A-106-02
2003 FCA 35
Gulf Log Salvage Co-Operative Association, Her Majesty in Right of the Province of British Columbia, and Jim Doyle, Minister of Forests (Appellants)
v.
Early Recovered Resources Inc. (Respondent)
and
Coast Forest and Lumber Association and Independent Timber Marketing Association (Interveners)
Indexed as: Early Recovered Resources Inc. v. Gulf Log Salvage Co-Operative Assn. (C.A.)
Court of Appeal, Rothstein, Pelletier and Malone JJ.A. --Vancouver, December 18, 2002; Ottawa, January 24, 2003.
Constitutional Law -- Distribution of Powers -- Provincial statutory scheme for log salvage -- Whether outside scope of maritime law, federal jurisdiction -- Declaration provincial legislation invalid sought -- Canada indifferent -- Motions Judge concluding once found subject-matter of Forest Act, Part IX within International Convention on Salvage, 1989 definition of salvage, no provincial jurisdiction -- That subject-matter of legislation within salvage definition not conclusive of constitutional competence -- Salvage under federal jurisdiction as within enumerated head "shipping" -- Convention salvage definition not altering constitutional division of powers -- Real question: whether provincial log recovery scheme sufficiently connected to shipping for salvage definition to apply -- Pith and substance analysis -- On record, Court unable to find whether sufficient connection between log recovery, shipping to justify federal jurisdiction -- Courts not to rule on constitutional validity of legislation absent adequate factual record -- Matter must go to trial.
Maritime Law -- Salvage -- Salvage of logs in Fraser River, B.C. -- Province enacted licensing scheme -- Respondent of view amount paid for recovery too low, preferring more generous scheme under International Convention on Salvage, 1989 as incorporated into Canada Shipping Act -- "Salvage" not defined in Canada Shipping Act, so Convention definition applies -- Salvage under federal jurisdiction as within enumerated head "shipping" -- Convention definition of salvage not altering constitutional distribution of powers -- Disputed facts raising genuine issues for trial -- Court unable to resolve constitutional issues due to inadequate factual record.
This was an appeal by the Crown in right of British Columbia from the decision of Hugessen J., denying a motion for summary judgment dismissing an action regarding the salvage of logs in the Fraser River. The position taken by the Province was that provincial legislation and regulations provided a comprehensive scheme for the salvage of logs so that such claim fell outside the scope of Canadian maritime law and Federal Court jurisdiction. The Trial Division Judge, while stopping short of declaring the provincial statute invalid, made it clear that he considered the legislation ultra vires.
The activity at issue is the recovery of logs left behind in coastal waters and rivers by logging operations. The Province has enacted a licensing scheme governing the business of recovering these logs. Respondent, Early Recovered Resources Inc., considers the amount paid to those who recover logs is too low and so a declaration that the provincial legislation was invalid was sought in order to take advantage of the more generous scheme contemplated by the International Convention on Salvage, 1989 as incorporated into the Canada Shipping Act. Canada's disinterest in asserting jurisdiction was revealed by its failure to appear in this proceeding. The word "salvage" not being defined in the Canada Shipping Act, the Convention definition of "salvage operation" applies in this litigation: "any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever". The conclusion of the Motions Judge was that once it was found that the subject-matter of Part IX of the Forest Act falls within the Convention definition of salvage, the Province cannot assert jurisdiction. By the Convention's incorporation into domestic law, Parliament had extended marine salvage to include such property as logs and booms of logs.
Held, the appeal should be dismissed.
Salvage not being an enumerated head of power under Constitution Act, 1867, section 91, the fact that the subject-matter of the legislation falls within the definition of salvage is not conclusive of constitutional competence. Salvage comes under federal jurisdiction because it is within an enumerated head: shipping. The Convention definition of salvage cannot alter the division of powers under the Constitution. So the real question is whether the provincial log recovery scheme has a sufficient connection to shipping such that the expanded definition of salvage would apply to it.
The question as to the validity of the provincial legislation is to be determined by the pith and substance analysis recently set out by the Supreme Court of Canada in Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture). That analysis is composed of three questions: (1) Does the impugned provision intrude into a federal head of power, and if so, to what extent? (2) If it intrudes, is it nevertheless part of a valid provincial legislative scheme? (3) If part of such a scheme, is it sufficiently integrated therewith? To dispose of this matter in favour of the Province, would require a finding that there is no sufficient connection between log recovery and shipping to justify federal jurisdiction. Such determination could not be made on the record before the Court. While this was a summary judgment application and it is up to each side to put its best foot forward, courts are not to rule upon the constitutional validity of legislation absent an adequate factual record. The matter must, therefore, go on to trial, it being understood that the validity of the provincial legislation remains to be decided.
