Hogg, P. W.

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York University, Osgoode Hall Law School

Osgoode Hall Law School of York University Osgoode Digital Commons Articles & Book Chapters Faculty Scholarship 1977 Constitutional Law -- Limits of Federal Court Jurisdiction -- Is There a Federal Common Law? P. W. Hogg Osgoode Hall Law School of York University Source Publication: Canadian Bar Review. Volume 55, Number 3 (1977), p. 550-556. Follow this and additional works at: https://digitalcommons.osgoode.yorku.ca/scholarly_works This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License. Recommended Citation Hogg, P. W. "Constitutional Law -- Limits of Federal Court Jurisdiction -- Is There a Federal Common Law?" Canadian Bar Review 55.3 (1977): 550-556. This Commentary is brought to you for free and open access by the Faculty Scholarship at Osgoode Digital Commons. It has been accepted for inclusion in Articles & Book Chapters by an authorized administrator of Osgoode Digital Commons. COMMENTSCOMMENTAIRESCONSTITUTIONAL LAW-LIMITS OF FEDERAL COURT JURISDIC-TION-IS THERE A FEDERAL COMMON LAw?-The Federal CourtActs not only conferred upon the new Federal Court of Canadathe jurisdiction formerly exercised by the Exchequer Court, italso conferred some important new jurisdiction on the FederalCourt.= This expansion of the jurisdiction of the federal courtsystem has given rise to a host of cases attempting to define thelimits of the jurisdiction . These cases mainly turn on the languageof the Federal Court Act . However, there is also a constitutionallimit to the jurisdiction which can be conferred on a federal court,and that is the subject of this comment .The British North America Act," by section 101, empowersthe federal Parliament to establish federal courts "for the betteradministration of the laws of Canada" . This language does notauthorize the establishment of courts of general jurisdiction akinto the provincial courts . Federal courts are confined to issuesarising under "laws of Canada" . It is well settled that the phrase"laws of Canada" does not mean all laws in force in Canadawhatever their source, but means federal laws . The clearest exam-ple of a "law of Canada" is a federal statute, including of coursea regulation or order made under a federal statute . Much of thesubject matter of the jurisdiction of the Federal Court is governedby federal statute law, and this part of the court's jurisdictionraises no constitutional issue . But some of the subject matter ofthe court's jurisdiction is governed by provincial statute law ori S.C ., 1970-71-72, c. 1 .2 Perhaps most important is the new power conferred by ss 18 and28 to review the decisions of federal officials and agencies . Also importantis the new power conferred by s. 23 over certain bills of exchange andpromissory notes, aeronautics and interprovincial undertakings .3 (l867), 30 & 31 Vict ., c. 3	(U.K.) .1977]	Commentaires 551by . the common law, and this part of the court's jurisdiction doesraise a constitutional issue.Until_ recently there was substantial judicial support for. theview that a federal court could be given jurisdiction over anymatter in relation to which the federal Parliament had legislativecompetence,, even if that matter was not in fact regulated byfederal statute law. ®n this basis the "laws of Canada" couldinclude a rule . of provincial statute law or a rule of the commonlaw if its subject matter was such that the law could have beenenacted or adopted by the federal Parliament .4 This test of federallegislative competence gave to the undefined expression "laws ofCanada" a meaning which was sound in principle and relativelyeasy to apply in practice . Yet, in two recent cases, the SupremeCourt of Canada has rejected the test-and without substitutinga satisfactory alternative..The first of the two eases is Quebec North Shore Paper Co.v. Canadian Pacific (1976), which was an action for damagesbrought in the Federal Court by the Canadian Pacific railwayagainst the Quebec North Shore Paper Co., alleging the breachof a contract to build a marine terminal. The building of thisfacility by the paper company was part of a larger contract underwhich the railway undertook to transport the company's newsprintby water and land from a plant in Quebec to newspaper housesin Chicago and blew York . The contract was made in Quebecand it specifically provided that it was to be . interpreted inaccordance 'with the laws of Quebec .Section 23 of the Federal Court Act purported to conferjurisdiction on the Federal Court "in all cases in which a claimfor relief is made or a remedy is sought under an Act of theParliament of Canada or otherwise in relation to . . . works andundertakings . . . extending beyond the limits of a province . . ." .This language was literally apt to include Canadian Pacific's4 Consolidated Distilleries v . . The King, [1933] A.C. 508 is ambiguouson this point, but see Logan v. The King, [1938] 3 D.L.R. 145, at p. 155,per Kerwin J . ; Schwella v . The Queen, [1957] Ex . C.R . 