Thorne's Hardware Ltd. v. The Queen, [1983] 1 SCR 106

SUPREME COURT OF CANADA

Thorne's Hardware Ltd. v. The Queen, [1983] 1 S.C.R. 106

Date: 1983-02-08

Thorne's Hardware Limited, Kent Lines Limited, Canaport Limited and Irving Oil Limited Appellants;

and

Her Majesty The Queen and National Harbours Board Respondents.

File No.: 16381.

1982: May 19; 1983: February 8.

Present: Ritchie, Dickson, Beetz, Lamer and Wilson JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Administrative law — Judicial review — Order in Council — Extension of harbour limits — Limits extended to include private harbour facilities — Whether Order in Council passed for improper motives

Whether Order in Council valid — National Harbours Board Act, R.S.C. 1970, c. N-8, s. 7 — Harbour of Saint John Boundaries Determined, SOR/77-621.

Shipping — Harbours — By-law — Imposition of harbour dues — Vessels using private harbour facilities

Whether National Harbours Board exercising jurisdiction over private property — Riparian rights — Tolls or taxes — Whether By-law applicable to appellants — National Harbours Board Act, R.S.C. 1970, c. N-8, ss. 8, 14(1)(e) — Tariff of Harbour Dues, SOR/69-111.

Appellants challenged in the Federal Court (1) the validity of an order in council extending the limits of the port of Saint John so as to include appellants' berth and harbour facilities and (2) the applicability to them of a National Harbours Board's By-law imposing harbour dues on all vessels entering or using the port. The Trial Division held the Order in Council intra vires the powers of the Governor in Council but the By-law to be inapplicable to the appellants. The Court of Appeal disagreed with the trial judge on the second point. Hence this appeal to determine whether the appellants are obliged to pay harbour dues.

Held: The appeal should be dismissed.

The appellants alleged that the Order in Council extending the limits of St. John Harbour had been passed for improper motives to increase harbour revenues. It is neither the Court's duty nor its right to investigate the federal Cabinet's motives. There is evidence

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that increase in revenues was one consideration, but not the only one. The trial judge found that the rationalization of marine activity in the area was also an objective. The matter was one of economic policy and politics. The Court cannot inquire into the validity of the beliefs upon which the Governor in Council acted. It should also be noted that the appellants were given ample opportunity to express their opposition. The appellants argued further that s. 7 of the National Harbours Board Act, which authorizes expansion of harbour limits, requires it to be for the "administration, management and control" of the harbour, and that expansion for increased revenues did not fall within this. However, rationalization of marine activities, as found by the trial judge, does clearly fall within s. 7. Accordingly, the appellants' challenge to the validity of the Order in Council extending St. John Harbour fails.

The appellants' second argument is that the harbour tolls do not apply to them. They invoke s. 8 of the National Harbours Board Act which says that the Board has no jurisdiction or control over private property or rights. The appellants claimed that harbour tolls interfered with their right of access to their private facilities. There is no authority to say that an economic interference with a riparian right is actionable. In any event, the right interfered with is the right of approaching from a distance, i.e. entering the harbour—a public right—not the private right of access to facilities. Thus the appellants' argument of expropriation without compensation also fails as there was no expropriation. Even if the Board were interfering with a private right of access, it is not exercising jurisdiction or control over private property or rights as prohibited by s. 8. Furthermore, s. 8 stipulates "unless otherwise specifically provided for"; s. 14(1)(e) specifically allows the imposition of tolls.

The appellants further submitted that the charge is, against it, a tax (for the purpose of raising revenue) not a toll (for the purpose of covering costs of services) and that only the latter is authorized. The appellants contended they were not being provided any services. Assuming, arguendo, that the Board is restricted to levying charges to cover the costs of services, it does not follow that the charge must be related to the cost of services to that particular vessel. There is nothing to indicate that the tolls are imposed to cover anything other than the costs of services. The charges are not ultra vires as taxes. The appellants are subject to the tolls.

