Supreme Court of Canada
Interprovincial Co-operatives Ltd. et al. v. R., [1976] 1 S.C.R. 477
Date: 1975-03-26
Interprovincial Co-Operatives Limited (Defendant) Appellant;
and
Dryden Chemicals Limited (Defendant) Appellant;
and
Her Majesty The Queen in right of the Province of Manitoba (Plaintiff) Respondent.
1974: March 8, 11, 12; 1975: March 26.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon and Beetz JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA
Constitutional law—Contaminant discharged into Ontario and Saskatchewan rivers carried into Manitoba waters—Damage to Manitoba fisheries—The Fishermen’s Assistance and Polluters’ Liability Act, 1970 (Man.), c. 32 (Continuing Consolidation F100)—Whether statute ultra vires the Legislature of Manitoba.
In an action brought by the respondent as assignee of 1590 persons who received financial assistance under The Fishermen’s Assistance and Polluters’ Liability Act, 1970 (Man.), c. 32, it was alleged that the appellants caused damage to Manitoba’s fisheries by allowing mercury to be discharged from their respective chlor-alkali plants in Saskatchewan and Ontario which mercury was carried into Manitoba by the natural flow of the rivers in which the discharge took place.
In addition to the common law, Manitoba relied on The Fishermen’s Assistance and Polluters’ Liability Act, in which it is provided that Manitoba may recover as damages caused by pollution the amount of assistance payments made to fishermen or the actual loss, whichever is greater (s. 3(3)). A statutory liability was created against any person having discharged a contaminant either “into waters in the province or into any waters whereby it is carried into waters in the province” (s. 4(1)). It was also provided that it is not a lawful excuse “to show that the discharge of the contaminant was permitted by the appropriate regulatory authority having jurisdiction at the place where the discharge occurred, if that regulatory authority did not also have jurisdiction at the place where the contaminant caused damage to the fishery” (s. 4(2)).
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On a motion to strike out the allegations related to the Act, Matas J. held that the Act was beyond the powers of the Manitoba Legislature. On appeal, the majority of the Court of Appeal upheld the validity of the Act. From that decision the defendant companies appealed to this Court.
Held (Laskin C.J. and Judson and Spence JJ. dissenting): The appeal should be allowed.
Per Martland, Pigeon and Beetz JJ.: A province, as owner of inland fisheries in its territory, is entitled to legislate for the protection of its property. However, in respect of injury caused by acts performed outside its territory, this cannot be treated as a matter within its legislative authority when those acts are done in another province any more than when they are accomplished in another country. Although the injurious acts cannot be justified by or under legislation adopted in the province or state where the plants are operated, by the same token, Manitoba is restricted to such remedies as are available at common law or under federal legislation.
The acts of the appellants necessarily have an inter-provincial effect and hence are a subject‑matter within the exclusive authority of Parliament in accordance with its residual power over matters of interprovincial concern not specifically allocated to either federal or provincial authority under the B.N.A. Act, 1867. Therefore the Provinces of Ontario and Saskatchewan were without authority to license the appellants’ acts of contamination.
It followed that the legislation in question is ultra vires the province as involving the exclusively federal field of the pollution of interprovincial rivers.
Cowen v. A.G. British Columbia, [1941] S.C.R. 321; Royal Bank of Canada v. The King, [1913] A.C. 283; A.G. Ont. v. Scott, [1956] S.C.R. 137; Board of Trustees of Lethbridge Irrigation District v. Independent Order of Foresters, [1940] A.C. 513; A.G. Alta. v. A.G. Canada, [1943] A.C. 356; R. v. National Trust Co., [1933] S.C.R. 670; K.V.P. Co. v. McKie, [1949] S.C.R. 698; C.A.P.A.C. v. International Good Music, Inc., [1963] S.C.R. 136; British Coal Corp. v. The King, [1935] A.C. 500; Valin v. Langlois (1879), 3 S.C.R. 1, aff’d. 5 App. Cas. 115; Citizens Insurance Company of Canada v. Parsons (1881), 7 App. Cas. 96; Burns Foods Ltd. v. A.G. Man., [1975] 1 S.C.R. 494; Campbell-Bennett Ltd. v. Comstock Midwestern Ltd., [1954] S.C.R. 207; The “Atlantic Star”, [1974] A.C. 436; Bank of Montreal, Royal Bank of Canada and C.F.I. Operating
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Co. v. Metropolitan Investigation & Security (Canada) Ltd., [1975] 2 S.C.R. 546; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; Ross v. Registrar of Motor Vehicles, [1975] 1 S.C.R. 5, referred to.
Per Ritchie J.: The contention of the appellants to the effect that the impugned legislation is ultra vires as trespassing on the exclusive jurisdiction of Parliament under s. 91(27) of the B.N.A. Act, 1867 (criminal law) cannot be sustained, and the legislation is not in conflict with federal legislation having to do with control of pollution of inter-provincial rivers. Provincial legislation dealing exclusively with the effect of pollution has controlling effect within the territorial limits of the province by which it is enacted, whereas legislation in respect of the control of pollution in interprovincial rivers is clearly within the exclusive legislative authority of Parliament under s. 91 (12) of the B.N.A. Act, 1867.
However, the provincial legislature, in enacting s. 4(2), purported to nullify the effect of permission duly granted by the regulatory authority of another jurisdiction. In so doing it purported to legislate with respect to conduct and rights of the appellants outside the territorial limits of the Province of Manitoba with the result that the statute of which it forms part has no application to the appellants.
R. v. Robertson (1882), 6 S.C.R. 52; A.G. Canada v. A.G. Ont., [1898] A.C. 700; Carr v. Fracis Times & Co, [1902] A.C. 176; Walpole v. Canadian Northern Railway Co., [1923] A.C. 113; McMillan v. Canadian Northern Railway Co., [1923] A.C. 120; Canadian National Steamships Co. v. Watson, [1939] S.C.R. 11, McLean v. Pettigrew, [1945] S.C.R. 62; C.A.P.A.C. v. International Good Music, Inc., [1963] S.C.R. 136; Jenner v. Sun Oil Co., [1952] O.R. 240; Phillips v. Eyre (1870), L.R. 6 Q.B. 1; Royal Bank of Canada v. The King, [1913] A.C. 283; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393, referred to.
Per Laskin C.J. and Judson and Spence JJ., dissenting: There is nothing in the impugned Manitoba Act that trespasses on federal legislative authority in relation to fisheries. Federal power in relation to fisheries does not reach the protection of provincial or private property rights in fisheries through actions for damages or ancillary relief for injury to those rights. Rather, it is concerned with the protection and preservation of fisheries as a public resource, concerned to monitor or regulate undue or injurious exploitation, regardless of who the owner may be, and even in suppression of an owner’s right of utilization.
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It could not be accepted that the Act denies to the appellants any legal rights they acquired in Saskatchewan or in Ontario in respect of the operation there of their respective chlor-alkali plants. The appellants’ contention of constitutional invalidity based on alleged deprivation or divestment of a “right” outside Manitoba proceeded upon a misconception. What the appellants were claiming was an immunity in Manitoba based on a licence to pollute granted outside. That licence was not granted as against the respondent or against any of the assignor fishermen, nor could it be. Manitoba, in enacting s. 4(2), simply took care to exclude any possible contention that a licence granted in another province could provide a defence against liability for injury to Manitoba property.
A.G. Ont. v. Scott, [1956] S.C.R. 137; C.P.R. v. Parent, [1917] A.C. 195; Royal Bank of Canada v. The King, [1913] A.C. 283; R. v. Robertson (1882), 6 S.C.R. 52; A.G. Canada v. A.G. Ont., [1898] A.C. 700; R. v. National Trust Co., [1933] S.C.R. 670; Phillips v. Eyre (1870), L.R. 6 Q.B. 1; Chaplin v. Boys, [1971] A.C. 356; Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; Desharnais v. C.P.R, [1942] 4 D.L.R. 605; Ottawa Valley Power Co. v. Hydro-Electric Power Commission of Ontario, [1937] O.R. 265; Beauharnois Light, Heat and Power Co. v. Hydro-Electric Power Commission of Ontario, [1937] O.R. 796; Crédit Foncier Franco-Canadien v. Ross, [1937] 3 D.L.R. 365, referred to.
APPEALS from a judgment of the Court of Appeal for Manitoba, allowing an appeal from a judgment of Matas J. Appeals allowed, Laskin C.J. and Judson and Spence JJ. dissenting.
D.E. Gauley, Q.C., and P. Foley, for the defendant, appellant, Interprovincial Co-operatives Ltd.
A.K. Twaddle, Q.C., and E.W. Olson, for the defendant, appellant, Dryden Chemicals Ltd.
D.W. Moylan, Q.C., for the Crown, plaintiff, respondent.
T.B. Smith, Q.C., for the Attorney General of Canada.
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D.W. Mundell, Q.C., for the Attorney General of Ontario.
R. Langlois and C.H. Blondeau, for the Attorney General of Quebec.
The judgment of Laskin C.J. and Judson and Spence JJ. was delivered by
THE CHIEF JUSTICE (dissenting)—These appeals, by Interprovincial Co-operatives Limited and by Dryden Chemicals Limited, are here by leave of this Court, and they raise constitutional questions which, pursuant to directions for notice to be served on the Attorney General of Canada and on the Attorneys General of the Provinces, were formulated as follows:
1. Is The Fishermen’s Assistance and Polluters’ Liability Act ultra vires the Legislature of the Province of Manitoba in that it is legislation in relation to “sea coasts and inland fisheries” and hence within the exclusive jurisdiction of the Parliament of Canada under Section 91(12) of the British North America Act or is otherwise outside the competence of the Legislature of Manitoba?
2.(a) Is the Fishermen’s Assistance and Polluters’ Liability Act ultra vires the Legislature of the Province of Manitoba for the reason that its provisions are not limited in their application, (either expressly or by implication) to property and civil rights within the province nor directed solely to matters of a merely local or private nature within it? Or, alternatively;
2.(b) Are the provisions of the Fishermen’s Assistance and Polluters’ Liability Act inapplicable insofar as they purport to regulate acts done by the Appellants, Interprovincial Co-operatives Limited and Dryden Chemicals Limited, outside the Province of Manitoba for the reason that the power of the Legislature of the Province of Manitoba and therefore the application of The Fishermen’s Assistance and Polluters’ Liability Act is limited to the regulation of conduct within the Province?
