is
exhaustive of Parliament’s power under that Act to create courts, and only
secondarily, and once that assumption has been accepted, on the true
construction of s. 101.
Is the assumption of the exhaustive character of s. 101 well-founded?
That is not an easy question. Anyone who maintains that s. 101 is
130Ibid., 118-21.
1982]
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not exhaustive (of Parliament’s court-creating powers under the 1867 Act)
must expect to be asked what purpose is then served by that portion of s. 101
which empowers Parliament to provide for “the Establishment of any
additional Courts for the better Administration of the Laws of Canada”. A
theory which would have it, in effect, mean nothing; which would have it add
nothing to and subtract nothing from powers already found elsewhere in the
Act, is a theory likely to find little favour in any court of law. Let me,
therefore, suggest that, though it is of course carefully drafted in very general
language, the presence of the second branch of s. 101 is necessary to restore
to the Parliament of Canada the power to create courts of criminal
jurisdiction, which, by reason of the exception from s. 91.27, has been denied
to Parliament in the general scheme of distribution of legislative authority
found in ss. 91 and 92.
On the other hand, what consequences follow if s. 101 is found to be
exhaustive? It seems to me that then every officer or body constituted by
federal statute and amenable to certiorari–that is to say, every officer or
body of a judicial nature – being, in contemplation of law, a “court” –
be held to be an
nomenclature being no substitute for analysis! -must
“additional” court “for the better Administration of the Laws of Canada”. I
cannot see why (for example) inferior courts could be created under
“substantive” legislative powers, but superior courts could not.
I would submit that, on balance, s. 101 is better read as not exhausting
Parliament’s power, under the 1867 Act, to create courts. If that is so,
Parliament’s power to create courts, and to confer judicial jurisdiction, is
(regardless of the ambit of s. 101) coextensive with its power of law-
making-not merely coextensive with substantive federal law. If so,
Quebec North Shore Paper is wrongly decided, regardless of the proper
scope of s. 101.
A word
lastly on territorial courts-or, more generally, courts
exercising jurisdiction in respect of the territories. Whether Parliament’s
power arises under s. 101 of the Act of 1867,-or under s. 4 of the B.N.A.
Act, 1871,-or even under the federal “residuary” power,-or, indeed,
under two or more of these powers, it must be indisputable that federal
legislative authority as to courts for the territories is both comprehensive and
absolute.
Courts aside, in the territories, there is no competing provincial
authority on any subject. Federal legislative authority on all subjects
(whether the complement to its Canada-wide authority be derived entirely
from the Act of 1871, or partly from the residuary power) follows ipsofacto.
In a strictly bipartite classification of courts, those established by
Parliament for the territories must be considered federal courts. If a
tripartite classification be found necessary to explain certain phenomena,
McGILL LAW JOURNAL
(Vol. 27
territorial courts might well be instances of the tertium quid- neither
strictly federal, nor provincial. Consider, for example, the question whether
s. 133 of the Act of 1867 applies to guarantee free use of the English and
French languages in territorial courts. Section 133 provides that “either of
those languages may be used by any Person or in any Pleading or Process in
or issuing from any Court of Canada established under this Act, and in or
from all or any of the Courts of Quebec”. Is a territorial court a “Court of
Canada” within the meaning of s. 133? Is it, in any event, a court of Canada
“established under this Act”- i.e., the Act of 1867?
Whatever be the true construction of s. 133 of the 1867 Act, the
territories should, it seems, present no problems on the jurisdictional issues
with which we are concerned. Where Parliament creates courts in and for
the territories, its authority to do as it pleases in prescribing their jurisdiction
follows clearly from one or more of the three sources I have mentioned
above. Where Parliament (as with the Federal Court of Canada) creates
courts exercising jurisdiction outside the territories but in respect of the
territories, the same appears to me to be true. (If Beetz J. should, on behalf of
the Supreme Court, assert that, as regards federal legislative authority
exerted in respect of the territories but outside the boundaries of the
territories themselves, the territories are a subject in relation to which –
rather than a place in which -the
federal Parliament exercises exclusive
legislativejurisdiction, 3′ – at all events when Parliament deals with matters
normally within provincial jurisdiction, –
I think I would cheerfully
acquiesce.) Possibly, though not necessarily, that may shift the basis of
legislative authority as amongst the three sources I have mentioned.
