Canadian National Railways v. Croteau, [1925] SCR 384

Supreme Court of Canada

Canadian National Railways v. Croteau, [1925] S.C.R. 384

Date: 1925-05-05

Canadian National Railway Company (Garnishee) Appellant;

and

J. J. Croteau (Plaintiff) Respondent.

and

W. Cliche (Defendant).

1925: February 26; 1925: May 5.

Present: Anglin C.J.C. and Idington, Duff, Mignault, Newcombe and Rinfret JJ.

Constitutional law—Practice and procedure—Canadian National Railways—Garnishment—Proceeding—Fiat—Special leave of appeal—Provincial appellate courts—Jurisdiction—Discretion—Canadian National Railways Act (1919) 9-10 Geo. V, c. 13, s. 15—Supreme Court Act, 10-11 Geo. V, c. 32, s. 41.

The discretion conferred on the provincial courts of appeal by section 41 of the Supreme Court Act under which special leave to appeal to this court may be granted is untrammelled and free from restriction save such as is implied in the term "special leave."

A writ of garnishment attaching moneys owed by the Canadian National, Railway Corporation to a judgment debtor in its employment is a "proceeding" within the provisions of s. 15 of the Canadian National Railways Act and may therefore issue "without a fiat" from the Crown. (Idington J. dissenting).

APPEAL from a decision of the Court of King's Bench, appeal side, province of Quebec, affirming the judgment of the Superior Court and maintaining a seizure by garnishment of defendant's wages in the hands of the appellant.

The material facts of the case are fully stated in the judgments now reported.

Gravel K.C. for the appellant.

R. Langlais K.C. for the respondent.

The judgment of the majority of the court (Anglin C.J.C. and Duff, Mignault, Newcombe and Rinfret JJ.) was delivered by

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Duff J.—This appeal raises a question that chiefly turns upon the scope and effect of s. 15 of 9-10 Geo. V, c. 13, which is in the following words:—

(1) Actions, suits or other proceedings by or against the company in respect of its undertaking or in respect of the operation or management of the Canadian Government Railways, may, in the name of the company, without a fiat, be brought in, and may be heard by any judge or judges of any court of competent jurisdiction in Canada, with the same right of appeal as may be had from a judge sitting in court under the rules of court applicable thereto. Any defence available to the respective corporations (including His Majesty) in respect of whose undertaking the cause of action arose shall be available to the company, and any expense incurred in connection with any action taken or judgment rendered against the company in respect of its operation or management of any lines of railway or properties, other than its own lines of railway or properties, may be charged to and collected from the corporation in respect of whose undertaking such action arose. Nothing in this Act shall affect any pending litigation.

(2) Any court having under the statutes or laws relating thereto jurisdiction to deal with any cause of action, suit or other proceeding, when arising between private parties shall, with respect to any similar cause of action, suit or other proceeding by or against the company, be a court of competent jurisdiction under the provisions of this section.

Cliche was a person employed in the operation of the Canadian Government Railways, as defined by s. 10 of this Act, and certain moneys were owing to him as wages earned in his employment when the respondent, having recovered a judgment against him for $310.80, proceeded to take out a writ of garnishment attaching these moneys, in the Superior Court of Quebec.

The appellant company objected that the proceeding was not competent, inasmuch as it was an attempt to garnish the wages of an employee of the Crown, and that s. 15 did not authorize such a proceeding. The issue thus raised was decided in favour of the respondent by the unanimous judgments of the Quebec courts.

The Court of King's Bench, exercising the authority conferred by s. 41 of the Supreme Court Act, gave leave to appeal to this court. It may be observed in passing that the learned judges of the Court of King's Bench appear to have been under an impression that their jurisdiction under that section was limited by certain rules supposed to be laid down in this court touching the exercise of that jurisdiction. This court has no authority, and, of course, never pretended to exercise any authority, to lay down rules restricting the scope of the jurisdiction or governing

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the exercise of the jurisdiction conferred by s. 41 upon provincial courts of appeal. The statute gives a discretion to such courts, and, where a statutory discretion is conferred upon a court, it is not within the authority of any other court to give directions as to the manner in which the discretion is to be exercised. Attorney General v. Emerson[1]. On the other hand, one of the learned judges of the Court of King's Bench would have refused leave to appeal because this case did not, in his opinion, fall within any of the sub-clauses, (a) to (f), of the proviso to s. 41 of the Supreme Court Act. That proviso, with its several sub-clauses, has to do only with the granting of special leave to appeal by this court where it has been refused by the provincial court of appeal, and in nowise affects the discretion conferred on the provincial court by s. 41. That discretion is untrammelled and free from restriction, save such as is implied in the term "special leave."