Interventions were lodged by the Attorney General of Canada, the Attorney General of Ontario and the Attorney General of Quebec, all of whom filed factums and appeared by counsel in support of the position of the respondent, the Attorney
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General of Manitoba, who initiated, in the name of Her Majesty in right of Manitoba, the litigation out of which these appeals arise.
The litigation is founded directly upon The Fishermen s Assistance and Polluters’ Liability Act, 1970 (Man.), c. 32, effective as of June 1, 1970. Her Majesty in right of Manitoba brought action on December 10, 1970, against the two defendants, hereinafter referred to as Ipco and Dryden, suing them as assignee, pursuant to the Act, of 1,590 persons who received financial assistance under the Act in a total amount of about $2,000,000 and who were then or formerly engaged in various capacities in the commerical fishing industry in Manitoba. Both Ipco and Dryden are Dominion companies, the former having its head office in Manitoba and carrying on business there, and the latter having its head office in Ontario but carrying on business in Manitoba as well as in Ontario. Ipco has a chlor-alkali plant situate in Saskatchewan close to the South Saskatchewan River and Dryden operates a chlor-alkali plant in Ontario situate near the Wabigoon River. Each plant uses mercury, in both elemental form and as a compound, in its industrial processes, and the allegations of the statement of claim were that Ipco and Dryden permitted quantities of mercury to escape into the named rivers which carried it into Manitoba waters where it was ingested into the tissues of fish frequenting the plaintiffs fishery in those waters. It was further alleged that by reason of this ingestion, the fish became unsafe for human consumption and unmarketable, with the result that the regulatory authority under the federal Manitoba Fishery Regulations has refused to permit fishing for commercial purposes, with resultant loss to the plaintiff and to its assignors.
Negligence is alleged against Ipco and Dryden, and as well nuisance and trespass, as at common law, and then there are allegations in paras. 13 to 20 of the statement of claim which are at the heart of this litigation. Ipco and Dryden each brought a motion to strike out paras. 13 to 18 inclusive, and the words “and to the assignors herein described”
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in para. 19, and also para. 20(d), as disclosing no reasonable cause of action by reason of alleging a wrongful act under a statute, The Fishermen s Assistance and Polluters’ Liability Act, which was either ultra vires or had no application to the defendants.
For the purpose of the motion, the facts set out in the impugned paragraphs are taken to be as therein stated. It will be convenient to set out not only the paragraphs attacked but the whole of paras. 13 to 20 inclusive. They are as follows:
13. Pursuant to Section 2 of The Fishermen’s Assistance and Polluter’s Liability Act, S.M. 1970 C.32 (hereinafter called the Assistance Act) the Minister therein mentioned has, since 1st June, 1970, made assistance payments totalling $2,000,000.00 more or less, to 1590 persons then or formerly engaged in various capacities in the commercial fishing industry in Manitoba who, in the opinion of the Minister, had suffered or would suffer, financial loss by reason of the prohibition of the taking of fish from the Manitoba waters because of the contamination of those fish resulting in whole or in part from activities of Interprovincial and Dryden Chemicals respectively, hereinbefore described.
14. Pursuant to subsection (1) of Section 3 of the Assistance Act, the Plaintiff has received from each of the 1590 persons referred to in paragraph 13 (herein called the assignors), an assignment in writing of his right to sue any person, including the Defendants, in respect of the hereinbefore recited pollution of the Manitoba waters, in regard to his loss in the year 1970.
15. The assignors comprise any person who:—
(a) was engaged in the years 1968 and/or 1969 in the commercial fishing industry in the open water seasons in the Manitoba waters, either as an operator or a hired man, on a whitefish boat, trap net boat or skiff, and who intended to be so engaged in the 1970 open water seasons; or
(b) had an interest in a whitefish boat, trap net boat or skiff whether as owner, purchaser under an agreement for sale or lessee with option to purchase, which boat or skiff was utilized in the year 1969 and was intended to be utilized in the year 1970, in the open water seasons in the Manitoba waters; or
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(c) in the year 1969 in respect of the Manitoba waters, acted as a fish station agent for the Freshwater Fish Marketing Corporation, and his employees engaged in fish packing or similar station duties.
16. Each of the assignors had a sufficient interest in the fishery described in paragraph 1 and was sufficiently dependent upon its continued well-being for his livelihood, to fall within the class of persons to whom Inter-provincial and Dryden Chemicals respectively owed a duty to take reasonable care, as alleged in paragraphs 10 and 11, and to entitle him to compensation in respect of the breach of that duty and for the nuisance and trespass alleged in paragraph 12.
17. Each of the Assignors has suffered financial loss in excess of any assistance payment received by him referred to in paragraph 13, particulars of which the Plaintiff craves leave to present at the trial.
18. The Plaintiff has incurred and will continue to incur costs and expenses and loss of revenue in respect of the underlisted items, none of which would have been, or would be, incurred, had Interprovincial and Dryden Chemicals respectively constructed and operated their respective plants in such a way as to prevent the escape of mercury and mercury compounds therefrom:—
Costs and Expenses in 1970
(a) Continued monitoring of mercury levels in the Manitoba waters, bottom sediments, aquatic organisms and fish;
(b) Administration of the assistance payments programme authorized by Section 2 of the Assistance Act;
(c) Informing the public by the news media and other means, of the occurrence of mercury pollution and its significance as a health hazard; and
(d) Re-training for other occupation, persons who were formerly engaged in the commercial fishing industry, in respect of the Manitoba waters, but whose engagement in that industry has terminated with the cessation of that industry consequent upon the contamination of the fish in those waters, hereinbefore described.
Loss of Revenue in 1970
(a) Reduction in number of commercial fishing and angling licenses issued and consequent loss of license fees totalling $61,109.03 more or less;
(b) Reduction in number of angling visitors to Manitoba and consequent loss of revenue tax and other consumption taxes.
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19. With respect to the escape of mercury referred to in paragraph 6 and the accumulation thereof on the river bed referred to in paragraph 7, the Plaintiff fears that unless prompt steps are taken to cease the former and remove or permanently neutralize the latter, pollution of the Manitoba waters and contamination of the fish therein, will continue for a lengthy period, with the attendant loss to the Plaintiff and to the assignors herein described.
20. The Plaintiff therefore claims against the Defendants and each of them:—
(a) An injunction restraining each from continuing to discharge mercury or mercury compounds from their respective chlor-alkali plants into the two aforementioned rivers respectively, or into any other watercourse directly or indirectly draining into or connecting with the Manitoba waters;
(b) A mandatory order requiring each to remove or permanently neutralize the accumulation of mercury on the respective river beds referred to in paragraph 7;
(c) In lieu of the relief claimed in (b) supra, damages in an amount sufficient to enable the Plaintiff to effect removal or permanent neutralization of the said mercury deposits;
(d) Payment of the sum of $2,000,000.00 more or less, referred to in paragraph 13;
(e) Payment of a sum equal to the excess referred to in paragraph 17;
(f) Payment of a sum sufficient to cover the costs and expenses and loss of revenue, referred to in paragraph 18;
(g) Interest at the legal rate on all sums of money claimed hereunder;
(h) Such further and other relief as to this Honourable Court may seem just;
(i) Costs.
A full understanding of the submissions of the parties and intervenants requires consideration of the first four sections of the impugned Manitoba statute which consists in all of eight sections, the last four dealing, respectively, with authority for agreements with Canada, with provisions for the cost of administration, with identification of the Act in the continuing consolidation of Manitoba statutes and with its in force date. The first four sections read as follows:
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Definitions.
1. In this Act
(a) “contaminant” means any substance whether gaseous, liquid or solid
(i) that is foreign to or in excess of the natural constituents of water; or
(ii) that affects the natural, physical, chemical, or biological quality of water;
and that is, or may be, injurious to health or safety of a person, or injurious or damaging to property or to plant and animal life;
(b) “minister” means that member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act.
Authority to make payments.
2. The minister may make payments, whether by way of loan or otherwise, in such amounts and upon such terms and conditions as he considers appropriate, to any person then or formerly engaged in any capacity in the commercial fishing industry who, in the opinion of the minister, has suffered, or will suffer, financial loss by reason of the prohibition of the taking of fish from waters in the province because of the contamination of fish resulting from pollution of those waters.
Assignment of right to sue.
3.(1) The government may receive from any person to whom a payment is made under section 2, an assignment in writing of that person’s right to sue any person responsible, or allegedly responsible, for pollution of the waters referred to in that section.
Government as assignee may sue in its own name.
3.(2) Notwithstanding that the subject matter of the assignment is a bare right to sue in tort or that the assignor assigns the right to sue in respect of a part of his loss only, upon execution of an assignment made under subsection (1), the government is the absolute owner of the right to sue, and of the proceeds thereof, and may enforce the right to sue in its own name.
Damages recoverable.
3.(3) In any suit brought by the government as assignee under an assignment made under subsection (1), in addition to any other item of damages properly recoverable the government, upon establishment of liability, may recover from the defendant the actual loss suffered by the assignor, or so much thereof as was assigned to
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the government, or the payment made to the assignor by the minister under section 2, whichever is the greater.
Government may re-assign.
3.(4) The government may at any time, upon such terms and conditions as the Lieutenant Governor in Council may approve, re-assign to the assignor a right to sue assigned to the government under subsection (1).
Facts to be proved and circumstances not constituting a defence.
4.(1) In any suit in which the government is a plaintiff wherein the pollution of water is in issue, if it is established by the degree of proof required in a civil suit that the defendant has without lawful excuse, the proof whereof lies on him, discharged or permitted the discharge of any contaminant from premises occupied by him, into waters in the province or into any waters whereby the contaminant is carried into waters in the province, and that thereafter fish in those waters have suffered death, disease or injury, or contamination rendering them unfit or unsafe for human consumption, or any adverse effect whereby they are rendered less marketable, the defendant is liable for all financial loss occasioned thereby to any person whose loss is a subject matter of the suit, notwithstanding any one or more of the following circumstances:
(a) At no time did that person have any proprietary interest in the fishery containing the affected fish.
(b) A regulatory authority has forbidden or refused to permit the taking of fish from that fishery by reason of the pollution of the waters thereof.