Lest you, too hastily, conclude that my discussion on the territories is no
more than the cadenza of an enthusiastic lawyer, I refer you to Alda
Enterprises Ltd v. The Queen, Commissioner of the Yukon Territory
Government of the Yukon Territory, and Town of Faro,’32 an action in
negligence seeking damages against the alleged owners and operators of a
sewer and water system, in consequence of damage sustained through the
subsidence of land upon which plaintiff’s hotel was built, the pipes having
failed and water having escaped into the permafrost. The action, brought in
the Federal Court of Canada, was dismissed by Collier J. as against the
Town, for what of “existing and applicable federal law”, though it was
allowed to go forward as against the Crown on the basis of the Crown
Liability Act.
131 Construction Monicalm Inc. v. Minimum Wage Commission [1979] 1 S.C.R. 754;
Cardinal v. A.-G. Alberta [1974] S.C.R. 695. The analogy would be with federal Crown land
or with Indian reservations. These analogies could not avail as regards the operation of
federal laws within the territories but might, arguably, do so outside them.
’32[1978] 2 F.C. 106 (T.D.).
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CANADIAN FEDERAL COURTS
I am not concerned with the question whether there was, under the terms
of the Federal Court Act or Rules, any statutory basis for Federal Court
jurisdiction over the Town. Perhaps there was not. But it seems to me
astounding that the claim should be dismissed on the ground that the claim
was not founded on “Laws of Canada” within the meaning of s. 101 of the
Act of 1867. Even assuming, without deciding, that s. 101 of the 1867 Act
was the only constitutional basis for Federal Court jurisdiction quoad the
Yukon, the short answer is that all the Yukon’s laws are “Laws of Canada”
within the meaning of s. 101: and that this is true whatsoever be the source of
Parliament’s power to enact, – or authorize, through subordinate legislative
authorities, the enactment, – of all or any of the Yukon’s laws.
IV. Postscript: Rhine’s Case and Prytula’s Case
On 2 December 1980,-some six months after the delivery of this
paper,-
the Supreme Court of Canada unanimously dismissed appeals in
two cases:133 Rhine v. The Queen, – a claim by the Crown in right of Canada
for repayment of a sum allegedly owing in consequence of an advance made,
in pursuance of the Prairie Grain Advance Payments Act, 134 to a grain
producer in respect of undelivered grain; and Prytula v. The Queen,- a
claim by the Crown in right of Canada as guarantor subrogated in the rights
of a lender, namely a bank which, pursuant to the Canada Student Loans
Act,135 had lent to the appellant a sum which she failed to repay. Laskin
C.J.C. delivered the reasons of the Court, which dealt with both cases, these
having been argued together. In both, the jurisdiction of the Federal Court
of Canada was affirmed.
The Supreme Court of Canada reaffirmed the position that “there must
be existing and applicable federal law to support the claims made in these
cases by the Crown, otherwise, there would not be conformity with the
provisions of s. 101 of the British North America Act, 1867”.136 Although, in
the course of its finding that the necessary federal law existed, the Court
emphasized the two statutes pursuant to which the monies had been paid, it
did not suggest that these created statutory causes of action; indeed, it seems
implicitly acknowledged that they did not. So far from insisting upon the
constitutional necessity of a complete title by federal statute to the relief
claimed, the Court refers to the common law itself as being, in certain
(undefined) circumstances, federal law. Yet the reasons give so much
emphasis to the two statutes as to compel the conclusion that, without them,
133(1980) 116 D.L.R. (3d) 385 (S.C.C.) per Laskin C.J.C., Martland, Ritchie, Dickson,
Estey, McIntyre and Chouinard JJ.
134 R.S.C. 1970, c. P-18.
135 R.S.C. 1970, c. S-17.
136Supra, note 133, 387. This was stated to be the effect of McNamara Construction,
supra, note 35.