226, at p. 233,per Thurlow J . ; The Queen v . J . B . & Sons Co., [1970] S.C.R. 220,at pp . 232-233, per Pigeon J . ; Robert Simpson Montreal v . Hamburg-Amerika, [1973] F.C . 1356, at pp . 1360, 1366, per Jackett C.J . ; QuebecNorth Shore Paper Co. v . Canadian Pacific, [1976] 1 F.C . 646, atpp . 652-653, per Le Dain J . ; McNamara Construction v . The Queen, [1976]2 F.C . 292, at p . 303, per Thurlow J ., at p. 313, per Ryan J . The lasttwo decisions have now been reversed by the Supreme Court of Canada ;they are the subject of this comment .5 (1976), 71 D.L.R . (3d) 1l1 .552	THE CANADIAN BAR REVIEW [VOL. LVaction . To be sure, the federal Parliament had not enacted anylaws which would apply to the contract . However, as a matterof statutory interpretation, the words "or otherwise" in section 23contemplated cases governed by law other than federal statutelaw . And, as a matter of constitutional , law, the test of federallegislative competence was satisfied : because the contract wasfor the international transportation of goods, it was within thelegislative competence of the federal Parliament . For this reasonthe Federal Court of Appeal had little difficulty in deciding thatsection 23 of the Federal Court Act was constitutionally effectivein conferring jurisdiction over the action . 6 Le Dain J . for thecourt reasoned that, in its application to a contract within federallegislative jurisdiction, the Quebec civil law was a "law of Canada" .The Supreme Court of Canada unanimously reversed thedecision of the Federal Court of Appeal . Laskin C.J., who wrotefor the full Supreme Court bench of nine judges, held that theQuebec civil law could not be regarded as a "law of Canada"unless it had actually been enacted or adopted by the federalParliament. He held that the words "for the better administrationof the laws of Canada" in section 101 of the British NorthAmerica Act did not mean matters within federal legislative com-petence . Instead, he said, "they carry, in my opinion, the require-ment that there be applicable and existing federal law . . . uponwhich the jurisdiction of the Federal Court can be exercised" . 7The Quebec law of contract, unlike that of the otherprovinces, rests on the statutory foundation of the Quebec CivilCode, which contains a code of the law of contract includingrules of interpretation . Strictly speaking, therefore, all that wasdecided in Quebec North Shore was that provincial statute lawcould not be a "law of Canada" . The question whether any partof the common law could be regarded as federal did not haveto be decided . However, Laskin C.J.'s opinion made no mentionof the statutory basis of the Quebec civil law, which suggeststhat the result would have been the same in a common lawprovince where the law of contract was not statutory. The correct-ness of this inference is confirmed by the second recent decisionof the Supreme Court of Canada .The second case is McNamara Construction v . The Queen( 1977) . 11 This was an action for damages brought in the Federal'> Supra, footnote 4 .7 Supra, footnote S, at p. 120.8 Supreme Court of Canada, January 25th, 1977, not yet reported .1977]	Comments 553.Court by the Crown in right of Canada (hereinafter referred to asthe federal Crown) against a builder and an architect, allegingthe breach of a' contract to build a penitentiary in Alberta. Onceagain, the Federal Court Act was literally apt to include theaction, because section 17(4) purported to confer jurisdictionover "proceedings of a civil nature in which the Crown or theAttorney-General of Canada claims relief". It was commonground that there was no federal statute law in point, and thatthe applicable law was the common law. However, the FederalCourt of Appeal applied the test of federal legislative competence(over the federal Crown (section 91(1A)) and over peniten-tiaries (section 91(28))) to hold that the applicable commonlaw was "federal".9 The Supreme Court of Canada unanimouslyreversed, holding that the applicable law was not federal, andaccordingly that the Federal Court could not, as a matter ofconstitutional law, assume jurisdiction over the proceedings.Laskin C.J . for the court followed Quebec North Shore in holdingthat the fact of federal legislative competence over the contractdid not supply a sufficient constitutional basis for jurisdiction .Nor did the fact that the federal Crown was the plaintiff