(c) Those waters have been, or are being, polluted from any other cause or by any other person.
(d) It cannot be established that the contaminant affecting the fish derived from the actual volume of contaminant which the defendant discharged or permitted to be discharged from premises occupied by him, provided the deleterious effect on the fish is of a nature consistent with a contaminant of that kind being the total or partial, immediate or mediate cause.
Permit in one jurisdiction only no excuse.
4.(2) For the purposes of subsection (1) it is not a lawful excuse for the defendant to show that the discharge of the contaminant was permitted by the appropriate regulatory authority having jurisdiction at the place where the discharge occurred, if that regulatory authority did not also have jurisdiction at the place where the contaminant caused damage to the fishery.
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Place of action.
4.(3) The statement of claim in any suit under this Act may be issued in any judicial district.
Matas J. (as he then was), before whom the motion to strike out was argued at first instance, concluded, in reasons for judgment delivered on June 16, 1972, that because s. 4(2) of the challenged Act purported to preclude the defendants from raising a defence of lawful authority to discharge mercury into waters in Saskatchewan and Ontario it derogated from civil rights of the defendants outside Manitoba. It was beyond the powers of the Manitoba Legislature to deprive them of the extraterritorial civil rights, and consequently the Act was inapplicable to the defendants and unenforceable against them. Although he granted their motion on this ground he rejected their contentions that (1) the Manitoba Act was ultra vires as being in relation to the criminal law or (2) it was in conflict with any applicable federal legislation forbidding pollution of fish-frequented waters, or alteration of water quality as that quality affects fish; rather, since in his view provincial power to legislate in respect of pollution generally and in respect of Manitoba’s proprietary interest in fisheries was not in issue, he found the legislation under review supportable under s. 92(5), (13) and (16) of the British North America Act, were it not for its reach outside the province. Again, he rejected a contention that the general power of Parliament to legislate for the peace, order and good government of Canada was invaded where an interprovincial river was concerned, and he held on this point that it was open to a province to legislate on the effect of pollution within the province, although an interprovincial river was involved. Further, he held that the province was entitled to legislate in respect of tortious liability, subject to constitutional limitations, and to bring action in the province, whether or not the tort be regarded as one respecting injury to real property. Since damage was done in Manitoba where the defendants had assets, it was the view of Matas J. that Manitoba could assert its legislative authority in respect of tortious liability, and that it was unnecessary to determine the place of occurrence for all purposes as being either where the tortious act
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was initiated or where the damage occurred.
The judgment of Matas J. was set aside by the Manitoba Court of Appeal, with Guy J.A. alone in dissent in the five-man Court. Freedman C.J.M., with whom Dickson J.A. (as he then was) concurred, rejected submissions against the validity of the challenged Act, submissions which had also been rejected by Matas J., and accepted the latter’s conclusion that there was no conflict with federal pollution legislation. But he differed from Matas J. on the latter’s assessment of the Manitoba Act as derogating from or denying to the appellants any extraterritorial civil rights. In particular, Freedman C.J.M. focused on s. 4(2) of the Manitoba Act whose scope was wide enough to deny to the appellants a defence based on a lawful, even licensed conduct of their business in Saskatchewan and in Ontario where the water contamination originated.
On the assumption that Ipco and Dryden were licensed in Saskatchewan and in Ontario to carry on their business as they had done, albeit with resulting injury to a Manitoba fishery, Freedman C.J.M. examined the effect which their respective licences had, from the standpoint of the conflict of laws, upon the constitutional issue which was before him. His reasons indicate that the choice of law question, raised by the occurrence of damage in Manitoba through a lawful activity under the law of Saskatchewan and Ontario, did not admit of an easy answer. The answer, for him, depended on where the tort was committed since, for constitutional purposes, if it was committed in Manitoba, it would be Manitoba law that would govern. There was, in his opinion, an arguable case that the tort was committed in Manitoba; and it would be wrong, on a motion to strike out parts of a statement of claim, to grant the motion except in the clearest case. In short, to quote his reasons, “[if] constitutional invalidity depends on a finding that the tort occurred outside Manitoba, that find-
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ing cannot be made and therefore invalidity cannot be established”.
The conclusion of the learned Chief Justice of Manitoba was that the impugned Manitoba Act was concerned with the protection of that province’s right of fishery and with the regulation of the enforcement of the common law tort of injury to that fishery. That was its pith and substance, and it was supportable under s. 92(5), (13), (14) and (16) of the British North America Act. The validity of the statute was not impeachable because it may adversely affect rights arising outside the province when those rights fall to be determined in Manitoba and in accordance with its laws. What Manitoba had done was to impose on persons within the jurisdiction of its Courts liability for damage by them to property interests in Manitoba resulting from acts originating outside the province and justified in Saskatchewan and Ontario by permits from their appropriate regulatory authorities. In fine, the Manitoba Act was concerned not with the existence of a right outside the province but rather with the assertion and exercise of a right within the province.
Hall J.A., with whom Monnin J.A. concurred, found it unnecessary to determine where the tort was committed. In his view, it was open to the province to attach legal consequences in its territory to tortious activity, whether occurring within or without the boundaries of the province, at least where the defendants were in the province and the liability was based upon damage in Manitoba to a Manitoba resource. Founding himself in the main on cases relating to the extraterritorial competence of the Parliament of Canada, Hall J.A. did not think that there was any territorial limitation which precluded a province from imposing liability upon persons in Manitoba for acts committed outside and to define the conditions upon which damages may be awarded for such extra-provincial torts where the matter related to property and civil rights in the province or to matters of a local and private nature therein.
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In his dissent, Guy J.A. agreed with Matas J. in his assessment of the legal effect of the Manitoba Act; the vice of the Act was in depriving the appellants of all possible defences to actions against them for polluting Manitoba waters. Guy J.A. was of the opinion that a province could not, in the guise of legislation in relation to property and civil rights in the province, take away civil rights enjoyed by the affected persons in other provinces or in other countries. What was in issue was not the jurisdiction of the Manitoba Courts, but the reach of Manitoba law to deprive persons subject to those Courts of rights enjoyed by them in respect of acts done outside Manitoba, and, indeed, to deprive them of defence for acts done outside of Manitoba where damage occurs in Manitoba, even of the defence that the damage was not a direct result of the extra-provincial act.
I have summarized the views of the Manitoba judges in this case to show the range of the matters canvassed by them, but not their details. What emerges from the reasons in the Courts below is a concern about the interaction of conflicts of laws questions with the territorial limits of provincial legislative power. This issue was touched upon, in a situation different from the present one, in Attorney General of Ontario v. Scott, and there is slight reference to it in C.P.R. v. Parent, a judgment of the Privy Council reversing a judgment of this Court. But the main reliance of the appellants in challenging the validity of the Manitoba Act on the basis of its extraterritorial impact was on Royal Bank of Canada v. The King, which did not come here but went directly to the Privy Council from the Alberta Appellate Division.
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Before turning to examine the foregoing cases and others bearing on the issue of provincial competence, if any, to legislate with extraterritorial effect, I wish to deal with submissions made by Ipco and Dryden on the alleged invasion by Manitoba of federal legislative authority in relation to “seacoast and inland fisheries” under s. 91(12) of the British North America Act. None of the other submissions of the appellants as to encroachment on federal legislative authority, whether in relation to the criminal law or other heads of federal power need be considered; as to them, I am in agreement with both Matas J. and with the Manitoba Court of Appeal.
No attack was made in this Court upon the validity of any federal legislation or regulations thereunder, whether dealing with fisheries or with water quality as it affects fisheries. On this footing, the appellants’ position was that not only did the Manitoba Act invade the exclusive legislative authority of Parliament in relation to fisheries, but it was also in conflict with federal legislation and hence must yield to it (or, alternatively, federal legislation has pre-empted the field in which the Manitoba Act purported to operate). The starting point for this double submission was the judgment of this Court in The Queen v. Robertson, where the distinction between legislative power and property rights was first adumbrated, becoming later a staple of constitutional interpretation as a result of the judgment of the Privy council in Attorney General for Canada v. Attorney General for Ontario. Particular emphasis was laid by the appellants upon what Ritchie C.J. said in The Queen v. Robertson, at pp. 120-1 as follows:
I am of opinion that the legislation in regard to “Inland and Sea Fisheries” contemplated by the British North America Act was not in reference to “property and civil rights”—that is to say, not as to the ownership of the beds of the rivers, or of the fisheries, or the rights of individuals therein, but to subjects affecting the fisheries generally, tending to their regulations, protection and preservation, matters of a national and general
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concern and important to the public, such as the forbidding fish to be taken at improper seasons in an improper manner, or with destructive instruments, laws with reference to the improvement and increase of the fisheries; in other words, all such general laws as enure as well to the benefit of the owners of the fisheries as to the public at large, who are interested in the fisheries as a source of national or provincial wealth; in other words, laws in relation to the fisheries, such as those which the local legislatures were, previously to and at the time of confederation, in the habit of enacting for their regulation, preservation and protection, with which the property in the fish or the right to take the fish out of the water to be appropriated to the party so taking the fish has nothing whatever to do, the property in the fishing, or the right to take the fish, being as much the property of the province or the individual, as the dry land or the land covered with water.
The words in this passage, “tending to their regulation, protection and preservation”, and the same words appearing in a passage on p. 123, were relied on by the appellants as excluding provincial competence to deal with nuisance or negligence or, indeed, with any civil liability in respect of interference with a right of fishery. The submission was that provincial competence was limited to determining ownership of fisheries, or other property interests therein, but no more. For the reasons that follow, I am unable to accept these submissions.
The right to fish in Manitoba is within the class of profits à prendre, being a real property interest which may exist either in gross or as appurtenant to a dominant tenement. The record in the present case does not disclose the nature of the rights of fishery which were involved in the present case, but it may be safely taken that they were rights of fishery in gross since, if appurtenant, they would be limited to the needs of the dominant tenement. Moreover, although it does not clearly appear whether any private rights of fishery were involved, as opposed to rights of fishery vested in the Crown in right of Manitoba, the authority of the province over property therein and its legislative right to assume ownership thereof make it unnecessary, in the light of the nature of the
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proceedings out of which this appeal arose, to determine whether private rights of fishery existed in any of the waters alleged to have been polluted. There is also the fact that the statement of claim asserts Manitoba’s ownership of all rights of fishery in its waters, and further asserts a sufficient interest of the erstwhile 1590 commercial fishermen in those fisheries to give substance to their assignments of their right to sue the appellants for damages.