Per Malone J.A.: Apart from the constitutional validity of the legislation, during argument it became apparent that there are disputed facts that will bear upon the ultimate disposition of this action should the federal legislation and the Convention ultimately prevail. These disputed facts raise genuine issues for trial as to the applicability of Chapter 3 of the Convention dealing with the rights of salvors and log recovery on the Fraser River. These issues include: is a log boom from which logs escape a vessel within the Convention definition; does the Province's ownership claim satisfy the ownership requirements of Article 8 dealing with the duties of the owner of a salved vessel or property; do the logs threaten the environment thus giving rise to a claim under Articles 13 and 14; and could a claim for special compensation assessable under Article 14 be successfully advanced against the Province?
statutes and regulations judicially
considered
Canada Shipping Act, R.S.C., 1985, c. S-9, s. 449.1 (as enacted by S.C. 1993, c. 36, s. 1).
| Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 91. |
| Forest Act, R.S.B.C., 1996, c. 157, ss. 122--126. |
| International Convention on Salvage, 1989, being Schedule V of An Act to amend the Canada Shipping Act and to amend another Act in consequence thereof, S.C. 1993, c. 36, Arts. 1 "property", "salvage operation", 8, 13, 14. |
| Log Salvage Regulation for the Vancouver Log Salvage District, B.C. Reg. 220/81. |
cases judicially considered
followed:
Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), [2002] 2 S.C.R. 146; (2002), 210 D.L.R. (4th) 577; [2002] 6 W.W.R. 1; 1 B.C.L.R. (4th) 1; [2002] 2 C.N.L.R. 143; 165 B.C.A.C. 1; 286 N.R. 131.
distinguished:
Feoso Oil Ltd. v. Sarla (The), [1995] 3 F.C. 68; (1995), 184 N.R. 307 (C.A.).
APPEAL from the decision of a Motions Judge ([2002] 4 F.C. 626) dismissing a motion for summary judgment regarding the constitutional validity of Part IX of a British Columbia statute, the Forest Act. Appeal dismissed.
appearances:
Timothy Leadem, Q.C. and Nancy Brown for appellants.
Angela McCue and Margot Venton for respondent.
David F. McEwen for interveners.
solicitors of record:
Ministry of Attorney General Legal Services Branch, Victoria, B.C., for appellants.
Sierra Legal Defence Fund, Vancouver, for respondent.
McEwen, Schmitt & Co, Vancouver, for interveners.
The following are the reasons for judgment rendered in English by
[1]Pelletier J.A.: This is an appeal by Her Majesty the Queen in right of the Province of British Columbia (the Province) from the dismissal of her motion for summary judgment. The plaintiff (respondent in the appeal) has brought an action seeking a declaration of invalidity of Part IX [sections 122-126] of the Forest Act, R.S.B.C., 1996, c. 157, dealing with marine log salvage, and its associated regulation (Log Salvage Regulation for the Vancouver Log Salvage District, B.C. Reg. 220/81), on the ground that they are legislation in relation to salvage, a matter within exclusive federal jurisdiction. The Province sought to put an early end to the litigation by moving for summary judgment, asserting the constitutional validity of its legislation. However, its motion was dismissed for reasons which, while stopping short of a declaration of invalidity, left no doubt as to the Motion Judge's conclusion that the provincial legislation was ultra vires. That decision is reported at [2002] 4 F.C. 626 (T.D.).
[2]The activity in issue is the recovery of logs left behind in coastal waters and rivers as a result of logging operations. The Province has enacted a scheme which provides for licensing of those who engage in log recovery, the establishment of a body to receive and dispose of the logs, and the distribution of the proceeds of the sale of the recovered logs to those who recovered them, and to those who claim an interest in them. The legislation describes all of this in terms of log salvage but on my reading of it, the legislative purpose could have been accomplished just as easily had the word recovery been used instead of the word salvage. All of which is to say that I attach no significance to the use of the word "salvage" in the legislation.
[3]The respondent believes that the amounts paid to those who recover logs under the provincial scheme are too low and, by way of a declaration of invalidity of the provincial legislation, seeks to bring itself within the more generous scheme contemplated by the International Convention on Salvage, 1989 [being Schedule V of An Act to amend the Canada Shipping Act and to amend another Act in consequence thereof, S.C. 1993, c. 36] to which Canada is a signatory and which has been incorporated into the Canada Shipping Act, R.S.C., 1985 c. S-9 (the Shipping Act). If it is successful, responsibility for an activity which the Province has regulated for some considerable time will pass to the Government of Canada which evinces little interest in assuming this burden as it has not appeared in these proceedings to assert the jurisdiction which the plaintiffs seek to bestow upon it.