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Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735; R. v. National Fish Co., [1931] Ex. C.R. 75; Minister of Health v. The King (on the Prosecution of Yaffe), [1931] A.C. 494; Attorney-General for Canada v. Hallet & Carey Ld., [1952] A.C. 427; Reference re Chemical Regulations, [1943] S.C.R. 1; North Shore Railway Co. v. Pion (1889), 14 App. Cas. 612; Lyon v. Fishmongers' Company (1876), 1 App. Cas. 662; Chaplin & Co. v. Westminster Corporation, [1901] 2 Ch. 329; Attorney-General v. Conservators of the Thames (1862), 1 H & M Ch. 1; Manchester Ship Canada Co. v. Upper Mersey Navigation Commissioners, [1958] 2 Lloyd's Rep. 81; Foreman v. Free Fishers of Whitstable, (1869) L.R. 4 H.L. 266, referred to.

APPEAL from a judgment of the Federal Court of Appeal, [1981] 2 F.C. 393, (1980) 124 D.L.R. (3d) 622, 38 N.R. 293, allowing the Board's appeal and dismissing appellants' cross-appeal from a judgment of Dubé J., [1980] 2 F.C. 3, (1980) 109 D.L.R. (3d) 94. Appeal dismissed.

Raynold Langlois and Michel St-Pierre, for the appellants.

Jean-Claude Ruelland and Paul Plourde, for the respondents.

The judgment of the Court was delivered by

DICKSON J.—The issue is whether the appellants are obliged to pay harbour dues imposed by the National Harbours Board on ships entering or using the port of Saint John, New Brunswick. Two questions arise: (i) is federal Order in Council P.C. 1977-2115 extending the limits of the port of Saint John so as to include the appellant's riparian property "void, unlawful, unjust, discriminatory and ultra vires" the Governor in Council?; (ii) is National Harbours Board By-law B-1, Tariff of Harbour Dues, imposing harbour dues on all vessels entering or using the port of Saint John, applicable to the appellants in the circumstances of this case?

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I

Facts and Procedural History

The appellants are Irving Oil Limited and its wholly owned subsidiaries, Thorne's Hardware Limited, Kent Lines Limited and Canaport Limited. For many years Irving Oil received crude oil shipments at the port of Saint John. In 1969 Irving decided to build new deep water liquid bulk terminal facilities beyond the territorial limits of the port. To that end Thorne's Hardware acquired a water lot of 1,380 acres at Mispec Point outside the harbour.

In 1971 Canaport Limited acquired part of the water lot. Facilities were constructed, at a cost of $43,000,000 for crude oil tankers operated by Kent Lines Limited which came to discharge cargoes of oil into storage tanks adjacent to the water lot. The petroleum products were taken by pipeline from the storage tanks to the Irving Oil refinery at Courtenay Bay, some five miles from Mispec Point.

On July 27, 1977 the Governor in Council passed Order in Council P.C. 1977-2115 extending the limits of the port of Saint John. As a result, the water lot of the appellants was brought within the limits of the port. The National Harbours Board claimed jurisdiction over the tankers which anchored at Mispec Point and, more important for the purposes of the present proceedings, claimed harbour dues in respect of the vessels, pursuant to By-law B-1 to which I have referred. The dues are not insubstantial. The appellants paid the Board in respect of the period July 1977 to November 1979 harbour dues of $128,033.

The appellants sought relief in the Federal Court. They claimed the Order in Council extending the harbour limits was beyond the powers of the Governor in Council on two main grounds: (i) the Order in Council was passed for improper motives, namely, to permit the National Harbours Board to collect harbour dues from Kent Lines Limited without offering any service in return, and (ii) the Order in Council constituted, for the appellants, a form of expropriation without compensation.

