Supreme Court of Canada
Linde Canadian Refrigerator Co. v. Saskatchewan Creamery Co., (1915) 51 S.C.R. 400
Date: 1915-03-15
The Linde Canadian Refrigerator Company (Plaintiffs) Appellants;
and
The Saskatchewan Creamery Company (Defendants) Respondents.
1915: March 8; 1915: March 15.
Present: Sir Charles Fitzpatrick C.J. and Idington, Duff, Anglin and Brodeur JJ.
ON APPEAL FROM THE SUPREME COURT OF SASKATCHEWAN.
Company—Dominion corporation—Provincial registration—Juristic disability—Right of action — Contract — Carrying on business within province—Legislative jurisdiction—R.S. Sask. 1909, c. 73, ss. 3, 10—Non-compliance with S.C. Rule—Costs.
A company, having its chief place of business in the Province of Quebec and incorporated under the Dominion statute with power to trade and carry on its business throughout the Dominion of Canada, did not comply with the provisions of the “Foreign Companies Act,” R.S. Sask., 1909, ch. 73, requiring registration previous to carrying on business within the Province of Saskatchewan. In the ordinary course of its business, it sold and brought certain machinery into the province and did the work of installing it therein for a price which included setting it up and starting it working. An action for the contract price was dismissed by the judgment of the trial court (6 West. W.R. 1159), and this judgment was affirmed by the Supreme Court of Saskatchewan, on the ground that the unregistered extra-provincial company was denied the right of action in the courts of the province by the tenth section of the “Foreign Companies Act.”
On appeal to the Supreme Court of Canada, the judgment appealed from (7 West. W.R. 89) was reversed.
Per Idington J.—The mere setting up and starting the working of the machinery by the extra-provincial company did not constitute the carrying on of business in the Province of Saskatchewan within the meaning of the “Foreign Companies Act.”
[Page 401]
Per Anglin J.—The installation of the plant was a substantial part of the consideration of the contract and, consequently, the unregistered extra-provincial company would be denied the right of enforcing its claim by action in the courts of the province under the provisions of the tenth section of the “Foreign Companies Act,” but, inasmuch as the legislation in question had the effect of depriving the extra-provincial company of the status, capacities and powers which were the natural and logical consequences of its incorporation by the Dominion Government, it is ultra vires of the provincial legislature and inoperative for the purpose of depriving the company of its right to maintain the action in the provincial courts. John Deere Plow Company v. Wharton ([1915] A.C. 330), applied.
Costs were refused the appellant, on the allowance of the appeal, in consequence of non-compliance with Supreme Court Rule No. 30 in respect of the printing of the statutes regarding which questions were raised.
APPEAL from the judgment of the Supreme Court of Saskatchewan, affirming the judgment of His Lordship Chief Justice Haultain, at the trial, by which the plaintiffs’ action was dismissed with costs.
The circumstances of the case are sufficiently stated in the head-note.
At the opening of the argument the court announced that there could not, in any event, be any costs allowed on the appellants’ factum on the appeal in consequence of non-compliance with the requirements of Supreme Court Rule No. 30 in respect to the printing of the statutes regarding which questions were to be raised on the appeal.
Atwater K.C. for the appellants.
The respondents were not represented at the hearing of the appeal.
The Chief Justice—I am of opinion that this appeal should be allowed without costs.
[Page 402]
Idington J.—The appellant is a company incorporated under a Dominion charter and carrying on its business in Montreal. The respondent is, or was, carrying on business at Moose Jaw, in the Province of Saskatchewan, in succession to another company which had a contract with appellant to supply it with a refrigerating plant, on the “Linde System,” and erect same on the foundation prepared by the company receiving it.
The appellant did so and the respondent, I infer, became, in some way not clear, the company that is to pay therefor.
The statement of defence alleged as follows:—
2. The defendant says that the plaintiff corporation is a foreign corporation and was at the time the alleged cause of action arose and still is unregistered in the Province of Saskatchewan under the “Foreign Companies Ordinance” and that the plaintiff is, therefore, not entitled to bring this action.
The learned trial judge held that the appellant, though otherwise entitled to recover, was barred thereunder by section 3 of the “Foreign Companies Act” of Saskatchewan.
That section is in its first sub-section as follows:—
3. Unless otherwise provided by any. Act no foreign company having gain for its object or a part of its object shall carry on any part of its business in Saskatchewan unless it is duly registered under this Act.
The only pleading on the record upon which such defence is rested is the second paragraph of the statement of defence which is quoted above.
This does not appear to me to raise such a defence as is contemplated by section 10 of said Act which reads as follows:—
10. Any foreign company required by this Act to become registered shall not while unregistered be capable of maintaining any action or other proceeding in any court in respect of any contract
[Page 403]
made in whole or in part in Saskatchewan in the course of or in connection with business carried on without registration contrary to the provisions of section 3 hereof.