That it was open to the federal Parliament to prohibit or regulate the use of rights of fishery, in the sense, inter alia, of limiting the permissible catch and determining open and closed seasons, was not disputed; and equally not disputed that it could do this by a licensing system. In Manitoba, the federal Manitoba Fishery Regulations, SOR/ 54-365, as amended, passed under the authority of the Fisheries Act, R.S.C. 1952, c.119 (repealed and replaced by the Manitoba Fishery Regulations, SOR/71-264, effective June 8, 1971, made pursuant to the Fisheries Act, R.S.C. 1970, c.F-14) provided for the licensing of commercial fishing in the waters of Manitoba. As a result of the pollution of those waters resulting in the ingestion of mercury by fish therein, fishing for commercial purposes was stopped as of April 1, 1970, in certain waters of Manitoba, and as of July 17, 1970, in other waters, and the number of sports fishing permits was decreased. It appears that it was either the provincial Minister in Manitoba or other Manitoba official who enjoined the commercial fishing but, in doing so, he was acting as the appropriate federal authority under the federal fishery regulations applicable to Manitoba. The legality of the prohibition of commercial fishing by the 1590 persons who obtained financial assistance under the Manitoba Fishermen’s Assistance and Polluters’ Liability Act is not challenged, nor can there be any challenge to the right of Manitoba to provide them with financial assistance. What is challenged as an encroachment on exclusive federal authority in relation to fisheries is the conferment by the Manitoba Act of the right of action in the Government of the province in the particular terms and with the particular advantages given to it as plaintiff.
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Since, for the purposes of the present case, it must be taken that the Crown in right of Manitoba both owned the fisheries in the waters of the province and was proper assignee of such interests in those fisheries as the 1590 assignors had, the question that arises under the appellants’ contention in respect of the federal fisheries power is whether the liability imposed under the Manitoba Act, and the recoverable loss where liability is established, go beyond the limits of provincial competence and invade that federal power. It is plain enough to me that a province having rights in property therein is entitled to protect those rights against injury, and, similarly, to protect the interests that others may have in that property, by bringing or authorizing actions for damages, either as at common law or under statutory provision. It is, in my view, untenable to fasten on words in a judgment, such as the words “tending to their regulation, protection and preservation”, which appear in the reasons in The Queen v. Robertson, and read them as if they have literal constitutional significance. Federal power in relation to fisheries does not reach the protection of provincial or private property rights in fisheries through actions for damages or ancillary relief for injury to those rights. Rather, it is concerned with the protection and preservation of fisheries as a public resource, concerned to monitor or regulate undue or injurious exploitation, regardless of who the owner may be, and even in suppression of an owner’s right of utilization. I see nothing in the impugned Manitoba Act that trespasses on federal legislative authority in relation to fisheries.
The issue of conflict with existing federal legislation or valid regulations thereunder was raised by the appellants in the light of s. 33(2) of the federal Fisheries Act, R.S.C. 1970, c. F-14, as amended, which forbids, on pain of a summary conviction penalty, the deposit of deleterious substances in waters frequented by fish, unless permitted under applicable federal regulations. Section 33(7) empowers the convicting Court to make a restraining order in addition to imposing prescribed punishment for the offence and s. 33(10)
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provides that “no civil remedy for any act or omission is suspended or affected by reason that the act or omission is an offence under this section”. “Deleterious substance” is defined in s. 33(11) to mean any substance that if added to water would degrade or alter its quality so that it is rendered deleterious to fish or to the use by man of fish that frequent that water.
It may fairly be taken that a deleterious substance under the Fisheries Act is also a contaminant under the Manitoba Act that is in issue in these proceedings; but the similarity of definition in the effect of the pollutant (to use a neutral term) on fish does not result in the preclusion of the provincial Act or in its sterilization. The federal definition is directed to a penal sanction in the general public interest and is not concerned (as s. 33(10) thereof emphasizes) with civil redress. Although there may conceivably be some overlap if a restraining order is made under the federal Act and if an injunction is directed (as is sought in the claim for relief in the present case), this issue and its constitutional effect need not be faced unless orders are made that have concurrent force, and there is no such situation presented here.
This is not a case where provincial legislation has purported to make unlawful an activity which is permitted under federal legislation; and even assuming that this would be so in the light of the federal Chlor-Alkali Mercury Regulations, SOR/ 72-92 of March 29, 1972, and especially of s. 4(1) of those Regulations (permitting deposits of specified quantities of mercury without liability to punishment), those Regulations were not in force when the proceedings herein were instituted and, at the most, could only affect, if they would have any effect at all, the scope of any injunction that might be directed in the civil suit.
I come now to the question that was central to the conclusions of the Manitoba Courts, namely,
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whether the challenged Manitoba Act was in relation to any property interests or other civil law interests of the appellants or others outside the Province of Manitoba and hence was beyond Manitoba’s legislative power. Certain features of the Manitoba Act, however unique or burdensome or even unfair in impact, are clearly without constitutional infirmity. I put in this class the provisions for assignment of a bare right of action under s. 3(1)(2); the provisions of s. 3(3) for recovery of money damages which may exceed the loss actually suffered and be up to the total of payments actually made by the Government under s. 2; the provision putting upon defendants the burden of proof of lawful excuse for pollution under s. 4(1); the provision of s. 4(1)(a) making it immaterial to liability that loss was suffered by an assignor having no proprietary interest in the affected fishery (i.e. making economic loss alone recoverable); the provisions of s. 4(1)(c) making it immaterial to liability that there were other contributing causes or others were contributing to the pollution; and the provisions of s. 4(1)(d), easing the burden of proving cause and effect in the discharge of a contaminant by a defendant. Indeed, the constitutionality of these provisions was not attacked directly. The attack, if any, came in connection with the objection taken to the validity of the words of s. 4(1) defining the basis of liability, the validity of s. 4(1)(b) and, in the main, the validity of s. 4(2).
I repeat here, for convenience of reference, those provisions of the Act, being all in s. 4 thereof, upon which the constitutional objection now being considered was founded. They read as follows:
4(1) In any suit in which the government is a plaintiff wherein the pollution of water is in issue, if it is established by the degree of proof required in a civil suit that the defendant has… discharged or permitted the discharge of any contaminant from premises occupied by
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him, into waters in the province or into any waters whereby the contaminant is carried into waters in the province, and that thereafter fish in those waters have suffered death, disease or injury, or contamination rendering them unfit or unsafe for human consumption, or any adverse effect whereby they are rendered less marketable, the defendant is liable for all financial loss occasioned thereby to any person whose loss is a subject matter of the suit, notwithstanding any one or more of the following circumstances:
(b) A regulatory authority has forbidden or refused to permit the taking of fish from that fishery by reason of the pollution of the waters thereof.
4(2) For the purposes of subsection (1) it is not a lawful excuse for the defendant to show that the discharge of the contaminant was permitted by the appropriate regulatory authority having jurisdiction at the place where the discharge occurred, if that regulatory authority did not also have jurisdiction at the place where the contaminant caused damage to the fishery.
Section 4(1) may be regarded, so far as the appellants are concerned, as making Manitoba law, as expressed therein, applicable to their activities originating in Saskatchewan and Ontario respectively, but only by reason of their having caused damage to a fishery in Manitoba by discharging a contaminant into waters flowing into Manitoba. We are not concerned in this case with the jurisdiction of the Manitoba Courts over the appellants; that is not disputed because they have a sufficient presence in that Province to provide a basis for jurisdiction in personam. Hence, any question of constitutional limitation on the power of the Province to act within the Province against non-residents (to use a general term), by fashioning its own rules to provide a basis for service ex juris, does not arise.
Jurisdiction in personam being uncontested, the issue in this case turns therefore on applicable law, on the choice of law to govern the liability of the appellants for the damage and loss suffered in Manitoba. I do not see how it can be said that the Manitoba Act denies to the appellants any legal rights they acquired in Saskatchewan or in Ontario in respect of the operation there of their respective chlor-alkali plants. If, as is assumed for
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the purposes of this case, they are respectively licensed to discharge contaminants to the extent that they did, that licence, local to each of the provinces, does not have an extra‑territorial reach to entitle each of them with impunity to send their pollutants into the waters of another province. That would be to assert against Manitoba an extra-territorial privilege and to use it as a basis for denying to Manitoba any local internal power to charge Ipco and Dryden with civil liability for damage produced in Manitoba to Manitoba property interests.
There is, of course, no title in flowing water, and if any regulatory authority to have interprovincial effect is to exist in respect of pollution of interprovincial waters it would have to be established under federal legislation. It may be (and this does not appear in the record) that the licence to discharge pollutants into the South Saskatchewan and the Wabigoon rivers came from a federal source but, as in the case of federal fishery regulations, it did not purport to have more than a local intra-provincial force; and hence no nourishment for their constitutional position can be found by Ipco and Dryden in the fact that they were licensed to pollute in Saskatchewan and Ontario. One might urge, with equal want of logic, that an American state could authorize pollution of an international river flowing into Manitoba and thus immunize the polluter against liability in Manitoba for damage caused in Manitoba. To put the matter in tort terms, Ipco and Dryden in discharging a pollutant into waters that flow into an adjoining province created a risk of harm there that could not be justified by reliance on permission that was necessarily limited to the waters and the fisheries in the licensing provinces.
What must be the resort of Ipco and Dryden is that Manitoba law does not, or does not alone, govern the liability of the appellants for the damage and loss that occurred in Manitoba. What, then, is the law that governs this liability, or is it, in any event, open to Manitoba to determine for
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itself, having jurisdiction over the appellants, how their liability should be determined for damage and loss in Manitoba? In respect of this latter point, the constitutional issue, if any, has a similarity to that which this Court and the Privy Council considered in cases touching the power of a province to fix for itself the situs of intangibles for the purpose of provincial taxation: see, for example, The King v. National Trust Co. However, for the reasons that follow, I do not think such an issue has to be met in this case. In my opinion, choice of law principles relative to the place of commission of the tort in the present case make it appropriate for Manitoba to apply its own law, whether common law or statute law, to the liability of Ipco and Dryden; and, moreover, I find no excess of constitutional power in the way in which the impugned legislation operates. In short, I do not regard this as a case where Manitoba has purported to bring within its borders a tort which could not justifiably be litigated there under Manitoba law by common law choice of law principles. Certainly, in proceedings originating in a motion to strike out the major part of the statement of claim it would be rash (as Chief Justice Freedman noted in his reasons) to view the facts in the present case as giving rise to a tort actionable under Saskatchewan and under Ontario law but not under Manitoba law.