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It was also contended that By-law B-1—the Tariff of Harbour Dues—was inapplicable to the appellants because: (i) it was an improper exercise by the Board of jurisdiction over private property rights within a harbour, contrary to s. 8 of the National Harbours Board Act, R.S.C. 1970, c. N-8 and (ii) it was a form of taxation beyond the powers of the National Harbours Board. The appellants claimed reimbursement of $128,033.

In the Trial Division of the Federal Court, [1980] 2 F.C. 3, Dubé J. held the Order in Council intra vires and that, in the circumstances, the Order in Council could not be attacked on the ground of bad faith on the part of the Governor in Council. On the second point, however, namely, the applicability of By-law B-1 to the appellants, the judge held that the National Harbours Board could not exact tolls from vessels making use of their own facilities and receiving no services from the port. It appeared inequitable that the Board could claim dues from ships entering the port and proceeding toward their own installations, which were in place before the extension of the limits of the port, thus treating them in the same manner as other vessels using harbour facilities constructed at taxpayers' expense. The judge directed the Board to refund the appellants $128,033.

The National Harbours Board appealed and the appellants cross-appealed. A unanimous Federal Court of Appeal (Pratte, Le Dain, Hyde JJ.) [1981] 2 F.C. 393 allowed the Board's appeal and dismissed the cross-appeal. The Court agreed with Mr. Justice Dubé that the Order in Council could not be successfully challenged on the ground of improper motive or discrimination. On the By-law B-1 point the Court, differing from Justice Dubé, held the Board was not exercising any jurisdiction or control over the private property or rights of the appellants in requiring the appellants' vessels to pay the same dues as other vessels entering the port of Saint John; such dues were payable by vessels entering the harbour whether or not port

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services were rendered to the vessels. I agree with the Federal Court of Appeal.

II

The Bad Faith Argument

The mere fact that a statutory power is vested in the Governor in Council does not mean that it is beyond judicial review: Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735 at p. 748. I have no doubt as to the right of the courts to act in the event that statutorily prescribed conditions have not been met and where there is therefore fatal jurisdictional defect. Law and jurisdiction are within the ambit of judicial control and the courts are entitled to see that statutory procedures have been properly complied with: R. v. National Fish Co., [1931] Ex. C.R. 75; Minister of Health v. The King (on the Prosecution of Yaffe), [1931] A.C. 494 at p. 533. Decisions made by the Governor in Council in matters of public convenience and general policy are final and not reviewable in legal proceedings. Although, as I have indicated, the possibility of striking down an order in council on jurisdictional or other compelling grounds remains open, it would take an egregious case to warrant such action. This is not such a case.

In passing Order in Council P.C. 1977-2115 on July 27, 1977, the federal Cabinet acted under statutory authority deriving from s. 7(2) of the National Harbours Board Act which provides that the Saint John harbour boundaries are those described in the schedule to the Act, "or as may be determined from time to time by order of the Governor in Council".

The appellants attack the Order in Council expanding the harbour limits on the basis that it was passed for the sole purpose of increasing the National Harbour Board's revenues. They say this amounts to "bad faith" on the part of the Governor in Council. They also argue that harbour expansion for this reason is not within the scope of

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the jurisdiction conferred on the federal Cabinet by s. 7(2) of the Act and is therefore ultra vires.

The Federal Court of Appeal answered this submission in these words (at p. 395):

The reasons the Governor in Council may have had for exercising this authority, in addition to being unknown to us, are of little importance, since I do not see how they could affect the validity of the Order. I would add that a desire to increase the revenues of a harbour appears to me to be a justifiable reason for extending the harbour's boundaries.