The plea does not bring the appellant within this section and, therefore, the defence as pleaded (Should not be held a bar to the action. This may be technical and amendable, but no one is here to ask therefor and there are no merits in the defence.
The third sub-section of said section 3 relied upon below is as follows:—
(3) The taking orders by travellers for goods, wares or merchandise to be subsequently imported into Saskatchewan to fill such orders or the buying or selling of such goods, wares or merchandise by correspondence, if the company has no resident agent or representative and no warehouse, office or place of business in Saskatchewan, the onus of proving which shall in any prosecution under this section rest on the accused, shall not be deemed to be carrying on business within the meaning of this Act. (1903, ch. 14, sec. 3; 1903 (2), ch. 19, sec. 1.)
The respondent has filed no factum and has not appeared by counsel on this appeal. Counsel for appellant relied upon the recent case of the John Deere Plow Co. v. Wharton, decided since this case was heard below, and seeks some amendment to bring this case within that.
As there are many features of the Act upon which that case was decided, and the Act here in question and the respective facts relevant respectively to said Acts, which may distinguish the two cases, it would be most unfortunate to have the decision turn thereon without argument.
I do not think it is necessary to deal with the appeal from that point of view. The contract seems to be one which may well fall within the exception provided by said sub-section 3 of section 3.
[Page 404]
The appellant proved that it had no resident agent or representative and no office or place of business in Saskatchewan. The goods and machinery contracted for and other goods were shipped from Montreal and, on such reading and understanding of the contract as I am enabled to give it, I do not think the mere installation of the machinery so ordered, shipped and delivered, fairly falls within the meaning of the carrying on business in Saskatchewan. I cannot think it was intended to apply to the mere setting up and starting of machinery by a company doing no more in way of carrying on business than such acts involve. And if it did, that has been paid for, I imagine, or might be severable if we knew and understood the facts. The application of this Act made by the courts below would apply to many cases of mere agricultural machines and implements which are very commonly sold on terms of thus testing by starting them satisfactorily as we have found by experience in this court. The view of this court in the case of John Deere Plow Co. v. Agnew, does not seem to have been presented to the courts below.
It is also to be observed that the company’s contract provided as follows:—
Taxation:—All local or provincial taxes liable to be levied on outside companies or their employees to be paid by the purchaser.
The appellant, in any way one can look at it, was entitled to have within the Act (when acting in violation thereof) become licensed and then to proceed to recover from respondent what the trial judge found was justly due. The respondent would have had to pay, under the clause just quoted, the taxes; and the
[Page 405]
incidental expenses of procuring registration, is all that would have been involved.
If the words “maintaining any action” in the above quoted section were liberally interpreted, in any case the action would not have to be dismissed in such a way as to put an end to the appellant’s rights as it might if the legislation in question can be upheld by distinguishing it from the British Columbia legislation which certainly is of a more objectionable character than that involved in this case.
I think the appeal should be allowed, but, as directed at the argument, without costs.
Duff J.—J concur in allowing this appeal.
Anglin J.—The plaintiffs are a company incorporated by the Dominion of Canada with power to trade and carry on their business throughout the Dominion. Although the definition of “foreign company” in the “Foreign Companies Act,” R.S. Sask. (1909), ch. 73, is not as clear or precise as could be desired, doubtless it was meant to include, and probably does cover any Dominion corporation. This action is brought to enforce payment under a contract made with the plaintiffs in Saskatchewan.
The provincial courts, in my opinion property, have held that the installation by the plaintiffs, pursuant to the provisions of the contract sued upon, of the refrigerator plant which they sold to the defendants was a carrying on of a part of the plaintiffs’ business in Saskatchewan within the meaning of section 3, and, therefore, brought the contract itself within the purview of section 10 of the “Foreign Companies Act,” because it was a contract made in Saskatchewan in
[Page 406]
connection with business carried on without registration contrary to the requirements of section 3. I am, with deference, unable to read the statute as affecting only the contracts of companies which have resident agents or representatives, or warehouses, offices or places of business in Saskatchewan (section 3, sub-section 3). Companies not having resident agents or representatives, or warehouses, offices or places of business in Saskatchewan may, no doubt, though not registered, fill orders taken in Saskatchewan by travellers for goods, wares and merchandise to be subsequently imported into that province, or may make contracts by correspondence for the buying or selling of such goods, wares, or merchandise without rendering themselves subject to the provisions of the statute. But even such companies may not enforce, by action in the Saskatchewan courts, any contract made in whole or in part in Saskatchewan in connection with business carried on without registration contrary to the provision which requires that no foreign company having gain for its object shall carry on any part of its business in Saskatchewan unless registered. Although the installing of the plant may in the present case have been a comparatively insignificant part of that which the plaintiffs contracted to do, it was a substantial part of the consideration which they agreed to give to the defendants in return for their money. That installation they undertook to carry out, and it was in fact carried out, by their engineer. As put by Haultain C.J.:—
It is not a matter of contract by correspondence; it is not purely a matter of an order for goods to be made or to be taken by a travelling salesman. It is a contract for work as well as for material —for work to be done within the province that is subsequently done within the province by the plaintiff company, through their engineers who took charge of the installation of the plant.