[4]Section 449.1 [as enacted by S.C. 1993, c. 36, s. 1] of the Shipping Act declares the International Convention on Salvage, 1989 (the Convention) to have the force of law in Canada. The Convention [at Article 1] defines "salvage operation" as "any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever". Property is defined as "any property not permanently and intentionally attached to the shoreline and includes freight at risk". Salvage is not defined in the Shipping Act so that the definition in the Convention applies for purposes of this litigation.
[5]The learned Motions Judge concluded that once it is found that the subject-matter of Part IX of the Forest Act and its associated regulation falls within the definition of salvage in the Convention, there is no room for the Province to assert jurisdiction in relation to that subject-matter. He concluded [at paragraph 5], on the strength of the wording of the Convention and its incorporation into domestic law, that "Parliament has clearly legislated so as to extend the scope of marine salvage to include `property' such as logs and booms of logs within the scope of the law of salvage". He observed that when the drafters of the Convention made it applicable to "property of any kind", they did not intend any restriction on the nature of the property.
[6]Salvage is not itself an enumerated head of power under section 91 of the Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) [(as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]] so that the fact that the subject-matter of the legislation falls within the definition of salvage is not conclusive of constitutional competence. Salvage is matter of federal jurisdiction because it comes within one of the enumerated heads, namely shipping. The definition of salvage in the Convention cannot alter the division of powers under the Constitution. Consequently, the question is not whether the provincial log recovery scheme falls within the expanded definition of salvage but whether that scheme has a sufficient connection to shipping such that the expanded definition of salvage would apply to it. In other words, log recovery is not an aspect of shipping (and subject to federal jurisdiction) simply because it falls within the definition of salvage. If the provincial scheme falls within federal jurisdiction, it is because it is necessarily ancillary to shipping and is therefore properly characterized as salvage.
[7]The question of the validity of the provincial legislation is to be decided by employing the pith and substance analysis as set out in Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), [2002] 2 S.C.R. 146, at paragraph 58:
| 1. Do the impugned provisions intrude into a federal head of power, and to what extent? |
| 2. If the impugned provisions intrude into a federal head of power, are they nevertheless part of a valid provincial legislative scheme? |
| 3. If the impugned provisions are part of a valid provincial legislative scheme, are they sufficiently integrated with the scheme? |
[8]The Province has set out its position with respect to the connection between log recovery and logging and forestry. However to dispose of this matter in the manner sought by the Province would require me to find that there is no sufficient connection between log recovery and shipping to justify federal jurisdiction. I do not have before me a record upon which I could make such a determination. Even though this is an application for summary judgment where the onus is on each party "to put their best foot forward" (see Feoso Oil Ltd. v. Sarla (The), [1995] 3 F.C. 68 (C.A)), a court ought not to rule upon the constitutional validity of legislation except upon an adequate factual record.
[9]Consequently, I am unable to dispose of the question which was before the Motions Judge. The matter will therefore have to be decided by the Trial Judge on a fully developed record. The matter must proceed to trial, as the learned Motions Judge directed, but on the understanding that the constitutional validity of the provincial legislation has yet to be decided. Since this results in the same disposition of the motion for summary judgment as was arrived at by the Motions Judge, the appeal must be dismissed. By agreement of the parties, all will bear their own costs.
Rothstein J.A.: I agree.
* * *
The following are the reasons for judgment rendered in English by
[10]Malone J.A.: I concur with the reasons of Pelletier J.A. in this appeal but wish to add the following observations.
[11]Aside from the constitutional validity of the legislation one further matter must be addressed. In bringing her motion for summary judgment, the Province relied on undisputed constitutional facts agreed to by the respondent. However, during the course of argument, it became clear that there are other relevant but disputed facts that will bear upon the ultimate disposition of the action should the federal legislation and the Convention ultimately prevail.
[12]These disputed facts raise genuine issues for trial in connection with the applicability of Chapter 3 of the Convention dealing with the rights of salvors and log recovery on the Fraser River. Without limiting in any way the issues for trial, these would include whether a log boom from which the floating logs escape is a vessel as that term is defined in the Convention; whether the Province's ownership claim satisfied the ownership requirements of Article 8 dealing with the duties of the owner of a salved vessel or salved property; whether the subject logs threaten the environment so as to give rise to a claim under Articles 13 and 14; and, finally, whether a claim for special compensation assessable under Article 14 could successfully be advanced against the Province in these circumstances.
[13]While the record is unclear as to whether all of these issues were canvassed before the Motions Judge, collectively, they give rise to genuine issues for trial.