Counsel for the appellants was critical of the failure of the Federal Court of Appeal to examine and weigh the evidence for the purpose of determining whether the Governor in Council had been motivated by improper motives in passing the impugned Order in Council. We were invited to undertake such an examination but I think that with all due respect, we must decline. It is neither our duty nor our right to investigate the motives which impelled the federal Cabinet to pass the Order in Council, Attorney-General for Canada v. Nallet & Carey Ld., [1952] A.C. 427, at p. 445; Reference re Chemical Regulations, [1943] S.C.R. 1, at p. 12. The position is as stated by Audette J. in R. v. National Fish Co. (supra, at pp. 80-81):

... the Parliament of Canada has undoubtedly full and plenary power to legislate both in respect of the provisions contained in the Act and in the Regulations, even if in the result the tax or fee imposed were excessive, prohibitive, oppressive or discriminative. The suggestion made in this case that the regulations are oppressive and prohibitive is not one that would induce a Court of law to inquire into the power of Parliament to authorize the making of such regulations, or to place any limitation upon the ability of Parliament to tax either oppressively or benignantly. The supreme legislative power of Parliament in relation to any subject-matter is always capable of abuse, but it is not to be assumed that it will be improperly used; if it were, the only remedy is an appeal to those by whom the legislature is elected.

I agree with the Federal Court of Appeal that the government's reasons for expanding the harbour are in the end unknown. Governments do not publish reasons for their decisions; governments may be moved by any number of political, economic,

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 social or partisan considerations. There is, however, in the record, a "Memorandum to the Minister" dated June 27, 1977, which casts some light upon the reasons which prompted the National Harbours Board to recommend the extention [sic] of the harbour limits:

MEMORANDUM TO THE MINISTER

Submission to Governor in Council Port of Saint John

The attached submission recommends to Governor in Council the extension of harbour limits of the Port of Saint John to include both the Lorneville and Canaport areas in the Bay of Fundy.

Following several years of policy planning at the local level, a port development master plan was prepared in 1971 for the Saint John Port and Industrial Development Commission by Swan Wooster Engineering Co. Ltd. with the cooperation of the Province of New Brunswick. One of the recommendations was to extend the port limits to include the area designated for development of the Canaport and Lorneville projects. Similar zones were suggested in the Urban Region Impact Study which were concurred in by the City of Saint John. The Honourable Roméo Leblanc and Premier Hatfield have been made aware of the intention to extend the port limits and both are in agreement. The extension has also been approved by the Port Authority. Representatives of Irving Oil Limited have recently recorded objection with copies to the Prime Minister and Cabinet Ministers although their agent brought the matter to the attention of Mr. A.L. Irving when the National Harbours Board granted major changes and concessions urgently required a few years ago.

Irving Oil Limited developed the Canaport deep water liquid bulk terminal facilities at Mispec Point. In order to accommodate larger vessels in the area, the Canadian Coast Guard upgraded the navigational aids and established a Vessel Traffic Management System. While these facilities serve vessels other than those using Canaport, a large portion of the $1.8 million initial expenditure and annual Operating and Maintenance expenditures of approximately the base figure could be allocated to the large crude carrier traffic.

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Considerable interest has been shown in developing liquified natural gas facilities at Lorneville. This should result in a substantial increase in vessel traffic in the area and should improve social and economic conditions in the area.

It is estimated that the extension of limits will generate additional port revenues of $130,000 through charges levied against owners of vessels supplying the refinery. Further additional revenues will also result from vessels servicing the liquified natural gas and any other facilities developed at Lorneville.

In the Trial Division Judge Dubé said this (at p. 5)

It appears from reading the documents entered in evidence that one of the very important factors prompting extension of the Saint John Harbour was undoubtedly the increase in revenue from this harbour. On the other hand, it also appears that other very valid reasons existed in favour of extension of the harbour, in particular the rationalization of shipping activities in the entire area of the harbour.

There was evidence before Mr. Justice Dubé from which one could conclude that the collection of harbour dues was not an unimportant consideration in the decision to extend the harbour boundaries. In a letter dated April 13, 1972 the Port Manager wrote to the Chairman of the National Harbours Board.

Incidently, and as I mentioned during the interview with the Board, I recommended an extension of the harbour limits in 1968 just prior to the Irving Canaport development, as per letter of June 24, 1968, your file 474-S1-0; a copy of my letter is attached.