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[Vol. 27
the necessary “federal law” would not exist. The Court does not, however,
give any test for ascertaining just what rrle statutes must play if they can stop
short of creating a complete cause of action. This, surely, vindicates my
expressed concern that “in some circumstances enough admixture of federal
statute law in the common law soup, so to speak, will suffice to give the
whole a federal flavour …. But, in the nature of things, no one can tell for
sure till the tasting is finished – at the Supreme Court level, and on a case by
case basis, with a maximum of insecurity to the litigant.”‘ 37
The Chief Justice summarizes the reasons of the Court in a “Conclusion”
covering both appeals:
The short answer to the issues raised by the appellants in the two cases is that each of the
statutes with which they are respectively concerned provides for the advancing of
federal funds or federally guaranteed funds to eligible individuals, as defined in the
respective statutes and Regulations, and also for repayment and the means for
enforcing repayment. This is all a matter of the administration of a federal statute and
is, therefore, within s. 101 of the British North America Act, 1867. Consequently, it
supports jurisdiction in the Federal Court under s. 17(4)(a) of the Federal Court Act. 138
The role of statutory provisions is explained separately for each of the two
appeals. In Rhine’s Case, the account is followed by an afterthought about
the common law:
The Prairie Grain Advance Payments Act has, as its stated purpose, the making of
advances to grain producers in respect of grain not yet delivered to the Canadian Wheat
Board. It is part of a scheme for the regulation of the grain trade ….
Under the Prairie Grain Advance Payments Act, a producer may apply to the Canadian
Wheat Board (which is an agent of the Crown) for an advance payment under a
prescribed form. Various details of the applicant’s business or operations must be
disclosed as stipulated in s. 4. The applicant must give an undertaking in respect of
delivery of grain or in respect of repayment if grain is not delivered, and upon default
proceedings may be taken against him. The statute provides fora lien upon the grain in
respect of which an advance is made and Mr. Robinette conceded that in this respect
there would be valid federal law to support the jurisdiction of the Federal Court.
However, since the claim here is not for enforcement of a lien but rather for repayment
upon default in accordance with the undertaking, it is contended that there is simply the
enforcement of an ordinary contractual obligation which owes nothing to federal law
other than its origin in the statutory authorization to make the advance.
I do not agree that the matter can be disposed of in such simple terms. What we have
here is a detailed statutory framework under which advances for prospective grain
deliveries are authorized as part of an overall scheme for the marketing of grain
produced in Canada. An examination of the Prairie Grain Advance Payments Act
itself lends emphasis to its place in the overall scheme. True, there is an undertaking or a
contractual consequence of the application of the Act but that does not mean that the
Act is left behind once the undertaking or contract is made. At every turn, the Act has
its impact on the undertaking so as to make it proper to say that there is here existing
and valid federal law to govern the transaction which became the subject of litigation in
137Supra, pp. 171-2.
138 Supra, note 133, 390.
1982]
CANADIAN FEDERAL COURTS
the Federal Court. It should hardly be necessary to add that “contract” or other legal
institutions, such as “tort” cannot be invariably attributed to sole provincial legislative
regulation or be deemed to be, as common law, solely matters of provincial law. 39
If the common law can sometimes be federal law for the purposes of
s. 101 of the Act of 1867, when is that so? Why should the common law not
satisfy the requirements of s. 101 in this case, without there being need to rely
on any statute at all? And, whatever the constitutional requirement may be,
if it is satisfied here, why was it not equally satisfied in McNamara
Construction?’40 The Chief Justice attempts, –
in my submission quite
unsuccessfully,-
to explain and distinguish that case:
there was no such statutory shelter within which the
In the McNamara case,
transactions there were contained as there is in the present case. The contracts in the
McNamara case had no statutory base and, in so far as the Crown was also suing there
to enforce a surety bond, this was merely in pursuance of an administrative requirement
for the taking of such a bond to secure contract obligations in favour of the Crown.’ 41
After quoting from the reasons of the Court in that case, the Chief Justice
concludes: “[there is, therefore, a wide gulf between the situation in the
Rhine case, now before this Court, and the situation in the McNamara
case.” 42 Surely (assuming legislation to be a constitutional requisite) the
performance bond in McNamara Construction was given pursuant to
statute. If s. 101 does not constitutionally require that the statute create a
cause of action, what is it that the statute must do? And what purpose is
served by making such a distinction? Is the matter simply one of quantum of
statutory involvement, and how is that to be measured?
Rhine’s and Prytula’s Cases may represent a relaxation of the Quebec
North Shore Paper doctrine, but provide no justification for it, whether in
point of law or in point of policy. Nor is an acceptable test laid down. We are
told, perhaps obiter, that common law may sometimes be federal law. But
we are not told when; nor why in some instances, but not in others equally
subject to federal legislative authority. And, of course, we are apparently
told that statute law is (normally?) an essential ingredient, but not what its
function must be, nor, indeed, how conspicuous must be its presence. 43
13 Ibid., 387-8.
140 Supra, note 35.
141 Supra, note 133, 388.
142 ]bid., 389.