Manitoba’s predominant interest in applying its own law, being the law of the forum in this case, to the question of liability for injury in Manitoba to property interests therein is undeniable. Neither Saskatchewan nor Ontario can put forward as strong a claim to have their provincial law apply in the Manitoba action; in other words, the wrong in this case was committed, or the cause of action arose in Manitoba and not in Saskatchewan or in Ontario. There is hence no need to consider either
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Phillips v. Eyre or other cases in which it has been considered or reconsidered such as Chaplin v. Boys, since these cases involve the situation where the tort or wrong or the cause of action had arisen outside the forum or the jurisdiction in which suit was brought. The question whether the rules in Phillips v. Eyre are jurisdictional (and this is unlikely), or are indeed choice of law rules, does not arise in the present case upon the conclusion being reached that there is here no tort that has arisen outside of Manitoba and is being sued upon in Manitoba. To the extent that the recent judgment of this Court in Moran v. Pyle National (Canada) Ltd, judgment pronounced December 21, 1973, but not yet reported [now reported], may be said to relate to choice of law principles as well as to jurisdiction, it supports the view I take here as to the place where the cause of action arose.
If, as I would hold, Manitoba law is applicable to redress the injury suffered in that province, how can there be constitutional infirmity in its imposition of liability merely because the cause of the damage arose outside Manitoba, or because as a result of the damage fishing in Manitoba has been halted by the governing regulatory authority or because Manitoba refuses to recognize within Manitoba the lawfulness of the discharge of the pollutant outside Manitoba? I do not regard any of these circumstances, not even that last mentioned (reflected in s. 4(2) of the Manitoba Act) as involving legislation in relation to any civil rights or interests of the appellants outside of Manitoba. Of course, the Manitoba Act has an effect upon them, but its purpose is to strike at the damage and loss produced in Manitoba to Manitoba property.
None of the cases cited by the appellants as a basis for their constitutional position support it. I
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begin with a reference to Desharnais v. C.P.R., where it was contended that a resident of Alberta, injured in Saskatchewan in the course of his employment by the defendant was precluded from suing in the Saskatchewan Courts because of the provision for workmen’s compensation under Alberta legislation. This contention was rejected as involving an assertion of Alberta law to govern a tort committed in Saskatchewan. Merely to state the facts of the Desharnais case is to demonstrate how far removed it is from the present case. If at all relevant, the Desharnais case would exclude the application of Saskatchewan or Ontario law to control liability for a tort committed in Manitoba. C.P.R. v. Parent, represents the converse situation to Desharnais because of the contention that a right of action arose in Quebec under s. 1056 of its Civil Code in respect of the death of a Quebec domiciliary, an employee of the appellant, which resulted from an accident in Ontario brought about by the negligence of servants of the appellant. It appears that by reason of certain contractual undertakings between the deceased and the appellant, no action would have lain in Ontario under its Fatal Accidents Act as a result of the death of the deceased. Apart from any conflict of laws question as to the right to succeed in a Quebec suit, it was held by the Privy Council that art. 1056, in giving an independent right of action, should be construed as applicable only to offences or quasi-offences committed in Quebec. The obiter statement of Viscount Haldane at p. 206 that “no doubt the Quebec Legislature could impose many obligations in respect of acts done outside the province on persons domiciled within its jurisdiction” is of marginal significance in the present case because on the facts it is unnecessary for the respondent to rely on this statement in support of its legislation; but, it does offer some support, if support is needed.
This brings me to Royal Bank of Canada v. The King, and to such later cases as Ottawa Valley Power Co. v. Hydro-Electric Power Commission
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of Ontario; Beauharnois Light, Heat and Power Co. Ltd. v. Hydro-Electric Power Commission of Ontario, and Crédit Foncier Franco-Canadien v. Ross. The first observation I would make is that all these cases involved contractual undertakings which later provincial legislation sought to abrogate, and the invalidation of the legislation proceeded on the footing that the contracts created civil rights outside the territory of the Provinces which those Provinces were powerless to destroy. Whatever be the merit of the criticism of the Royal Bank of Canada case in particular, its principle does not touch the present case which involved no promissory undertakings. Second, as Freedman C.J.M. pointed out in his reasons, if there be analogy by reference to where the rights in issue in each case were enforceable, it is obvious that in the present case they were enforceable only in Manitoba and not outside, as was the situation in the Royal Bank of Canada case.
Nor do I think that there is anything in Attorney General of Ontario v. Scott, which supports the position of the appellants. That case dealt in the main with contentions of (1) unconstitutional delegation of legislative power, (2) invasion by Ontario (whose legislation was under attack) of s. 96 of the British North America Act by vesting in a provincially appointed magistrate jurisdiction appropriate only to a superior court judge, and (3) invasion of the federal treaty-making power. Only Rand J., speaking for himself and three other members of the Court (there were eight who participated in the judgment), addressed himself to the question whether there were involved “civil rights which do not lie within the scope of provincial jurisdiction” (to use his words at p. 139). The case concerned a reciprocal arrangement between Ontario and England for the enforcement in Ontario against resident husbands of provisional maintenance orders for which proceedings had
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been initiated in England by wives resident there. The Ontario Reciprocal Enforcement of Maintenance Orders Act, then R.S.O. 1950, c. 334, purported to carry out this arrangement through a show cause summons served upon the husband in Ontario for confirmation of the provisional order made abroad. Only defences which might have been raised in England were open in the confirmatory proceedings in Ontario. This Court saw no constitutional defect in this legislation; and in upholding it Rand J. said that he saw “no jural distinction between creation and enforcement of a contract and the recognition and enforcement of a marital duty; the latter in fact arises out of or is attributable to a contract, that of marriage” (at p. 140).
It was in this context that Rand J. spoke as follows (at p. 141):
A distinction may properly be made between vesting a right and extinguishing it. The former is, in fact, a declaration that within the jurisdiction making it the attributes of ownership of property or of a claim against a person within the jurisdiction, are available to the non-resident. Generally, the right so declared would be recognized and enforced under the principle of comity by other jurisdictions. But a like declaration purporting to extinguish a right based on jurisdiction over the debtor only could not bind the non‑resident creditor—in the case of a province, even in its own courts, Royal Bank of Canada v. The King—outside of that jurisdiction unless otherwise supported by recognized elements furnishing jurisdiction over him or the right. In short, a state, including a province, does not require jurisdiction over a person to enable it to give him a right in personam; but ordinarily, and to be recognized generally, such a jurisdiction is necessary to divest such a right. That is not to say that jurisdiction of this nature is in itself always sufficient to divesting.
The reference to debtor and creditor in this passage shows how different is the situation that he
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was considering from that present here. To the extent that there is any comparison to be made with the situation here, it resides in the emphasis on jurisdiction over the person affected, and that is so in this case.
In my view, the appellants’ contention of constitutional invalidity based on alleged deprivation or divestment of a “right” outside Manitoba proceeds upon a misconception. What the appellants are claiming is an immunity in Manitoba based on a licence to pollute granted outside. That licence was not granted as against the respondent herein or against any of the assignor fishermen, nor could it be. Manitoba, in enacting s. 4(2), simply took care to exclude any possible contention that a licence granted in another province could provide a defence against liability for injury to Manitoba property. Whether the result would have been the same without s. 4(2) need not be decided, but there is bound to be doubt whether a foreign jurisdiction can license the pollution of waters in a neighbouring state so as to provide a defence to an action brought in the latter for injury to property therein.
For all the foregoing reasons, I would dismiss the appeals herein with costs.
The judgment of Martland, Pigeon and Beetz JJ. was delivered by
PIGEON J.—The action herein is founded on the allegation that the defendants, the appellants in this Court, caused damage to Manitoba’s fisheries by allowing mercury to be discharged from their respective chlor-alkali plants in Saskatchewan and Ontario which mercury was carried into Manitoba by the natural flow of the rivers in which the discharge took place.
In addition to the common law, Manitoba relies on what I will call the Assistance Act, a statute passed by its Legislature in 1970, entitled The Fishermen’s Assistance and Polluters’ Liability Act. It is there provided that Manitoba may recover as damages caused by pollution the amount of
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assistance payments made to fishermen or the actual loss, whichever is greater. A statutory liability is created against any person having discharged a contaminant either “into waters in the province or into any waters whereby it is carried into waters in the province”. It is also provided that it is not a lawful excuse “to show that the discharge of the contaminant was permitted by the appropriate regulatory authority having jurisdiction at the place where the discharge occurred, if that regulatory authority did not also have jurisdiction at the place where the contaminant caused damage to the fishery”.
On a motion to strike out the allegations related to the Assistance Act, Matas J. (as he then was) held that the Act was beyond the powers of the Manitoba Legislature as purporting to deny to the defendants the benefit of civil rights outside of Manitoba, that is the authorization presumably issued by the appropriate authority under the laws of the province in which each plant was operated.
On appeal, the majority upheld the validity of the Assistance Act, Guy J.A. dissenting. Freedman C.J.M., with whom Dickson J.A. (as he then was) expressed agreement, said, after referring to Cowen v. Attorney General for British Columbia:
The Assistance Act is similarly directed against acts done within the Province.
Hall J.A., with whom Monnin J.A. concurred, said:
In my opinion the impugned statute in the context of the assumed facts is valid provincial legislation and does not offend any doctrine of territorial limitation. To the extent that such limitation may exist it does not debar the Manitoba Legislature from enacting legislation imposing obligations in respect of acts done outside the province on persons or corporations who are domiciled or resident in the province. The Courts of Manitoba can and do entertain actions and award damages for torts
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committed abroad, from which it follows that the Manitoba Legislature is competent to define the conditions on which damages in such actions should be awarded, in so far as the matter relates to property and civil rights in the province and to subjects of a local and private nature therein.