Since the Irving Canaport facility has been in use we have been losing harbour dues from tankers that used to unload within the present harbour limits. In 1971 over 2 million tons of crude oil were unloaded at Canaport. The harbour dues which the Board could have collected in 1971 had the harbour limits been extended amounted to $18,187.11 (1,212,474 gross tons). With the Lorneville deepwater site now developing, the harbour dues' revenue would represent a substantial amount of revenue to the port in the future.

There was also ample evidence before Mr. Justice Dubé from which one might conclude that the

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expectation of increased revenues was not the only reason for expanding the harbour. In a letter dated June 24, 1968, to the National Harbours Board, the Port Manager said:

The new City limits established on January 1, 1967, as a result of amalgamation, take in the area from Musquash Head to Mispec Bay and it is a natural step to extend the harbour limits in order to tie in with these new limits.

The most important reason for extending the harbour limits from the standpoint of Federal control is to place under one central authority (N.H.B.) all ocean-going vessels and other related major harbour activities.

I have no doubt that Justice Dubé had factors like these in mind when he said that one of the reasons for expanding the harbour was "rationalization" of maritime activity in the region.

Furthermore, the harbour was expanded not only to include Mispec Point in the east, but also to include a new facility at Lorneville to the west of the original harbour.

I have referred to these several pieces of evidence, not for the purpose of canvassing the considerations which may have motivated the Governor in Council in passing the Order in Council but to show that the issue of harbour extension was one of economic policy and politics; and not one of jurisdiction or jurisprudence. The Governor in Council quite obviously believed that he had reasonable grounds for passing Order in Council P.C. 1977-2115 extending the boundaries of Saint John Harbour and we cannot enquire into the validity of those beliefs in order to determine the validity of the Order in Council.

I wish to make one further observation on this point. Irving Oil Limited and its associated companies were not denied an opportunity to be heard. On November 29, 1976 Mr. A. L. Irving, President, Irving Oil Limited, sent a telex to the Honourable Otto Lang, then Minister of Transport, voicing strong objection to the inclusion of Canaport in any extension of Saint John Harbour limits. This was followed by a further telex on December 28, 1976 to which Mr. Lang replied on January 18, 1977 in these terms:

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Dear Mr. Irving:

I would like to acknowledge receipt of your recent telegram regarding the proposed extension of harbour limits at Saint John, N.B.

Substantial federal funds were involved in providing navigational aids and vessel traffic management to permit operations at the Canaport project to proceed.

When major changes and concessions were urgently required by Irving Oil Limited and its associated companies in various leases of property in Courtenay Bay, the National Harbours Board adjusted its policies to meet the urgent request. Mr. K. McKenzie who was your agent in the matter was asked to bring to your attention the proposed extension of harbour limits to include the total city waterfront as suggested by Swan Wooster in their port planning study for the City of Saint John in 1972.

The result of the extension would be the levying of harbour dues by the National Harbours Board against the vessels which are understood to be foreign vessels using Canadian waters.

In view of the foregoing, I would suggest that the extension of the limits is fair and reasonable.

This was followed by a lengthy letter to Mr. Lang dated March 29, 1977 from Mr. Hector C. Boulay, Corporate Executive, Irving Oil Limited. Mr. Lang replied on May 4, 1977. Mr. Boulay wrote again on May 31, 1977. In this correspondence the position of Irving Oil Limited was explained forcefully and in detail.

The appellants also argue that the Order in Council expanding the harbour is ultra vires because it is not in conformity with the objects of s. 7(2) of the Act, pursuant to which the Order in Council was passed. Section 7 provides:

7. (1) The Board, for the purpose of and as provided for in this Act, has jurisdiction over the following harbours: Halifax, Saint John, Chicoutimi, Quebec, Trois-Rivières, Montreal and Vancouver, and likewise has administration, management and control of

(a) all works and property that on the 1st day of October 1936 were administered, managed and controlled by any of the Corporations;

(b) all other harbours and works and property of Canada that the Governor in Council may transfer to the Board for administration, management and control.