143 bid., 389-90; the nature and role of the federal statute administered in Prytula’s Case
are set out in these terms: “The legislation in the Prytula case, the Canada Student Loans
Act, and the Regulations thereunder provide for bank loans to students which carry a
Government guarantee of repayment to the lending bank upon the borrower’s default and
also entitle the Crown to be subrogated to the bank’s rights against the defaulter. As in the
case of the legislation in the Rhine case, so too here an agreement in a prescribed form must
be executed, save that here the agreement is between the student borrower and the lending
McGILL LA W JOURNAL
[Vol. 27
Appendix
Federal Causes of Action Act
Preliminary draft – 18 November 1976
An Act to create civil and criminal causes of action in conjunctions with other enactments
conferring, or purporting to confer, jurisdiction on federal courts.
I. This may be cited as the Federal Causes of Action Act.
2. In this Act,
“corresponding cause of action” means, in the case of a cause of action contemplated by
paragraph 8(i), the similar cause of action contemplated by paragraph 8(ii); and in the
case of a cause of action contemplated by paragraph 8(ii), the similar cause of action
contemplated by paragraph 8(i).
“court in Canada” means a court constituted by The British North America Act, 1867, or
established thereunder, or continued thereunder; whether such court sits in Canada or
elsewhere;
“enactment” has the same meaning as in the Interpretation Act;
“federal court” means a court in Canada other than a court established by the legislature
of a Province or continued under its authority;
“foreign laws” means laws other that the following:
(i) The British North America Act, 1867
(ii)
(iii) Imperial statutes not coming within (i) or (ii).
“Imperial statutes” means legislation, extending of its own force to Canada as part of the
law of Canada or of any part of Canada, made by or under the authority of the
Parliaments of England, Great Britain, or the United Kingdom;
“laws” includes both rules enacted by or under a statute, and common law rules;
“laws of Canada” has the same meaning as in s. 101 of The British North America Act,
1867;
“relief” includes relief of every description without exception: civil and criminal, public
and private; common law remedies and equitable remedies; including (for the avoidance
of doubt) declaratory relief and prerogative remedies.
laws enacted under, or continued under, its authority;
3. Whenever the following circumstances occur:
(i) an enactment confers, or purports to confer, upon a federal court, jurisdiction to
hear and determine a claim for relief in any matter; and
bank; the Government is not a direct party to the agreement but is a guarantor under the
statute and a subrogee of the bank under Regulations authorized by s. 130) of the statute.
As is correctly pointed out by the respondent in its factum, the Canada Student Loans Act
and the Regulations thereunder govern every aspect of the relationship between the
borrowing student, the lending bank and the guaranteeing government. Resort must
necessarily be had to the statute and Regulations to support any legal claims, whether by the
bank or by the Government, or to determine the liability of the borrowing student.
Moreover, subrogation of the Crown to the claim of the bank is expressly dealt with. The
prescribed form of agreement between the student and the bank emphasizes this by the
student’s signed assertion that “I understand my obligations under this Act and the
Regulations and … I shall repay my total indebtedness as required by the Act and
Regulations.” Once it is accepted, as it is here, that the Act and Regulations are valid, I do
not see how it can be doubted that there is here existing and applicable federal law to
underpin the jurisdiction of the Federal Court.”
1982]
CANADIAN FEDERAL COURTS
(ii) a right to that relief arises under laws other than laws of Canada; provided, that
where such other laws are foreign laws, a claim for relief thereunder is one which may
properly be heard and determined by a court in Canada;
(iii) a right to that relief does not, apart from this Act, arise under the laws of Canada;
and
(iv) the Parliament of Canada has legislative authority to create such a right:
then in every such case this section, operating with that enactment, creates that right.
4. Every right created by s. 3 is a complete cause of action created by Act of the Parliament
of Canada.
5. Save as the Parliament of Canada by reasonable intendment otherwise provides, every
right created by s. 3 is, as well in its essential character as in all its incidents, identical in
every respect with the corresponding right contemplated in paragraph 3(ii).
6. Sections three, four and five of this Act apply and have effect as if the laws contemplated
in paragraph 3(ii) were in terms expressly re-enacted at length in this Act.
7. No right created by s. 3 may be enforced elsewhere than in the court contemplated in
paragraph 3(i).
8. Proceedings brought or judgment obtained upon either
(i) a cause of action created by s. 3, or
(ii) a cause of action arising otherwise than upon s. 3,
shall suspend, supersede, or otherwise affect the corresponding cause of action as if the
two were one.