The general object of the Act of 1919 is stated in the preamble, which, after reciting that His Majesty, on behalf of the Dominion of Canada, has acquired control of the Canadian Northern Railway Company and the various constituent and subsidiary companies comprising the Canadian Northern System, proceeds to declare it to be expedient

to provide for the incorporation of a company under which the railways, works and undertakings of the companies comprised in the Canadian Northern System may be consolidated and, together with the Canadian Government Railways, operated as a national railway system.

In order to effectuate this purpose, the Governor in Council is authorized to nominate directors, not fewer than five and not more than fifteen, with such remuneration as may be determined by the Governor in Council, who, together with their successors, shall constitute the corporation known as the Canadian National Railway Company. Directors are removable for cause by the Governor in Council, by whom also vacancies are to be filled. The Governor in Council is authorized also to declare that the company shall have a capital stock, with or without shares, such stock being, unless otherwise ordered, vested in the Minister of Finance, on behalf of His Majesty.

The Act also provides that no director of the company shall be under any personal responsibility to any share-

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holder, director, officer or employee of the company, or to any other person, or, except with the approval of the Governor in Council, subject to any pecuniary penalty under the provisions of any statute, in respect of his office or any act done or omitted to be done by him in the execution thereof. By s. 11 the Governor in Council is authorized to entrust to the company

the management and operation of any lines of railway or parts thereof, and any property or works of whatsoever description, or interests therein, and any powers, rights or privileges, over or with respect to any railways, properties or works, or interests therein, which may be from time to time vested in or owned, controlled or occupied by His Majesty, or such part or parts thereof, or rights or interests therein, as may be designated in any order in council, upon such terms and subject to such regulations and conditions as the Governor in Council may from time to time decide; such management and operation to continue during the pleasure of the Governor in Council and to be subject to termination or variation from time to time in whole or in part by the Governor in Council.

Powers are also given to the company, with the approval of the Governor in Council, to construct and operate railway lines, branches and extensions, and to issue bonds, debentures and debenture stock. By s. 13, the provisions of the Railway Act, with certain exceptions not material, are made applicable to the company and its undertaking; and by s. 14 it is declared that the provisions of the Railway Act respecting the operation of a railway shall apply to any of the Canadian Government Railways, the operation and management of which may be entrusted to the company, and by s. 9, where any consent or approval by shareholders of a company is required by the Railway Act, such consent or approval may be given by the Governor in Council.

Prima facie, by force of the provisions of the Interpretation Act, the incorporation of the company itself invests it with the capacity to sue and to be sued in its own name Section 15 appears to proceed upon the assumption that the company, when acting within the scope of its powers, is responsible for the acts of its employees within the scope of their authority. The section, on any hypothesis, cannot be regarded as very happily framed, but there does not appear to be any satisfactory reason for limiting the scope of the word "proceedings" in the first sentence of it in such a way as to exclude the process of attachment.

It seems difficult to make good any distinction between, moneys payable by the company "in respect of its undertaking" and moneys payable

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in respect of the operation or management of the Canadian Government Railways.

Section 15 recognizes the enforceability of the obligation in both cases alike. True, by s. 16 wages of the employees of the Canadian Government Railways are payable out of moneys which are furnished either directly out of the Consolidated Revenue Fund, or from the "revenues and receipts" of the Government Railways, and the surplus of these, after providing for the expenses incident to the operation and management of such railways, belongs to the Consolidated Fund; nevertheless, s. 15 does recognize, as already stated, an obligation on the company to pay. Payment of such debts is one of the purposes for which the fund provided for by s. 16 is put into the company's hands.

The real difficulty in attaching moneys payable by the Crown to a third person lies in the inability of the courts to make an order against the Crown. Generally speaking, moneys payable by the Crown are subject to equitable execution, the appointment of a receiver operating as an injunction prohibiting the judgment debtor from receiving the fund attached. The process involves no order against the Crown. Only by leave of the court and, of course, after fiat granted, can the judgment creditor proceed to enforce the judgment debtor's claim by petition of right. The position may be illustrated by reference to sequestration. Sequestration will lie to attach moneys payable by the Crown, subject to this, that no order against the Crown can be made. Willcock v. Terrell[2]. Here, again, the process operates only indirectly, by precluding the judgment debtor from receiving payment.