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(2) The boundaries of the harbours of Halifax, Saint John, Chicoutimi, Quebec, Trois-Rivières, Montreal and Vancouver are as described in the schedule, or as may be determined from time to time by order of the Governor in Council and any such order shall be published in

the Canada Gazette.

The appellants acknowledge that s. 7 does give the federal Cabinet jurisdiction to expand the harbour limits. They say, however, that this can only be done with an eye to the "administration, management and control" of the harbour and that the section does not authorize expansion for the purpose of increasing the Board's revenues.

I have already pointed out that the port was not expanded only for the purpose of increasing revenues, and that "rationalization" of maritime activity in the area was also an important factor. It seems to me that "rationalization" in the sense indicated above easily falls within the scope of the powers conferred by s. 7(2).

For the above reasons then the appellants' first submission must fail.

III

Is By-law B-1 applicable to the appellants?

Since the Order in Council was, in my view, validly passed and since its effect was to bring the Mispec Point facility within the harbour boundaries it would seem reasonable to conclude that vessels using that facility would become subject to the Board's jurisdiction and tolls.

The statutory authority to levy such tolls is found in s. 14(1)(e) of the Act:

14. (1) The Governor in Council may make by-laws, not inconsistent with the provisions of this Act, for the direction, conduct and government of the Board and its employees, and the administration, management and control of the several harbours, works and property under its jurisdiction including

[…]

(e) the imposition and collection of tolls on vessels or aircraft entering, using or leaving any of the harbours; on passengers; on cargoes; on goods or cargoes of any kind brought into or taken from any of the harbours or any property under the administration of the Board, or landed, shipped, transhipped or stored at

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any of the harbours or on any property under the administration of the Board or moved across property under the administration of the Board; for the use of any property under the administration of the Board or for any service performed by the Board; and the stipulation of the terms and conditions (including any affecting the civil liability of the Board in the event of negligence on the part of any officer or employee of the Board) upon which such use may be made or service performed. [Emphasis added.]

The appellants present several ingenious arguments in support of the claim that By-law B-1 is inapplicable to the appellants. The main argument centres on s. 8 of the National Harbours Board Act which reads:

8. Unless otherwise specifically provided for in this Act, nothing in section 7 shall be deemed to give the Board jurisdiction over or control of private property or rights within any of the harbours under the jurisdiction of the Board.

The appellants cite high and vintage authority to the effect that the owner of riparian property has a right of access from his land to the water, and from the water to his land. For example, North Shore Railway Co. v. Pion (1889), 14 App. Cas. 612; Lyon v. Fishmongers' Company (1876), 1 App. Cas. 662; Chaplin & Co. v. Westminster Corporation, [1901] 2 Ch. 329; Attorney-General v. Conservators of the Thames (1862), 1 H & M Ch. 1. The cases also show that this is a private property right, to be distinguished from the public right of navigation on the water. The right of access can be vindicated by an action for damages or by injunction.

The appellants argue that when someone docks his own vessel at his own riparian lot, the imposition of harbour dues on the vessel amounts to an interference with the riparian owner's private right of access, and since s. 8 of the Act precludes the Board from exercising jurisdiction or control over "private property or rights", the By-law imposing tolls on harbour users must be inapplicable to Kent Lines Limited's vessels docking at the Mispec Point facilities. I think the appellants' submission fails for several reasons.

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Although the cases relied on do show that access to and from the water is an incident of riparian ownership, each of them involved a physical obstruction to access. No authority is cited for the proposition that economic impediment can constitute an interference with this right. Indeed, in Attorney-General v. Conservators of the Thames, supra, it was held that a wharf that did not totally block access to a riparian neighbour's water lot, but did force the neighbour to take a longer and more expensive route to his water lot, did not amount to an obstruction to the private right. The case involved very different facts, but it may lend support to the view that economic barriers will not constitute interference.