in theproceedings, because no "principle of law peculiar to it" wasrelevant.l° Therefore, section 17(4) of the Federal Court Acthad to be "read down" so as to remain within the limits prescribedby section 101 of the British North America Act.Do the decisions in Quebec North Shore and McNamaraConstruction mean that there is no such thing as a federal commonlaw," and that the federal Parliament may only confer upon theFederal Court jurisdiction over controversies governed by federalstatute law?12 An affirmative answer would at least have theappeal of providing a clear definition of "laws of Canada" insection 101 of the British North America Act : "laws of Canada"would consist exclusively of federal statute law. But this does not') Supra, footnote 4.io Supra, footnote 8, at p. 9. On this point the court had to overrulea prior decision of its own, Farwell v. The Queen (1894), 22 S.C.R . 553,although Laskin C.J . also suggested that Farwell had not had to decidethe point.ii The existence of a federal common law is also relevant to thescope of the Canadian Bill of Rights, although the closing language ofs. 5(2) of the Bill, R.S.C., 1970, Appendix III (which seems apt to includecommon law as well as pre-confederation statute law) makes clear thatfederal legislative competence is the test .12 For the situation in the United States and Australia, see Hogg,Liability of the Crown (1971), pp . 224-226.554	LA REVUE DU BARREAU CANADIEN [VOL. LVseem to be the meaning of the two cases, because in each ofthem Laskin C.J . expressly acknowledged the existence of abody of federal common law . In Quebec North Shore he gave asan example the law pertaining to the federal Crown (insofaras it is not statutory) .la In McNamara Construction, where thefederal Crown was the plaintiff, he explained that example asmeaning the law pertaining to Crown "liability", not Crown rights :the difference is that "there were existing common law rulesrespecting Crown liability in contract and immunity in tort, ruleswhich have been considerably modified by legislation" ; whereas,claims by the Crown were governed by the ordinary law. 14 Butif the distinction between rights and liabilities is crucial, theresult is highly inconvenient . The Federal Court may be properlyseized of an action against the federal Crown, but the federalCrown's counterclaim and third party notice will require aseparate action in the provincial court system . 15Is there any principled basis for the distinction betweenCrown rights and Crown liabilities? Laskin CT's example ofCrown "immunity" in tort is not helpful : Crown liability in tortdid not exist at common law and it now depends upon the factthat the federal Crown has been made liable by a federal statute;lsalthough the statute does not codify the rules which are applicable,the relevant rules of the common law have been regarded asadopted by the federal statute. 17 Laskin CT's example of Crownliability in contract is even less helpful : Crown liability in contractdid exist at common law ; and, while there were a few specialrules applicable to the Crown, for the most part Crown liabilityin contract depended upon the same rules of the common law asapplied between subject and subject."' It was (and is) no differentfrom the Crown's right to sue in contract, which also dependedfor the most part upon the same rules of the common law asapplied between subject and subject . Certainly, there were somecommon law rules which were peculiar to the Crown, but thisdoes not support a distinction between Crown liabilities and13 Supra, footnote 5, at pp. 118, 120.14 Supra, footnote 8, at p . 9 . .15 Laskin C.J ., supra, footnote 8, at p . 10 said that proceedings forcontribution or indemnity could be competent "in so far as the supportingfederal law embraced the issues arising therein" . Presumably the qualifyingphrase will exclude most such proceedings .is Crown Liability Act, R.S.C ., 1970, c . C-38, s . 2 ; Hogg, op . cit .,footnote 12, ch . 5 .17 Gibson, Interiurisdictional Immunity in Canadian Federalism (1969),47 Can. Bar Rev. 40, at pp . 46-49 .18 Hogg, op . cit., footnote 12, ch . 