Now s. 15, whatever its limitations, does contemplate judgments against the company for the payment of money in actions arising out of the operation and management of the Government Railways, as well as in other cases. Moreover, the use of the word "suits" in addition to "actions" indicates that equitable proceedings—proceedings of that class which normally culminate in a judgment in personam—are contemplated by the section. The necessary effect of s. 15 would, therefore, appear to be that it removes the impediment which normally prevents the attachment of public moneys owing to a judgment debtor; and it would therefore

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 appear to be in harmony with the principle and policy of the section to attribute to the word "proceedings" a scope which would bring within the ambit of the section the kind of proceeding that is in question here.

As opposed to this view, an argument is based upon the presence in s. 15 of the words "without a fiat." It is suggested that these words point to an intention to limit the operation of the section to proceedings of a like character with those which, according to the usual practice, would be competent to a suppliant, as against the Crown, on a fiat being granted. Now the phrase "without a fiat" grammatically applies to proceedings by the company as well as to proceedings against the company. As applied to the former, it seems, in this context, to be almost, if not quite, meaningless. Even as applied to proceedings against the company, it is not a very apt expression. The more probable inference seems to be that it was introduced ex majori cautela to quiet the apprehensions of some not very highly instructed person—a not uncommon thing, as Lord Herschell observes in Commissioners of Income Tax v. Pemsel[3].

If the intention was to limit the scope of the section, as suggested, it seems strange that the meaning of the section should be left to be gathered by doubtful inference; and, on the whole, the better view seems to be that such was not the intention.

It has not been argued, it should be added, that by any rule of public policy the wages attached were inalienable, and no opinion is expressed upon any such question.

The appeal should be dismissed with costs.

Idington J. (dissenting).—The appellant is a company incorporated by virtue of c. 13 of 9-10 Geo. V of the Dominion Parliament as an instrument of the Dominion Government to aid it in discharging duties devolving upon the said Government in relation to the management and operation of certain specified railways.

The respondent Croteau claims that Cliche, the above-named defendant in the Superior Court of Quebec, owes him and that he is entitled to garnishee the appellant in respect of wages due by the Intercolonial Railway, a Government-owned

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railway. The appellant objects to recognizing any such mode of execution against it.

By s. 18 of c. 35 of the Revised Statutes of Canada, 1906, which reads as follows

18. Moneys in the hands of an officer, employees or servant of the Minister, as an officer or servant of His Majesty, due or payable by His Majesty to any person, or out of which any payment on behalf of His Majesty is to be made, and given to or being in the possession of such officer, employee or servant for the purpose of making such payment, shall not be subject to any execution, attachment or garnishee process.

2. If any such officer, employee or servant is served with any execution, attachment or garnishee process in regard to such moneys, the same may be set aside, with costs, by any court of competent jurisdiction,

it would seem clear that such a proceeding is expressly prohibited.

The respondent points to s. 15 of said Act, c. 13 of 9-10 Geo. V, which reads as follows:

15. (1) Actions, suits or other proceedings by or against the company in respect of its undertaking or in respect of the operation or management of the Canadian Government Railways, may, in the name of the company, without a fiat, be brought in, and may be heard by any judge or judges of any court of competent jurisdiction in Canada, with the same right of appeal as may be had from a judge sitting in court under the rules of court applicable thereto. Any defence available to the respective corporations (including His Majesty) in respect of whose undertakings the cause of action arose shall be available to the company, and any expense incurred in connection with any action taken or judgment rendered against the company in respect of its operation or management of any lines of railway or properties, other than its own lines of railway or properties, may be charged to and collected from the corporation in respect of whose undertaking such action arose. Nothing in this Act shall affect any pending litigation.

(2) Any court having under the statutes or laws relating thereto jurisdiction to deal with any cause of action, suit or other proceeding, when arising between private parties shall, with respect to any similar cause of action, suit or other proceeding by or against the company, be a court of competent jurisdicton under the provisions of this section.

I cannot see that this section ever was intended to repeal the said s. 18, or touch upon such questions as therein referred to, or in any way to justify such a proceeding as the garnishee in question.

There was no fiat recognizing this proceeding and the local legislature of a province cannot give any power to its courts to interfere with the rights of the Crown on behalf of any work done under or by virtue of Dominion legislation beyond what that expressly empowers it to do as in and under, for example, such as above quoted, and which, as already stated, is not wide enough.

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Nor do I think the s. 14 of the said Act of 9-10 Geo. V, c. 13, helps respondent.

I would therefore allow this appeal with costs throughout and dismiss said garnishee.

Appeal dismissed with costs.

Solicitors for the appellant: Pentland, Gravel, Thompson & Hearn.

Solicitors for the respondent: Langlais, Langlais & God-bout.