It is obvious that nothing in the Tariff at issue here interferes with or affects in any physical sense the right of access from the waters of the Bay of Fundy to the riparian frontage. Oil tankers may anchor and discharge their cargoes without impediment.

The appellants' submission is unsupported by authority. In effect, they ask the Court to expand the law of riparian ownership to recognize a new property right. If there is nothing fatal in the fact that the appellants' case is novel, is it supported by sound principle?

It must be remembered that when the vessels enter the harbour they are exercising a public right and not a private right and it is upon entry that harbour dues become payable. If there is in this case an interference with a right, the right interfered with is not, as Vice-Chancellor Sir W. Page Wood noted in Attorney-General v. Conservators of the Thames, supra, at p. 33, the private right of access, which still remains, but the right of approaching from a distance, which forms part of the public right of navigation.

The practical implications of the appellants' argument must not be overlooked. The facts of the case are somewhat unusual. There is one parent company and three subsidiary companies. One of

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the companies, Kent Lines Limited, is claiming exemption from harbour dues because others of the companies, namely Canaport Limited and Irving Oil Limited, constructed harbour facilities at no cost to the taxpayer. Are the vessels of Kent Lines to be free of harbour dues in perpetuity? If the ownership of Kent Lines or of Canaport, for example, were to change tomorrow would the immunity of Kent Lines from harbour dues continue unabated? Under what circumstances does the immunity continue? I do not wish to be aridly technical but it seems to me the appellants' proposition might well lead to difficulty in its application.

Even if the riparian owner's right of access did include the right to avoid harbour dues, it is far from clear that the language of s. 8 would be apt to prohibit the Board from infringing that right. Section 8 says that nothing in s. 7 gives the Board "jurisdiction over or control of private property or rights" within the harbour. Section 7 gives the Board jurisdiction over seven Canadian harbours, over "all works and property" that was "administered, managed and controlled" by the Board's predecessors, and over "all other harbours and works and property of Canada" that the government transfers to the Board. In the Federal Court of Appeal Mr. Justice Pratte said (at pp. 396-97):

According to section 8, the Board may not exercise jurisdiction over or control of "private property or rights within" a harbour. In the present case the "private property" in question consists of the respondents' harbour installations. It does not seem to me that the Board has exercised any jurisdiction or control over these installations by requiring that vessels travelling thereto pay the same dues as all other vessels entering the Saint John Harbour. The situation would be different, of course, if the Board had claimed to regulate the manner in which the respondents used their harbour installations or if the Board had regulated access to these installations directly, by requiring those using them to pay dues, for example. This was not the situation here, however. The National Harbours Board did not exercise any jurisdiction or control over the respondents' property, it simply regulated the right of movement in the Saint John Harbour: this right is neither a private right nor private property of the respondents.

I agree that the imposition of harbour dues on vessels who use the Saint John Harbour does not

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amount to an exercise of "jurisdiction over or control of" private property within the meaning of s. 8.

The appellants' submission fails even if we assume both that the riparian owner has a right to use his property free of harbour dues, and also that the imposition of tolls amounts to an exercise of "jurisdiction or control" within the meaning of s. 8. The appellants' problem would then be that s. 8 begins with the words "unless otherwise specifically provided for in this Act". In other words the s. 8 limitation on the Board's jurisdiction is expressly made subject to other sections of the Act that give the Board particular powers. Section 14(1)(e) expressly gives the Board jurisdiction to make by-laws respecting "the imposition and collection of tolls on vessels or aircraft entering, using or leaving any of the harbours".