With respect, I fail to see how the Assistance Act can be said in the present case to be directed against acts done within Manitoba. The essential provision on which Manitoba relies to claim against the appellants is the discharge of a contaminant from premises outside Manitoba into waters whereby it is carried into waters in the province. While it can be said that the legislation is aimed at damage caused in Manitoba, it is not directed against acts done in that province: the basic provision on which the claim is founded is an act done outside the province namely, the discharge of the contaminant.
In my view, the situation is totally unlike that which obtained in the Cowen case. He was a dentist practising in Spokane, State of Washington, but the acts complained of were advertisements published in a newspaper at Nelson, B.C. Duff C.J., speaking for the Court, carefully delineated the ambit of the dicision saying (at pp. 323-4):
The decisive consideration, in my opinion, is that the prohibitions are directed against acts done within the province. Prima facie the legislation is within the provincial legislative sphere. Nor do I think (subject to an observation to be made upon one feature of the amending statute) there is any circumstance present here which has the effect of rebutting this prima facie conclusion. The statute does not profess to prohibit people going beyond the limits of British Columbia for the purpose of getting the benefit of the services of a dentist, or to regulate their conduct in doing so; nor does it prohibit the sending into British Columbia from abroad of newspapers and journals containing the advertising cards of practising dentists; nor does it prohibit any communication with British Columbia from abroad. Such prohibitions would present an entirely different question.
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There is one feature of the statute to which it is desirable to advert. By section 63 of the principal Act, which is now section 63, subsection (1), there is a definition of “practising the profession of dentistry within the meaning of this Act.” By section 2 of the amending Act of 1939, section 63 is amended by bringing within the category of persons who are deemed to be practising dentistry within the meaning of the Act.
any person… who supplies or offers to supply to the public artificial teeth, dentures or repairs therefor.
It would seems to be at least arguable that the statute as amended in 1939 prohibits the publication in British Columbia by persons carrying on business outside the Province of advertisements stating that they are manufacturers of or dealers in dental supplies of the description or descriptions mentioned. It is unnecessary to consider this aspect of the amendments of 1939. It might be argued, not without plausibility, that any prohibition of the publication in British Columbia of such advertisements in respect of articles of commerce is legislation in relation to a matter that is not a local British Columbia matter, within the contemplation of sections 91 and 92 of the British North America Act. Assuming the amending legislation to be pro tanto invalid by reason of this particular feature of it, the offending parts seem to be plainly severable; and no such question is raised by the advertisement before us. (Italics added.)
As to the extent of the constitutional authority that can be derived from the presence of the appellants within Manitoba, it is necessary, in my view, to bear in mind that the fact that a party is amenable to the jurisdiction of the Courts of a province does not mean that the Legislature of that province has unlimited authority over the matter to be adjudicated upon. The authority conferred by s. 92.14, B.N.A. Act, is limited to “The Administration of Justice in the Province, including the Constitution, Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction, and including Procedure in Civil Matters in those Courts.” This certainly does not include the substantive law to be applied. The authority over substantive law must be derived from the other enumerated heads. This is implicit in the judgment of the Privy Council in Royal
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Bank of Canada v. The King. The bank had a place of business in Alberta and was undoubtedly amenable to the jurisdiction of the Supreme Court of that province in which the action was brought. Nevertheless, it was held that the Legislature could not preclude the bank from fulfilling its legal obligation to return the money to the bond owners whose right to this return was a civil right which had arisen and remained enforceable outside the province.
The authoritative character of this decision rendered when the Privy Council was the Court of ultimate jurisdiction for this country does not depend on approval by this Court, and it is of no importance that only four of the judges of this Court who gave judgment in Attorney General of Ontario v. Scott expressly endorsed it. As to the statement by Abbott J. at p. 147 that “it is clearly competent to any province to determine for the purpose of a civil action brought in such province, what evidence is to be accepted and what defences may be set up to such an action”, it must be restricted to matters within the province’s legislative authority, otherwise it is clearly contrary to the established principle that a Province cannot extend its legislative authority by purporting to regulate the access to its Courts, see Board of Trustees of Lethbridge Irrigation District v. Independent Order of Foresters; Attorney General for Alberta v. Attorney General for Canada (Debt Adjustment case, affirming [1942] S.C.R. 31).
In my view, a statement of great importance with respect to the territorial limitation of provincial legislative authority is to be found in the judgment delivered for the Court by Duff C.J. in The King v. National Trust Co. In that case, the question was as to the extent of the power of “Direct Taxation within the Province” as applicable to property. At p. 673, one reads:
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Some propositions pertinent to that issue may, we think, be collected from the judgments of the Judicial Committee of the Privy Council, if not laid down explicitly, at least, as implicit in them. First, property, whether moveable or immoveable, can, for the purpose of determining situs as among the different provinces of Canada in relation to the incidence of a tax imposed by a provincial law upon property transmitted owing to death, have only one local situation. In applying this proposition, of course, it is necessary to distinguish between a tax upon property and a tax upon persons domiciled or resident in the province. (Toronto General Trusts Corp. v. The King, [1919] A.C. 679; Brassard v. Smith, [1925] A.C. 371; Provincial Treasurer of Alberta v. Kerr).
Then, it seems to be a corollary of this proposition that situs, in respect of intangible property (which has no physical existence) must be determined by reference to some principle or coherent system of principles; and again, the courts appear to have acted upon the assumption that the British Legislature, in defining, in part, at all events, by reference to the local situation of such property, the authority of the province in relation to taxation, must be supposed to have had in view the principles of, or deducible from, those of the common law. (The King v. Lovitt, [1912] A.C. 212; Toronto General Trusts Company v. The King, [1919] A.C. 679; Brassard v. Smith, [1925] A.C. 371; Royal Trust Co. v. Attorney General for Alberta, [1930] A.C. 144).
We think it follows that a provincial legislature is not competent to prescribe the conditions fixing the situs of intangible property for the purpose of defining the subjects in respect of which its powers of taxation under s. 92(2) may be put into effect.
It seems to me that the same reasoning should be applied in the construction of “Property and Civil Rights in the Province”. It is not within the authority of a provincial legislature to define or to extend the scope of its constitutional jurisdiction. Hence the fact that a person is amenable to the jursidiction of its Courts cannot serve as a basis for imposing obligations in respect of torts any more than with respect to taxation. On its face s. 4(2) of the Assistance Act purports to destroy the effect of legislation passed in adjacent provinces. It was agreed on all sides in argument that the question raised in this case is to be answered on the assumption that the appellants’ activities complained of
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were properly licensed under the laws of the province in which they were performed, but this essential provision of the Assistance Act declares that this will afford no defence to Manitoba’s claim. Thus, the situation is that, although presumably the appellants’ operations are authorized by the law of the province where they are effected, they are sought to be enjoined under the laws of another province by virtue of an enactment of that other province.
In the circumstances of this case, I find it necessary to say that it does not appear to me that a province can validly license on its territory operations having an injurious effect outside its borders so as to afford a defence against whatever remedies are available at common law in favour of persons suffering injury thereby in another province. In K.V.P. Company Limited v. McKie, this Court upheld the common law right of riparian owners to claim an injunction and damages against the owner of a polluting plant. It also went on to hold that it would not give effect to a provincial enactment subsequent to the judgment of the Court of Appeal because, under the federal statute governing it, this Court is to render the judgment which the Court of Appeal should have rendered. In my view, that judgment is authority for the proposition that, at common law, pollution of waters to an injurious degree is a tort that gives rise to a cause of action for those whose property rights are affected thereby. I fail to see how a provincial authority could, by licensing the polluting operations, destroy this cause of action as against persons whose rights are affected outside its borders. It seems to me that there is decisive authority, especially C.A.P.A.C. v. International Good Music, Inc., in favour of the proposition that a cause of action arises where damage is caused by acts performed in another state or province. Such a cause of action is, I think, a right enforceable outside that state or province which its legislature cannot take away under the principle
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stated in Royal Bank of Canada v. The King. The legal situation would not be different if, instead of polluting plants, we were faced with dams flooding lands in an adjoining province. It could certainly not be contended that the province in which the dam was erected could validly license the flooding in the other.
As between sovereign countries, such problems can be settled only by international agreement such as was done in the case of damages caused in the U.S. by the smelter at Trail, B.C. The Courts of the respective states would be bound to consider their own laws as conclusive. However, as between different Canadian provinces, the situation is not in all respects the same as if they were independent states. There is a consitutional limitation on their legislative authority and there is a common forum to enforce it. What was said in British Coal Corp. v. The King, at p. 520 about the doctrine forbidding extra-territorial legislation being “a doctrine of somewhat obscure extent” was in relation to the powers of the federal Parliament, not of the provincial legislatures. In this respect, it must be noted that s. 7.2 of the Statute of Westminster has made applicable to the provincial legislatures only the provisions of s. 2 dealing with conflict with imperial statutes, not those of s. 3 which declare that the federal Parliament “has full power to make laws having extra-territorial operation”.
The basic principle of the division of legislative powers in Canada is that all legislative power is federal except in matters over which provincial legislatures are given exclusive authority. Such
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authority is under every head expressly or impliedly restricted to the provincial territory. In deciding what is “within a province”, the Courts must obviously look for guidance at decisions rendered in matters of private international law. However, there is a very important difference between those cases and those that arise under our constitution. When a Court is called upon to choose as between the laws of two countries the proper laws to be applied for the solution of some private dispute, it must in the end be guided by the laws of the state that created it. But the superior Courts of the Canadian provinces are not state Courts. “They are”, as Ritchie C.J. said in Valin v. Langlois, at p. 20, “the Queen’s Courts, bound to take cognizance of and execute all laws, whether enacted by the Dominion Parliament or the Local Legislatures”. Hence, when the question before them is where does the legislative authority reside over a given subject in Canada, there is always the possibility for them to find that it is not in any provincial legislature but in the Parliament of Canada.