4.1977]	Commentaires 555Crown rights because the special rules concerned Crown rightsas well ~as Crown liabilities.l 9 Are we somehow supposed tosegregate those rules which are peculiar to the federal Crown andcall them "federal" laws, while characterizing the rules which arethe same as the rules applicable between subject and subject as"provincial" laws? As a method of allocating jurisdiction betweentwo court systems, such a distinction seems to me to be utterlyunworkable .In any event, what reason can be given for denying that thecommon law in fields of .federal legislative jurisdiction is federallaw-part of the "laws of Canada"? In the case of the federalCrown, the common law can probably only be changed by thefederal Parliament . A provincial law purporting to diminish thefederal Crown's rights, or to increase its liabilities, would probablybe held incompetent to the province, and if couched n generalterms would probably be held inapplicable to the federal Crown.2oIn what sense is it plausible to characterize the common lawpertaining to the federal Crown as provincial? In the case ofpenitentiaries, or international transportation (and most othermatters within federal jurisdiction), the common law can bechanged by the provincial Legislatures as well as by the federalParliament . But there is no reason to characterize the lawpertaining to these matters as provincial, rather than as federaland provincial . Surely, in fields of concurrent authority thecommon law has a double aspect, and the dual classification wouldbe more appropriate.In my opinion the only workable and principled test for a"law of Canada" is the test of federal legislative competencewhich prevailed before Quebec North' Shore and McNamaraConstruction . Indeed, this test is confidently asserted to be thelaw in Laskin's casebook on constitutional law, where he says:"Laws of Canada" must also include common law which relates tois For example; at common law the Crown was immune from discovery,production of, documents and costs, whether it was suing or being sued,limitation periods did not apply to suits by the Crown, and there werespecial prerogative remedies available only to the Crown: op . cit ., 4bid .,pp . 28-37; the doctrine of Crown privilege was available whether theCrown was suing or being sued (and even when the Crown was not aparty at all) : op . cit., ibid., p. 41 ; and the rule that the Crown was notbound by statutes except by express words or necessary implicationcould- occasionally be relevant in suits by the Crown as well as suitsagainst the Crown : op. cit., ibid ., pp . 180-183.=0 Gairthier v. The King (1918), 56 S.C.R . 176, but compare DominionBuilding Corp . v. Tlre King, 119331 A.C . 533 ; and see Gibson, op . cit.,footnote 17, at p. 52 .556	THE CANADIAN 'BAR REVIEW [VOL. LVthe matters falling within classes of subjects assigned to the Parlia-ment of Canada .21And, later:But, because the common law is potentially subject to overridinglegislative power, there is federal common or decisional law and pro-vincial common or decisional law according to the matters respectivelydistributed to each legislature by the B.N.A. Act.'-'2Neither Quebec North Shore nor McNamara Constructiongive any reason for rejecting this sensible approach. It is, ofcourse, true that the competence test has the effect of enablingthe Parliament to confer a broad jurisdiction on the FederalCourt of Canada, and thereby to further develop a dual courtsystem in Canada . Like many lawyers, I think that an extensivedual court system is an unwise development. But, as Laskin C.J .recently reminded us in the Anti-Inflation Reference,-3 the courtshould not be concerned with "the wisdom or expediency orlikely success of a particular policy expressed in legislation" .In any event the chief mischiefs of a dual court system are thenecessity of two sets of proceedings to dispose of what is essentiallyone dispute, and the fostering of controversy as to which systemhas jurisdiction over a particular proceeding . Both those mischiefsare surely better remedied by the relatively clear rule of federallegislative competence than by the opaque rule now announcedby the Supreme Court of Canada.= 4P. W. HOGG*LABOUR LAW- CONSTITUTIONAL LAW-THE BASIC JURISDIC-TION OF THE CANADA LABOUR RELATIONS BOARD-IS IT CON-CURRENT WITH FEDERAL LEGISLATIVE POWER?The Background of the Board's Basic JurisdictionAs a result of the 1925 Privy Council decision in TorontoElectric Commissioners v. Snider' and the subsequent decision of=1 Laskin, Canadian Constitutional Law (4th ed . rev., 1975), pp . 792-793 ; the same passage appears in the 3rd ed . rev., 1969, at p. 817.22 Op . Cit., ibid . (4th ed .), p. 793; (3rd ed .), p. 817. See also theadvocacy of a federal common law in Laskin, The British Tradition inCanadian Law (1969), pp . 129-130.-3 [19761 2 S.C.R . 373, at p. 425.°} 1 am grateful to Professor John Evans, who read a draft versionof this comment and made many suggestions for its improvement .'- P. W. Hogg, of the Osgoode Hall Law School, York University,Toronto.1 [1925] A.C . 396, [1925] 2 D.L.R. 5, [1925] 1 W.W.R . 785 (P.C .) .

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Constitutional Law -- Limits of Federal Court Jurisdiction -- Is There a Federal Common Law?

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