IV

Tolls and Taxes

The appellants' third argument relies on the wording of s. 14(1) (e), which permits the Board to impose "tolls" on ships entering the harbour. The appellants cite authority such as Manchester Ship Canada Co. v. Upper Mersey Navigation Commissioners, [1958] 2 Lloyd's Rep. 81 at p. 90, to the effect that "tolls" is a term to be distinguished from "taxes", the difference being that "tolls" are charged to defray the cost of providing particular government services, while "taxes" are imposed for the purpose of raising revenue. The appellants say the Board provides no services to users of its Mispec Point facility; the payments exacted by the Board are "taxes" rather than "tolls" and the Board has no jurisdiction to impose such charges under s. 14(1)(e).

The trial judge apparently concluded that the Board provides no services to vessels using the dock at Mispec Point. He also agreed with the appellants' submission that the "tolls" were really taxes, and were therefore ultra vires the Board. The Federal Court of Appeal disagreed, holding

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that s. 14 explicitly authorizes the imposition of "tolls" on any vessel entering the harbour, whether or not the Board rendered any service to the vessel charged. Mr. Justice Pratte said (at p. 397):

It is clear from reading the By-law in question that the dues it imposes are "payable in respect of each vessel that enters or operates within a harbour", regardless of whether or not services have been provided to the vessel. It seems to me, moreover, that the imposition of such dues is authorized by the early part of paragraph 14(1)(e) of the Act.

I shall assume, arguendo, that the appellants are right in their contention that the word "tolls" in s. 14(1)(e) restricts the Board to charges reasonably related to the costs of operating the harbour. It does not follow, however, that a toll imposed on a particular vessel pursuant to s. 14 must be related to the cost of services provided to that vessel. Nor do the appellants cite any authority to this effect. Indeed one of the cases the appellants rely on appears to be authority to the contrary. In Foreman v. Free Fishers of Whitstable, (1869) L.R. 4 H.L. 266, the plaintiffs brought an action to recover "anchorage dues" allegedly owed by the defendants. In that case Lord Chelmsford said (at p. 285):

I find nothing in the authorities to warrant the argument of the learned counsel that the benefit conferred by the owner of the port must be precisely that in respect of which the toll is demanded. On the contrary, it appears from Lord Hale, De Portibus Maris, chap. 6, that, "though A. may have the property of a creek, or harbour, or navigable river, yet the King may grant there the liberty of a port to B., and so the interest of the property and the interest of franchise be several and divided". And he afterwards mentions anchorage as a toll arising from the jus dominii or franchise of a port. In this case it is clear that the anchorage toll would not be payable in respect of any benefit which the anchoring vessel derived from the owner of the franchise.

Even if the word "tolls" in s. 14 limits the Board to charges reasonably related to the cost of providing harbour services, a toll levied against a particular

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 vessel need not be based on the actual cost of services rendered to that vessel. To show that the Board's fees were ultra vires as "taxes" it would at least be necessary to show that the Board's revenues were significantly greater than the cost of providing harbour facilities and services to the public and no such showing was attempted here. Indeed, a memorandum dated July 22, 1969 written to the National Harbours Board by Vice-Chairman of the Board indicates that the port of Saint John suffered net operating losses amounting to $644,049 and $781,222 in the years 1968 and 1967 respectively.

V

Expropriation without Compensation

The appellants' final submission is that the imposition of tolls on vessels entering the harbour in order to use the Mispec Point facilities amounts to expropriation of private property without compensation.

I have concluded, however, that the riparian owner has no private right to operate his wharf free of harbour dues. It follows that the Board has not "expropriated" any property right belonging to the appellants. The fourth submission therefore falls with the second.

VI

To sum up, if one accepts the proposition that harbour limits may be increased and the further proposition that tolls may be imposed in order to defray the costs of operating the harbour, I cannot possibly see how persons having riparian rights within the extended area can be exempted in perpetuity from payment of the harbour tolls.

I would dismiss the appeal with costs. Appeal dismissed with costs.

Solicitors for the appellants: Langlois, Drouin & Associés, Quebec.

Solicitor for the respondents: R. Tassé, Ottawa.