It has been determined in Citizens Insurance Company of Canada v. Parsons, that the power to regulate by legislation the contracts of a particular business or trade is within the scope of provincial legislative authority over property and civil rights. However, where business contracts affect interprovincial trade, it is no longer a question within provincial jurisdiction. The matter becomes one of federal jurisdiction. Such is the substance of our recent judgment in Burns Foods Limited v. Attorney General for Manitoba. In my opinion, the same view ought to be taken in respect of pollution of interprovincial waters as with respect to interprovincial trade. Even if the enumerated power, 91.12 “Sea Coast and Inland Fisheries” is not quite as explicit as 91.2 “The Regulation of Trade and Commerce”, the para-
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mount consideration is that the specific powers are only “for greater certainty”, the basic rule is that general legislative authority in respect of all that is not within the provincial field is federal. The importance of this basic rule is such that, although 91.2 is in terms unlimited, it has in fact been construed as limited to interprovincial or international trade and commerce. Here, we are faced with a pollution problem that is not really local in scope but truly interprovincial. The legal situation is not without analogy with that of interprovincial pipelines which were held to be excluded from the operation of provincial mechanics’ lien acts by reason of their interprovincial character. (Campbell-Bennett Ltd. v. Comstock Midwestern Ltd.)
It seems to me that in the present case, the question from the point of view of constitutional legislative authority, is not at all the same as in a lawsuit between private parties where the question arises whether the proper law to be applied is the law of the place where the tortious act was committed or that of the place where the damage was suffered. In such a situation, a choice has to be made and regard must sometimes be had for both to a certain extent. If the two elements have occurred in different countries and there are bases on which the Courts of both countries can take jurisdiction, there is no guarantee against conflicting decisions. (See The “Atlantic Star”.) Fortunately in Canada, no such situation exists. There is a common forum having unifying authority over all superior Courts. Concurrent jurisdiction will not therefore authorize the Courts of one province to disregard the authority of those of another (Bank of Montreal, Royal Bank of Canada and C.F.I. Operating Co. Ltd. v. Metropolitan Investigation & Security (Canada) Ltd.) (October 1,
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1974, not yet reported) [now reported ]. The recent decision of this Court in Moran v. Pyle National (Canada) Ltd. deals only with situs for jurisdictional purposes, not with the rules used to identify the legal system under which the rights and liabilities of the parties fall to be determined. In our federal context, the two sets of rules are not interdependent due to the nature of our superior Courts which are not purely provincial and to the existence of a common forum having general appellate jurisdiction in all matters.
Coming back to the facts of the present case, it appears to me equally impossible to hold that Saskatchewan and Ontario can license the contaminant discharge operations so as to preclude a legal remedy by those who suffered injury in Manitoba, or to hold that Manitoba can, by prohibiting the discharge of any contaminant into waters flowing into its territory, require the shutting down of plants erected and operated in another province in compliance with the laws of that province. I have underlined the words “any contaminant” because, as previously noted, I accept the view that Manitoba is entitled at common law to complain of injury to its fisheries done by pollution of waters flowing into its territory. The judgment of Matas J., it should be remembered, does not strike out the claim for injury at common law. However, under the Assistance Act, there is no quantity of contaminant that may be lawfully discharged and the consequence might be that the injuction prayed for could be obtained even if the discharge was cut down to a degree that would cause no substantial injury and would comply with the regulations enacted under federal authority.
In accordance with the views expressed in Ross v. Registrar of Motor Vehicles, I agree that when the matter is one of provincial jurisdiction, a province is not prevented from imposing stiffer
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requirements than those which the federal Parliament may have prescribed. Therefore, I do not accede to the view that Manitoba’s legislation conflicts with federal legislation for the protection of fisheries because, to protect its own interests, it lays down more rigid requirements than those prescribed by or under federal legislation. The Chlor-Alkali Mercury Regulations, SOR/72-92, are dated March 28, 1972, that is subsequent to the institution of the proceedings herein. For this reason, it does not seem they should be given consideration on this appeal. If it ever becomes necessary to deal with them, different considerations will arise because s. 4.1 expressly authorizes the discharge of a stated quantity of mercury which, although small, is not negligible.
The cases dealing with the complex jurisdictional situation concerning fisheries are well known and I find it unnecessary to refer to them. It seems clear that a province, as owner of inland fisheries in its territory, is entitled to legislate for the protection of its property. However, in respect of injury caused by acts performed outside its territory, I cannot accede to the view that this can be treated as a matter within its legislative authority when those acts are done in another province any more than when they are accomplished in another country. In my view, although the injurious acts cannot be justified by or under legislation adopted in the province or state where the plants are operated, by the same token, Manitoba is restricted to such remedies as are available at common law or under federal legislation.
For those reasons, I would allow the appeals and restore the judgment of Matas J. with costs in this Court and in the Court of Appeal; there should be no costs to or against any of the intervenants.
RITCHIE J.—I have had the advantage of reading the reasons for judgment prepared for delivery by the Chief Justice and Mr. Justice Pigeon in which the circumstances giving rise to this appeal are accurately summarized and I will attempt to
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avoid repetition except in so far as I find it necessary to an understanding of my approach to the problem.
The acts of which the respondent complains are that Interprovincial Co-Operatives Limited (hereinafter called “Interprovincial”) and Dryden Chemicals Limited (hereinafter called “Dryden”) “respectively, permitted substantial quantities of mercury both in its elemental form and as a compound, to escape, the former into the South Saskatchewan River at a point near the Saskatoon plant, and the latter into the Wabigoon River at a point near the Dryden plant.” (See p.6 of the statement of claim). (Italics are my own).
The acts complained of were committed beyond the borders of the Province of Manitoba, but the alleged damage arose in large degree in consequence of the refusal of the appropriate federal authority acting under the authority of the Manitoba Fishery Regulations, SOR/54-365, to permit fishing for commercial purposes in certain waters in the Province of Manitoba. In this regard para. 9 of the statement of claim reads:
By reason of the contamination of the said fish by ingestion of mercury as aforesaid, they became, and continue to be, unsafe for human consumption, and unmarketable for that purpose, with the result that the regulatory authority under the Manitoba Fishery Regulations, SOR/54-365, as amended, has refused to permit fishing for commercial purposes in those parts of the Manitoba waters described in clauses (a), (b) and (c) of paragraph 1 since April 1st, 1970, and in those described in clause (d) since July 17th, 1970, further though the taking of fish for sport by angling in those waters is still permitted, the number of persons engaged in angling has greatly diminished by reason of the danger to human health posed by the consumption of such fish.
The allegation of negligence which forms the basis of this action is contained in para. 10 of the statement of claim which reads as follows:
10. In permitting mercury to escape from their respective plants, as alleged in paragraph 6, Interprovincial and Dryden Chemicals, respectively, acted negligently, and in breach of the duty of each to the Plaintiff and the said assignors, to take reasonable care to prevent dangerous contaminants from entering the waters of the
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South Saskatchewan River and the Wabigoon River respectively, and travelling downstream to the injury of the Plaintiffs fishery.
Particulars of the respective negligence of Interprovincial and Dryden Chemicals are as follows:
Each installing and operating a chlor-alkali plant which utilizes a mercury cell process, close to a major watercourse, the South Saskatchewan River and the Wabigoon River respectively, but
(1) failing to take any or sufficient steps to monitor its industrial process to ensure that no mercury, or mercury compounds, were escaping from its plant directly or indirectly into such watercourse; and
(2) failing to take any or sufficient steps to prevent such escape.
The alleged damage sustained by the appellant is described in para. 13 of the statement of claim as follows:
13. Pursuant to Section 2 of The Fishermen’s Assistance and Polluters’ Liability Act, S.M. 1970 C.32 (hereinafter called the Assistance Act) the Minister therein mentioned has, since 1st June, 1970, made assistance payments totalling $2,000,000.00 more or less, to 1590 persons then or formerly engaged in various capacities in the commercial fishing industry in Manitoba who, in the opinion of the Minister, had suffered or would suffer, financial loss by reason of the prohibition of the taking of fish from the Manitoba waters because of the contamination of those fish resulting in whole or in part from pollution of those waters by the mercury discharging activities of Interprovincial and Dryden Chemicals respectively, hereinbefore described.
The italics are my own.
The respondent also alleges that the appellants respectively have committed a continuing nuisance or trespass by permitting mercury to escape from their respective plants, but it is clear to me that this whole action is based on the acts of the appellants in discharging contaminants into waters at places in Saskatchewan and Ontario respectively.
1 agree with Mr. Justice Matas who rendered the judgment on behalf of the Court of Queen’s Bench of Manitoba and with the majority of the Court of Appeal that the contention of the appel-
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lants to the effect that the impugned legislation is ultra vires as trespassing on the exclusive jurisdiction of Parliament under s. 91 (27) (criminal law) cannot be sustained and I subscribe to the view expressed by Matas J. and adopted in the judgment rendered in the Court of Appeal by Mr. Justice Hall on behalf of himself and Monnin J.A., where it is said:
I accept the plaintiff’s contention that the Fishermen s Act has legislated with respect to the tort of injury to a provincial right of fishery and, in respect of that tort, has made provision for such matters as burden of proof, remoteness of damage and inadmissible defences. My conclusion is that this legislation is not in conflict with federal legislation forbidding pollution of fish-frequented waters or alteration of water quality as that quality affects fish…
This conclusion was reached after careful consideration of the reasons for judgment of the Chief Justice of this Court in The Queen v. Robertson, and the judgment of Lord Herschell in Attorney General for Canada v. Attorney General for Ontario.
In the latter case Lord Herschell concluded at p. 716:
For these reasons their Lordships feel constrained to hold that the enactment of fishery regulations and restrictions is within the exclusive competence of the Dominion Legislature, and is not within the legislative powers of Provincial Legislatures.
But whilst in their Lordships’ opinion all restrictions or limitations by which public rights of fishing are sought to be limited or controlled can be the subject of Dominion legislation only, it does not follow that the legislation of Provincial Legislatures is incompetent merely because it may have relation to fisheries. For example, provisions prescribing the mode in which a private fishery is to be conveyed or otherwise disposed of, and the rights of succession in respect of it, would be properly treated as falling under the heading “Property—and Civil Rights” within s. 92, and not as in the class “Fisheries” within the meaning of s.91. So, too, the terms and conditions upon which the fisheries which are
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the property of the province may be granted, leased, or otherwise disposed of, and the rights which consistently with any general regulations respecting fisheries enacted by the Dominion Parliament may be conferred therein, appear proper subjects for provincial legislation, either under class 5 of s.92, “The Management and Sale of Public Lands” or under the class “Property and Civil Rights.” Such legislation deals directly with property, its disposal, and the rights to be enjoyed in respect of it, and was not in their Lordships’ opinion intended to be within the scope of the class “Fisheries”…
It appears to me to follow from the above that legislation in respect of water quality and of pollution, including the permitting thereof in interprovincial rivers is clearly within the exclusive legislative authority of the Parliament of Canada under s.91(12), whereas provincial legislation dealing exclusively with the effect of pollution, including the proof thereof and the measure of damage resulting therefrom, has controlling effect within the territorial limits of the province by which it is enacted. It follows, in my view, that provincial legislation relating to the recovery of damages for pollution, and indeed creating and controlling an action therefor, against a polluter whose acts done within the province have occasioned the pollution, is clearly within the provincial domain, whereas the overall authority seized with the regulation and control of pollution in interprovincial waters just as clearly rests with Parliament.