[Page 407]
As pointed out by Mr. Justice Elwood, the installing of refrigerator plants sold by them was admittedly a part of the plaintiffs’ ordinary business. Nor was the installation here in question a solitary act of business done in Saskatchewan not indicating a purpose to carry on business in that province. Oakland Sugar Mill Co. v. Fred. W. Wolf Co.; Cooper Manufacturing Co. v. Ferguson. There was evidence that other plants had been installed by the plaintiffs in the province, and I cannot think that this evidence should be ignored, as is suggested by Elwood, J., merely because the defendants had failed to prove that the plaintiff company was not “registered” when these other transactions took place. Taking all the evidence into account, I think it sufficiently appears that what the plaintiff’s did in this case was with the purpose and in the course of pursuing or carrying on such business as it could obtain in the Province of Saskatchewan and was not an isolated act, such as has in some cases been held to be insufficient to warrant a conclusion that business was being carried on. It should be noted that what is prohibited by the Saskatchewan statute is not the carrying on of the business of the company, but the carrying on of any part of its business while it remains unregistered. I respectfully concur in the view of the learned Chief Justice that there was in connection with the contract sued upon a carrying on of a part of the business of the plaintiff company in contravention of the provisions of the “Foreign Companies Act.”
The question is therefore directly presented for
[Page 408]
decision whether it is intra vires of a provincial legislature to enact that, as a penalty for, or consequence of, non-compliance with a provincial statute requiring it to become registered, a Dominion company shall be denied the right to maintain actions in the provincial courts upon contracts made by it in the exercise of the powers conferred on it by its Dominion charter. In the John Deere Plow Co. v. Wharton, the Judicial Committee categorically decided that it is not, when it held (at page 341) that
those provisions of the “Companies’ Act” of British Columbia which are relied on in the present case as compelling the appellant company * * * to be registered in the province as a condition of exercising its powers or of suing in the courts, are inoperative for these purposes.
Their Lordships had already said (page 341):—
The province cannot legislate so as to deprive a Dominion company of its status and powers.
Further on they say (page 343):—
It might have been competent to that legislature to pass laws applying to companies without distinction and requiring those that were not incorporated within the province to register for certain limited purposes such as the furnishing of information. It might also have been competent to enact that any company which had not an office and assets within the province should under a statute of general application regulating procedure, give security for costs. But their Lordships think that the provisions in question must be taken to be of quite a different character, and to have been directed to interfering with the status of Dominion companies, and to preventing them from exercising the powers conferred on them by the Parliament of Canada, dealing with a matter which was not entrusted under section 92 to the provincial legislature. The analogy of the decision of this Board in Union Colliery Co. V. Bryden therefore applies. They are unable to place the limited construction upon the word “incorporation” occurring in that section which was contended for by the respondents and by the learned counsel who argued the case for the province. They think that the legislation
[Page 409]
in question really strikes at capacities which are the natural and logical consequences of the incorporation by the Dominion Government of companies with other than provincial objects.
No doubt the British Columbia statute contained objectionable provisions not found in the Saskatchewan Act, such as that requiring a foreign company to submit to a change in its corporate name as a condition of securing registration should the registrar deem it proper to demand such a change. But the sections of the Saskatchewan Act which are invoked by the defendants in this case I am unable to distinguish on any substantial ground from the corresponding provisions of the British Columbia legislation which were under consideration in the John Deere Plow Company’s Case. Legislation excluding Dominion corporations, because they are not registered in conformity with the requirements of the provincial statute, from access to the provincial courts for the purpose of enforcing contracts made by them in the exercise of their charter powers is something which, as I understand the opinion delivered by the Lord Chancellor, the Privy Council has explicitly declared to be ultra vires of a provincial legislature, because it
really strikes at capacities which are the natural and logical consequences of the incorporation by the Dominion Government
and
the status and powers of a Dominion company as such cannot be destroyed by provincial legislation.
I am for this reason of the opinion that this appeal should be allowed.
[Page 410]
Brodeur J.—I am of opinion that this appeal should be allowed with costs.
Appeal allowed without costs.
Solicitors for the appellants: Willoughby, Craig, McWilliams & Benyon.
Solicitors for the respondents: Caldwell & Fraser.
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