The difficult problem presented by this case arises in large degree from the enactment by the Legislature of Manitoba of s. 4 of The Fishermen’s Assistance and Polluters’ Liability Act, 1970 (Man.), c. 32, (hereinafter called the “Assistance Act”) which is fully recited in the reasons for judgment of the Chief Justice and subs. (2) whereof reads as follows:
4. (2) For the purposes of subsection (1) it is not a lawful excuse for the defendant to show that the discharge of the contaminant was permitted by the appropriate regulatory authority having jurisdiction at the place where the discharge occurred, if that regulatory authority did not also have jurisdiction at the place where the contaminant caused damage to the fishery.
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This subsection clearly contemplates the discharge of a contaminant into waters outside of the Province of Manitoba at a place where such discharge is permitted “by the appropriate regulatory authority having jurisdiction” at that place and having no jurisdiction in the Province of Manitoba where the contaminant allegedly caused the damage to the fishery. I think it of first importance to observe that this motion has been argued in all Courts on the supposition that in enacting the subsection the legislature did contemplate the existence of the permission of such an appropriate regulatory authority and that it is unnecessary to decide in this case whether such authority be federal or provincial or indeed to make any final decision as to its validity. What is accepted here is that the provincial legislature purported to nullify the effect of permission duly granted by the regulatory authority of another jurisdiction and I agree with Mr. Justice Matas that in so doing it purported to legislate with respect to conduct and rights of the defendants outside the territorial limits of the Province of Manitoba with the result that the statute of which it forms part has no application to the appellants in the present case.
It is perhaps trite to observe that under the British North America Act each province of Canada enjoys sovereign authority within the spheres enumerated in s. 92 of that Act and that this authority is limited by the territorial boundaries of the provinces respectively. It follows in my view that in considering the law applicable in any particular case, the common law principles established in the general field of conflict of laws must govern.
I agree with Chief Justice Freedman that “the case of Phillips v. Eyre (1870), L.R.6 Q.B. 1, must be our starting point” in determining the applicable law. In that case Willes J. stated the following rule:
As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England. Secondly, the act must not have been justifiable by the law of the place where it was done.
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This general rule has been adopted as applicable between two provinces of Canada in a considered series of cases of undoubted authority such as Carr. v. Fracis Times & Co.; Walpole v. Canadian Northern Railway Co.; McMillan v. Canadian Northern Railway Co. In our own Court it is only necessary to mention Canadian National Steamships Co. Ltd. v. Watson, per Duff C.J., at p. 13 and McLean v. Pettigrew, per Taschereau J. at p. 76.
The general principle as it applies in this country was well stated by Lord Cave in McMillan v. Canadian Northern Railway Company, supra, where he said:
The same rule, of course, applies to an action brought in one province of Canada for a wrong alleged to have been committed in another; and it is, therefore, necessary, in order that the present action may be sustained, to establish, not only that the negligent act upon which the action is founded would have been actionable under the law of Saskatchewan if it had been committed within that Province, but also that it was not justifiable by the law of Ontario. Whether the first condition is complied with in this case need not be considered if (as the Court of Appeal have held) the second is not fulfilled.
It is appreciated that the nature of the actions referred to in the last-cited group of cases differed essentially from that with which we are here concerned in that the alleged tort in the present case was one which was necessarily inter-provincial in its scope and effect. It is essential to remember, however, that this case is being presented on the basis that the acts of the appellants in discharging the pollution in Ontario and Saskatchewan were justified by reason of the permission of the regulatory authority having jurisdiction to permit it. Whether that authority was provincial or federal is a matter with which we are not here concerned.
One of the principal arguments advanced on behalf of the respondent is that the place of the “torts” allegedly committed by the appellants was the Province of Manitoba on the ground that it
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was the province whose interests were most deeply affected and Chief Justice Laskin appears to take the view that in the present case there is no tort arising outside of Manitoba and being sued upon in Manitoba.
In the course of his reasons for judgment, Freedman C.J.M., in adopting the view that the tort is to be taken to have been committed within the jurisdiction where the damage occurred, relied on such cases as C.A.P.A.C. v. International Good Music, Inc., and Jenner v. Sun Oil Company Limited, but in my view these cases do nothing more than establish that an arguable case can be made for the proposition that defamatory statements or breaches of copyright occurring in one jurisdiction and carried into another by radio could be said to have been published in the second jurisdiction and could therefore give rise to an action for damages where they were published. In my view, the question in the present case is not only whether a tort was committed in Manitoba, but whether the acts of the appellants done in Saskatchewan and Ontario amounted to actionable torts at all. If the acts were authorized by licence and therefore justifiable in the places where they were done, they were not civil wrongs and can form no basis for a damage action.
There is, as I have said, an unbroken line of authority in this Court accepting the rule in Phillips v. Eyre without question and I am not prepared to depart from it. If that rule is to be adhered to it follows that if there were licences making the appellants’ “mercury discharging activities” in Saskatchewan and Ontario justified, this not only gave rise to the civil right under the law of those provinces, but to a concomitant civil right to have those licences recognized in the Courts of Manitoba in determining whether or not the action is properly founded in that province. As to the authority of the Legislature of that province to nullify these civil rights and convert an act lawfully done in another province under the laws
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of that province into an unlawful one while at the same time disregarding rights established under private international law, I share the view of Mr. Justice Matas that the case of Royal Bank of Canada v. The King has direct application to the circumstances.
The facts of the Royal Bank case have been extensively explored in the judgments in the Court of Appeal and by the Chief Justice of this Court and it would be superfluous for me to repeat them so that it is perhaps enough for me to say that in my opinion I agree with the basic proposition asserted by Lord Haldane at p.298 where he said of the appellants:
Their right was a civil right outside the province, and the Legislature of the province could not legislate validly in derogation of that right.
In distinguishing that case, Chief Justice Freedman had this to say:
In Royal Bank the right of the bondholders in England to claim the return of their money from the bank at its head office in Montreal was held to be a civil right arising and enforceable extra-provincially—that is, outside the Province of Alberta. Here on the other hand, the effect of any license or permit which the defendants may possess would necessarily have to be tested and determined intra-provincially—that is, within the Province of Manitoba. The place where the rights are enforceable—in Royal Bank, outside the Province, in the present case, within the Province—constitutes a clear distinction between the two cases, a distinction that goes to the very root of the constitutional issue now before us.
The first portion of these observations appears to me to be based on the assumption that the present case is concerned with a civil right arising in Manitoba, but as I view the appellants’ civil right as stemming from the licences which are assumed to have been granted to them in Ontario and Saskatchewan respectively, I cannot subscribe to this distinction.
The extra-provincial character of the right of action asserted by the respondent against the
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appellants is most dramatically illustrated by the fact that the first claim for relief under the statement of claim is for
An injunction restraining each from continuing to discharge mercury or mercury compounds from their respective chlor-alkali plants into the two aforementioned rivers respectively, or into any other watercourse directly or indirectly draining into or connecting with the Manitoba waters…
This to me is a clear assertion of a right of one province to enter into another and there invoke its own law so as to restrain companies who have a presence in all three provinces from exercising rights which they are assumed to have under licences from the province where the discharge took place.
For all these reasons I would allow this appeal, set aside the judgment rendered by the Court of Appeal for Manitoba on March 21, 1973, and restore the judgment of the Honourable Mr. Justice Matas of the Court of Queen’s Bench of Manitoba pronounced on June 16, 1972.
Mr. Justice Pigeon, as I understand his reasons, has reached the same conclusion on the ground that as the acts of the appellants necessarily have an interprovincial effect they are a subject-matter within the exclusive authority of Parliament in accordance with its residual power over matters of interprovincial concern not specifically allocated to either federal or provincial authority under the B.N.A. Act. He concludes therefore that the Provinces of Ontario and Saskatchewan were without authority to license the appellants’ acts of contamination, and as a corollary to this reasoning, he concludes that the legislation in question is ultra vires the province as involving the exclusively federal field of the pollution of interprovincial rivers. This argument was not advanced by either of the parties at any stage and it formed no part of the submissions made by any of the intervenants as all concerned proceeded throughout on the assumption that the acts of pollution were duly permitted by the appropriate regulatory authority having jurisdiction where they took place. I am unable to share the view of my brother Pigeon because I take the view that while the control of pollution of such
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rivers is a federal matter, the legislation here impugned has to do with its effect in damaging property within the Province of Manitoba and it only becomes inapplicable by reason of the extraterritorial aspect to which I have made reference. The action here was instituted by the Crown as assignee of the rights of private individuals and in my view the applicable law is that of the place where the acts complained of were done.
Altogether apart from the provision of the Assistance Act, the statement of claim alleges an action at common law, and if this action should be pursued and it should develop that the appellants were not licensed by the appropriate regulatory authorities in Ontario and Saskatchewan, then I have no doubt that the Courts in Manitoba would have jurisdiction to entertain the suit in accordance with the reasoning expounded by Mr. Justice Dickson in Moran v. Pyle National (Canada) Limited, decided in this Court on December 21, 1973.
Appeals allowed with costs, LASKIN C.J. and JUDSON and SPENCE JJ. dissenting.
Solicitors for the defendant, appellant, Inter-provincial Co-operatives Ltd.: Aikens, MacAulay & Thorvaldson, Winnipeg.
Solicitors for the defendant, appellant, Dryden Chemicals Ltd: Pitblado & Hoskin, Winnipeg.
Solicitor for the plaintiff, respondent, Gordon E. Pilkey, Winnipeg.
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